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Interaction | September 2015

Domestic players need to grab opportunities provided by smart cities

Subhash Gupta | MD, Standard Capacitors & Ritika Subhash | Operations Manager, Standard Capacitors.

How has the growth of your company been? Are you working on government projects?
The demand for capacitors has definitely gone up in the last few years, partly because of a push from utility companies to charge on KVA consumed. We have also seen a lot of smaller businesses and even households off late show interest in power management through capacitors. In the last few years, our company´s growth has been in the range of 10-18 per cent. After a slight dip in FY2013-14, our turnover increased 74 per cent in FY2014-15, which is a very positive sign. Every year, we increase our targets to cater to more consumers across the country and are now looking to venture into previously untapped requirements for controlled capacitor banks for agricultural capacitors and residential capacitors too.

We work extensively with many government departments such as Railways, Ordinance Factories, National Hydro Development Corporation, Bharat Petroleum and many others for supply as well as turnkey projects and even annual maintenance to ensure a steady high power factor throughout the year. A new project with the Rail Coach Factory is underway and in prototype stage. The implementation of this will lead to the development of one of its kind power management system for the Indian rail coaches.

How well is this industry doing is the government supportive?
Analysts forecast capacitor market in India to grow at CAGR of 12.46 per cent over 2014-19. We visualise tremendous potential due to expected industrial growth in view of the plan of setting up of 100 smart cities by the Government of India along the Delhi-Mumbai Corridor. These smart cities will have industrial hubs, which would be set up on the most modern lines with advanced technology.

Domestic players need to grab this opportunity.

What factors boost demand for capacitors? Will this growth be converted into actual capacity expansion and higher utilization?
Factors that are boosting demand are the maximum demand charges, energy charges, charge on the basis of apparent energy (kVAh)--which is a vector sum of kWh and kVArh, power factor penalty or bonus rates, as levied by most utilities etc. With the tremendous industrial growth, demand for capacitors is going to be enormous in times to come.

As per available production data of capacitors, the capacity installed is under-utilised at present and there is a substantial scope of higher production with the capacity already installed. Therefore, at present, there may not be capacity expansion due to growth in demand, but sooner or later capacity expansion will take place.

How successful have Indian manufacturers been in implementing advanced technology in capacitors?
There is a vast range of capacitors being manufactured in India. Compared to many other countries, we are quite ahead in capacitor technology. So, as far as implementation of technology is concerned, this answers the question. A lot of R&D is being undertaken by Indian capacitor manufacturers and we will soon be a global leader in this field.

What are the challenges this sector faces? Have global players dominated this space till now?
A major challenge faced by Indian manufacturers is availability of quality raw material at competitive prices. We have to import raw material, especially film, which destabilises the cost of capacitor manufacturing due to currency fluctuations. To be able to compete globally, this factor need to be attended to.

Please share your views on reactive power management.
Electrical machinery as well as electrical devices connected to an alternating current system require both active and reactive power to function properly. A major function of reactive power is voltage control. Some of the major instances of blackouts in first world countries have been insufficient voltage and reactive power support systems. As a result, the onus of supplying reactive power must be shared between the provider and the consumer to ensure minimal transmission losses and better performance of electrical loads. Automatic power factor correction systems play a major role in reactive power management.

Why China pips Indian exports:

  • Financial Sops - Chinese manufacturers are given export subsidies, social security subsidies and access to financing at rates below 6 per cent per annum
  • Chinese manufacturers have access to key raw materials at subsidised prices.
  • In tenders issued by Chinese national power companies, foreign companies, including
  • Indian companies, cannot participate directly, as they need a local presence. No such conditions exist in India.
  • Easy acceptance of performance certificates - Indian utilities accept performance certificates issued by Chinese utilities and do not insist on certification by reputed international agencies.
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