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Feature | September 2015

¨The industry is optimistic because of announcements by the Centre¨

Saurabh Kumar | Senior Manager, Havells India Ltd.

How has the growth of your company been?
The company has been growing at a good pace over these years. In the last fiscal, we registered a 13 per cent growth in net revenue and 15 per cent growth in profit after tax. Havells has been continuously investing in upgrading the manufacturing facilities and focus on R&D. We plan to expand manufacturing capacity of capacitors to 5 MVAr/month by the end of this fiscal, and 15 MVAr/month by 2016-17.

How well is this industry doing?
Capacitors are one of the most versatile electrical products and their application spectrum wide. Over the last few years, the demand for power capacitors in India has been on the rise and the electrical capacitors market here is expected to grow at CAGR of around 3.6 per cent during 2014-19.

The industry is optimistic primarily because of the announcements by the Centre about proposed reforms and investments in the infrastructure and power sectors. However, India has very limited base for capacitors, due to the existing technological challenges and lack of skilled manpower.

Are government policies supportive of the sector?
Growth is inevitable in a developing economy and its expanse over the next few years depends upon the Centre´s ability to stimulate domestic demand, create new market opportunities, and facilitates access to the global market.

The government needs to focus on areas such as HVDC, high speed traction, electric automobiles etc., which will simulate primary as well as secondary demand. Enhancing the level of quality and reliability of products and services, to make us globally competitive and help de-risk manufacturing by reducing overdependence on domestic market for survival and growth.

With the increase in overall demand, Havells is initiating multi-tasking activities like educating consumer on benefits for improving power quality (reactive power compensation, harmonic filtering, transient suppression etc) and creating strong representation and following of good practices to improvise standards.

What are the factors boosting demand for capacitors?
The demand for power capacitors is expected to increase primarily due to rising demand for consumer durables and infrastructure development. India has seen tremendous growth in the electrical and electronic manufacturing sector and revenue growth here is the key driver for electrical capacitors market in the country. The importance of capacitors in the power industry is growing with increasing focus on energy efficiency in India.

The demand has increased in last six months, due to the new regulations imposed by distribution companies, which in return increase the overall growth of the industries.

Will this growth be converted into capacity expansion and higher utilisation?
This industry has the potential to meet current and future domestic and export demands based on the power sector´s growth due to strong manufacturing. However, we are facing challenges due to competition from international companies, quality issues and presence of unorganized players. There is a need to upgrade standards that encourage improvement in power quality, processes and maintenance practice.

What are the challenges you face? Have global players dominated till now?
The power capacitor industry is facing several challenges like unavailability of indigenous raw material, presence of large unorganised players and lack of proper implementation of technology.

In order to overcome these challenges, proper legislation and regulations must be enforced to ensure basic minimum quality of product and promote indigenous manufacturing. It is also important to promote healthy competition, entrepreneurial initiatives and constant technical changes to meet the requirements of product quality and efficiency.

Another challenge is the reducing share of Indian manufacturing in export markets as compared to Chinese companies. The reason for their rise is financial sops (export subsidies), easy access to raw material at subsidised rates and non-reciprocal market access.

Have Indian manufacturers implemented advanced technology in capacitors?
In the last couple of years, the Indian capacitor industry has witnessed a number of innovations in the manufacturing of power capacitors. Capacitors grew as one of the most versatile product. In order to address such a wide range of applications, technology upgradation and innovation is required.

Havells focus is on advanced capacitors for renewable energy systems (wind power converters, SPV and hybrid systems), that are expected to contribute to a significant portion of global energy supplies. These require special capacitors to enhance their energy capture and integration into the power network.

POWER TODAY suggestions:
  • Market needs to be organised and consumers educated about quality products.
  • Emphasis on energy efficiency, renewables should spur need for quality capacitors.
  • Policies to constrain material cost and encourage local procurement.
  • Policies on par with competitors and financial schemes and aids be worked out.
  • Vertical integration be taken up.
  • Uniform technological implementation across the industry, conforming to global standards.
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