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Focus | May 2012

Trend of upward growth

The industry grew by 30 per cent in 2010 -11 and projections for 2012 are quite positive, says Daya Kingston.

The capacitor market in India is quite dynamic. The estimated market for power capacitors - low voltage (LV) and medium voltage (MV) - in India is about 40 million kilovolt-amperes reactive (kvar) and the industry grew by 30 per cent in 2010-11. The projections for 2012 are quite positive and estimated to be around 15 - 20 per cent for LV and around 10 per cent for HV. There is also a trend of higher growth in LV capacitors followed by high voltage capacitors. IEEMA and other estimates placed the overall size of the Indian market for 2011 at 31 kvar for low and 21 kvar for medium voltage capacitors, inclusive of exports. These translate into domestic consumption of Rs 2,620 million in LV and Rs 2,600 million in MV approximately.
Some of the top players are Schneider Electric, EPCOS India Pvt Ltd, Shreem, L&T, Globe Capacitors, ABB and others.

Technology Trends

Capacitors have been evolving and new-age capacitors offer better performance, durability, safety features and more. Schneider Electric, which has four factories in France, US, India and China, offers low and medium voltage capacitors for reactive power compensation. It also offers high-end solutions like active harmonic filters, broadband filters and hybrid volt-ampere reactive (VAR) compensators. Vishal Basotra, General Manager, Product Marketing (Power Metering), Schneider Electric India, said, "We offer up to 68 kvar single unit Can-type capacitors which help panel builders reduce the size of the panels. Special profile metallised polypropylene film with wavecut and heavy edge metallisation is used for better current handling and results in improved thermal management and better life. We use stacked element assembly for better thermal management and to reduce the risk of hotspot in elements. The construction also allows users to mount the capacitor units horizontally. Horizontal mounting is essential whenever the footprint of the panel needs to be minimum for certain applications. There is a trend in the Indian market to go for higher kvar density in MV capacitors which helps to keep the size of the installation smaller. To address this demand, our company has come out with 1,000 kvar MV capacitor single unit i.e., the Propivar-NG range."

EPCOS India Pvt Ltd, offers a wide range of power capacitors in terms of technology, rating, voltage, application, etc. About 60 per cent of all types of capacitors that they manufacture in India are exported and their global market share for power capacitors is about 20 per cent and the Indian market share is more than 45 per cent.

Dr R Venkatesh, President, Power Quality Solutions, EPCOS India Pvt Ltd, A TDK group company, said, "We offer a very wide range of capacitors and these are basically classified into three broad categories: film capacitors, ceramic capacitors and aluminium electrolytic capacitors. These are manufactured in different factories around the world. Our range of film capacitors includes DC capacitors, AC capacitors, power electronic capacitors, energy storage capacitors, and surge capacitors. We have eight manufacturing plants for film capacitors located in five countries on three continents. Two of these factories are in India: one in Maharashtra (Nashik) and another one in Haryana (Bawal)."

In terms of new trends or advances in power capacitors, he said, "Some of the recent trends include design considering the lifecycle cost; use of 'green' materials that are compatible with RoHS, REACH and WEEE; capacitors with high harmonic capability and high inrush current capability; use of thinner base films; development of new metallisation profiles; development of capacitors for new and emerging applications such as HVDC, renewable energy, etc; use of alternate polymeric dielectric materials; use of advanced design and simulation tools; special testing methods for reliability and life estimation (such as harmonic capability analysis, thermal modelling etc) and an increase in unit voltage and power rating."

Issues in the sector

About the large unorganised sector, Dr R Venkatesh said, "Considering the size of the country, the policy framework and the fragmented and distributed market, it is inevitable that there are multiple suppliers and that the sector is largely unorganised. While it is important to promote healthy competition and entrepreneurial initiatives, it is also important to enforce basic minimum quality of products, irrespective of the source, by proper legislation or regulations. The role of the government should be to create standards and enforce compliance in order to ensure a basic minimum quality and safeguard our distribution systems without compromising performance and safety."

Vishal Basotra said, "The capacitor industry in India is quite price-sensitive due to a lot of domestic players because of which prices eroded substantially during 2009 to 2011. However, no major threat was observed from overseas manufacturers like China. In the unorganised sector, there are some suppliers who are at the lower end of the value chain and whose products get sold in rural areas. Customers buying these expect the lowest prices and the life of the capacitor is not a priority. The industry at large is not affected by these, as the suppliers and market for such products do not interfere with the organised market. However, the capacitor as a product earns a bad name due to its under-performance."

Govt policies and the way ahead

Vishal Basotra said, "The government has a very important role to play in enforcing regulations to penalise consumers who are responsible for poor quality of power in the network and incentivise better performing consumers. This can be done by framing standards addressing power quality related issues. State utilities in Maharashtra and Chhattisgarh have already started issuing notices for poor power quality. However, these need to be supported with legal tools, penalties and incentives and so on to achieve effective implementation. The metallised polypropylene film (MPPF) has zero customs duty as per the notification by the Government of India. This has helped the capacitor industry in keeping the cost at optimum levels."

The industry depends on imports for some of its raw materials like metallised polypropylene film. But industry players pay a hefty amount of duty. Queried about what the government should do in this regard, Dr R Venkatesh said, "About 60 per cent of the critical raw materials for the manufacture of capacitors are imported into the country. We are one of the few manufacturers who are backward integrated and metallise the base films using our most advanced metallisers. This means we only need to import plain base film with lower import costs thus saving the nation precious forex. Since capacitors are essential components in power systems and are energy-saving devices, the government has granted concessions related to their import, and capacitor manufacturers can make use of these concessions. Apart from duties on raw materials, the government should also consider imposing anti-dumping duties on certain types of completely finished capacitors that are imported into India from certain countries at costs lower than the material value. Such measures would benefit the Indian capacitor industry."
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