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Balakrishnan Natarajan, Managing Director, EPCOS India Private Ltd

19 Mar 2018

Demand for electrical equipment set to rise due to thrust on renewable energy

Balakrishnan Natarajan, Managing Director, EPCOS India Private Ltd., shares his views on the recently announced Union Budget, challenges facing the electrical equipment sector and government’s efforts to revive the power distribution segment. Excerpts:

Please share your outlook on the Indian electrical equipment industry in terms of growth drivers, market size and business prospects.

With the Indian government’s focus on the reformation and transformation of the economy under a wide range of initiatives, including Make in India, digital governance, Infra development, renewable energy, inclusive growth and others, many promising opportunities are opening up for TDK as a strong and reliable partner including the electrical equipment industry.

Among several initiatives, the relevant ones include energy sufficiency, 24x7 power, rural electrification, power for all, renewable energy with emphasis on solar energy, road and rail infrastructure, smart cities, mobile phone manufacturing and automotive sector with ambitious target of converting to electric vehicles.

All of these industries use electricity in abundance and there is a need to keep the power quality clean with regulatory restrictions and application demands. So, in our view the electrical sector will see considerable growth. With our manufacturing capability within the country, we will be able to address the growing demand with innovative cutting-edge products designed specifically for these application areas.

With the government embarking on mega initiatives like Saubhagya and UDAY, how is it likely to impact demand for electrical equipment like capacitors and transformers offered by TDK in India?

The government’s initiatives are undoubtedly supportive of growth and there have been several initiatives with huge funding support to the state utilities 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.

The regulatory measures to limit power factor as also harmonic distortions in the system also offer huge potential for products like active harmonic filters (AHF, static var compensators and generators (SVC and SVG), etc. To leverage the benefits of capacitors in any network or circuit, manufacturers must ensure that they offer high quality products with proper validations. And 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 while awarding any contract for an optimum return on investment.

Please share existing presence of TDK in India with respect to category of products, investments made, and growth achieved over the years.

We are a strong player in India and continue to strive towards growing our business. Our focus so far has been on industrial electronics, energy and household appliances, and in these segments our products enjoy excellent positions.

For example, in PFC, we have a market share of more than 40%, in AC Caps we have a market share of more than 30%. In the future, we are aiming to expand our position in the growth markets of automotive, ICT and IoT. Thanks to our comprehensive portfolio of electronic components and systems, TDK is an industry leader and well-positioned for these target markets.

We recently concluded the expansion of our Nashik plant to optimize our resources and operations. The plant has been expanded by an additional 16,800 m², and now has a total area of 40,000 m². The expanded facility is now functional and we anticipate that the expanded facility will strengthen our position in the market.

How has the Goods and Services Tax (GST) impacted the sector’s growth?

GST has already started making a positive impact in terms of ease of transacting interstate business. The transport time have come down considerably due to the zero waiting time at state borders. Having said that, it needs a few more months before the overall impact can be assessed and quantified.

How has the growth in renewables (solar and wind) impacted your business operations in India? Do you foresee an uptick in demand for electrical equipment due to the thrust on renewable energy?

In the power generation segment, focus has shifted to renewable energy sources. With the changing energy mix, due to greater integration of renewable and varying loads, the demand for electric power equipment is also evolving. Electric power equipment now needs to provide for bidirectional energy flows and information exchange and allow energy storage for grid stability. Moreover, regulations, environmental and energy efficiency norms have been introduced. Further, new grid protection solutions need to be deployed in order to balance uneven renewable generation. These requirements are leading to the deployment of power quality solutions, and TDK has expertise in this area. With our portfolio, we are well-positioned to profit from the rising demand for electrical equipment due to the thrust on renewable energy.

Please share your expansion plans in future. What are the key industries which are expected to drive growth of your product portfolio?

As mentioned earlier we just concluded expansion at our facility at Nashik and plan further investments at our Bawal facility.

Please share your views on the Union Budget with reference to the power/electrical equipment industry. What are the key takeaways?

The budget reflects the spirit of working for a ‘New India’ with focus on road, rail, air transport and related infrastructure. It also includes huge outlays for power infrastructure improvement. The power and electrical equipment industry will have to rise to the challenge of bringing India's power generation and distribution infrastructure up to global standards. TDK is ready to support these efforts with world class products and solutions made in India.