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Interaction | September 2014

Capacitor market will have double-digit growth

Abraham Varughese, General Manager- Power Quality Marketing, Schneider Electric India, says that robust growth in the market will depend upon the government´s initiatives.

How far have Indian manufactures been successful in implementing advanced technology in capacitors?
India is one of the pioneers in manufacturing all range of capacitors. At present, Indian manufacturers manufacture various types of capacitors that include high grid capacitors which are not manufactured in other countries across the world. So as far as technology is concerned, India has diversified in manufacturing a variety of products. In the last couple of years, the Indian capacitor industry has witnessed a number of innovations while manufacturing capacitors.

How do you see the overall demand for capacitors in India?
The capacitor industry depends on three factors for growth: Accelerated Power Development and Reforms Programme(APDRP) projects which have high demand for capacitors, core industry growth and the replacement market. The growth also depends on the initiatives by the government as the government projects meant for infrastructure development need more number of capacitors and bigger voltage capacitors. LV capacitors are largely in demand for APDRP projects, whereas MV capacitors are more in demand for infrastructure projects. We expect the demand for MV capacitors to grow. Gradually, with the announcement of new infrastructure projects we expect a double-digit growth in MV.

What kind of growth rate do you see in the market?
The capacitor industry was stagnating for the last 1-2 years, however, we have seen some growth in the last fiscal, which was about 8-10 per cent. This includes the medium voltage capacitor and low voltage capacitor (market). In fact, the industry is almost coming to the level of double-digit growth and the growth rates will remain more or less similar in the year 2014-15 as there is some movement in awarding projects.

What are the main challenges that the capacitor industry is facing at this point of time?
In the Indian scenario, it is mainly the global players like Schneider which have strong manufacturing capabilities in India. Indian players like L&T are growing strong in the LV segment whereas ABB is very strong in the MV segment. The major challenge for the manufacturers in India is lack of quality of raw material, especially films which are imported from other countries which are extremely costly due to currency fluctuations.

Do you sense any impact on the capacitor market with the government´s initiatives: M-SIPS, the EMC policy, and the PMA policy?
I think these policies will boost the manufacturing industry directly rather than capacitor manufacturing.

Will growth be converted into capacity expansion and higher capacity utilisation?
At present, all the major manufacturers in the country have more than required capacity and going by the current trend of growth I do not foresee any substantial expansion of capacity addition. In fact our company also falls in the same category and would not have any capacity expansions as of now. Meanwhile, as far as capacity utilisation is concerned, our company is operating at 70-80 per cent.

Rahul Kamat

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