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Communication Feature | October 2017

We are expanding our Nashik facility and adding manufacturing space

<span style="font-weight: bold;">Natarajan Balakrishnan, Managing Director, EPCOS India Pvt. Ltd</span><br /> <br /> <span style="font-weight: bold;">How has the growth of your company been over these years? What are your plans for capacity expansion?</span><br /> The growth of our business in India over the past 20 years has been very satisfying. The initial 15 years continuously gave us healthy, double-digit growth, supported by several additions in the product offerings to the market. We have been adapting our organisation, both in manufacturing and sales, to match the market development and we will continue to do so. Currently, we have a major expansion happening at our Nashik facility, with an addition of nearly 20,000 sq mt. [Cf. Corporate Chart: 'Expansion in progress 20,000 m'] of manufacturing space. <p></p> <p> <span style="font-weight: bold;">Kindly share with us the status of your order book and order backlog. Are you working on any government projects?</span><br /> In the kind of dynamic market conditions that businesses operate in today, I would say any input on our order book and order backlog position would be meaningless. In the time lag between my giving you the statistics and the publication of this issue, the situation could significantly change. Having said so, we have a healthy order book and order backlog situation, but the company in India has seen much better positions in the past. I am hoping that reform measures initiated in the past two to three years and the resultant market development will get us to the point of influx towards a steeper growth.</p> <p> We do participate in government projects, for example: <br /> with the power distribution companies/state utilities in their initiative towards improving the power factor and power quality. Due to the nature of our portfolio we normally associate ourselves through an EPC contractor, and seldom execute a project directly. </p> <p> <span style="font-weight: bold;">The sector was expected to capture major market share, how well is it doing?</span><br /> As a global manufacturer of electronic components with a portfolio that is very well suited for the existing and emerging demand in India very strong presence in India, TDK is well prepared to seize these upcoming market opportunities.</p> <p><span style="font-weight: bold;">What should Indian manufacturers and the government do to maximise the growth opportunities?</span><br /> Government initiatives are undoubtedly supportive of growth, not just for capacitors or the power sector, but across all sectors. With specific reference to the power sector, there have been several initiatives with huge funding support such as the Integrated Power Development Scheme (IPDS) and Ujwal Discom Assurance Yojana (UDAY), where state utilities get support through Central funding to improve their quality of power, thereby reducing transmission losses and moving towards 24/7 power. Capacitors for power distribution applications help in improving the power factor by reducing the reactive power losses. Several state utilities are in the process of consolidating their requirements and tendering for these capacitors both in the medium-voltage and low-voltage range. Based on our strong portfolio of capacitors designed and manufactured in India, we see opportunities and business coming up in this area. To leverage the benefits of capacitors in any network or circuit, manufacturers must ensure that they offer high quality products with proper validations. As far as the buyers are concerned, especially in the government sector, it is important to ensure that their procurement criteria and purchase evaluation takes the overall value they derive from a product or brand into consideration. </p> <p> <span style="font-weight: bold;">What are the factors boosting demand? In which sectors are the market trends positive? </span><br /> As the demand for power increases, there will be an obvious increase in demand for capacitors, primarily due to the presence of reactive power loads and need to compensate the reactive load and harmonics in the system. Today, the demand is seen mainly in the power distribution sector, which is managed by the state utilities. In the coming years as the investment climate in the industrial sector brightens we anticipate an increased demand from these customers too. </p> <p> <span style="font-weight: bold;">Will this growth be converted into actual capacity expansion and higher utilisation?</span><br /> In the initial phase of increased demand players in the field would experience better and higher levels of capacity utilization and capacity expansion would depend on market indicators for sustained growth. From our side, we have been adapting our organisation, both in manufacturing and sales, to match the market development and we will continue to do so. And, as I mentioned before, we have a major expansion happening at our Nashik facility. </p> <p> <span style="font-weight: bold;">How successful have Indian manufacturers been in implementing advanced technology in capacitors?</span><br /> While the film capacitor technology is mature, the capacitor industry in India still has extensive manual operations, and in that regard, I can say that there is ample scope to improve the product and performance with the introduction of prevalent state-of-the-art technology. I must add that the industry is already seeing several improvements. Industry 4.0 standards would call for an upgrade in the manufacturing technology and sustained success would depend on players adapting to this as soon as possible.</p> <p>From my company perspective, we have one of the most advanced manufacturing facilities in India, which, as an integral part of the TDK manufacturing network, is a world-class factory for film capacitors. For instance, we were the first company in the world to introduce a 900 mm film metallisation plant in Nashik. This technology is now used by several manufacturers both in and outside India. </p> <p> <span style="font-weight: bold;">Kindly share your emphasis on R&amp;D. </span><br /> Need for emphasis on R&amp;D is obviated by the reality that for any organisation to survive today especially in the field of electronics and high tech, a default factor is successful R&amp;D. We, as a global organisation, have R&amp;D centres in Japan, China, Europe, and the USA. These centres are supported by the various manufacturing locations to address specific needs of business groups and the relevant markets. I believe that this approach will help us stay in the lead, and we will continue to invest in R&amp;D.</p> <p> <span style="font-weight: bold;">What technology have you employed, specially pertaining to the Indian market?</span><br /> In India, we manufacture metallised polypropylene film capacitors, products and systems for power quality, and ferrite cores. Our R&amp;D activities in India revolve around adapting these products to market requirements and at the same time are aligned closely with the activities at the relevant R&amp;D centre. Our R&amp;D team in India is supported with adequate laboratory/test facilities and our activities start right from the film metallisation process and extend to the final assembly, including process engineering. <br /> </p> <p><span style="font-weight: bold;">What are the challenges? Do you see a price war vis-a-vis global players?</span><br /> As a member of the TDK Group, we are a global company, but one with a strong presence in India. As with any business, the biggest challenge is to stay competitive and be the first to reach the customer. The challenge that is unique to the products we produce in India is that the technology is mature and there are many players. We are striving to sustain our success in such an environment by offering competitively priced products of highest quality, serving specific needs of the customers, addressing the cyclic and seasonal nature of demand and ensuring total customer satisfaction. As the first MNC to enter India for capacitor manufacturing with a broad product spectrum, we have been able to sustain our leading position despite stiff competition. </p> <p> <span style="font-weight: bold;">Share your views on reactive power management.</span><br /> 'Reactive power management' means managing reactive power from the inductive load consumed by motors, transformers and similar loads. This has two elements, namely, managing the power factor and managing the harmonics. By getting the power factor close to unity one can reduce network losses, save costs and the penalties levied by utilities. Harmonics are generated when there are non-linear electronic loads like drives, converters, rectifiers, huge networking equipments, etc and reducing harmonics leads to saving costs, reduced overloading and increased equipment life. Power quality management is becoming increasingly important as the power grids and industrial infrastructures become more and more complex. We are well-positioned to serve our customers with state-of-the-art power quality solutions.</p>
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