Kirloskar Brothers Limited (KBL) is a global fluid
management solutions provider and the largest manufacturer
and exporter of centrifugal pumps and valves from India.
With the energy sector facing a slowdown over fuel supply
issues, the company is focusing more on its pump distribution
business and overseas market to continue its growth path.
KBL’s chairman and managing director, Sanjay Chandrakant
Kirloskar talks to Neeraj Dhankher on how the company is
poised for growth in India and overseas. Excerpts.
Power sector in India has
seen a slowdown in demand
due to fuel supply issues.
How has it impacted KBL’s
We operate in eight different sectors.
We can’t expect every sector to go up.
Fortunately, our product is such that it
can be used across sectors. For example,
the vertical turbine pump can be used
in oil and gas, power, water supply and
irrigation. So we have to make sure
that the factory keeps running despite
wherever we are on the economic side
and reduce risks by ensuring that we
operate across the world.
For us, as a company, the business
from India or domestic business is 65
per cent and 35 per cent is international.
Somewhere or the other, things are not
going to be very good all the time. The
job of the management is to mitigate
the risks of operating in one market,
sector or country.
What are the recent initiatives
taken by KBL to expand footprint
in the global market?
We bought a factory last year in
America, near Atlanta. We have been
operating in the US before also but that
was on leased premises. A year before
last we noticed that the rent
we were paying was
quite high, even
what we would
have paid for
property. So we
went ahead and
bought the facility
which was twice
the size of the earlier
facility. There we assemble pump sets
to FMUL, packaging for water supply
etc. Before that, we opened a service
facility in Egypt. We have around 3000
pump stations along the Nile, installed
since late 1800s. For last 20-25 years,
we have played a part in large pumping
stations over there. We supply small
pumps for agriculture and other sectors
but the ministry of irrigation and its
mechanical and electrical department
have 10,000 large pumps. So we thought
it would be a good opportunity to set up
a service facility over there. We are also training lot of people
from that department in our pumps.
Other than that, we opened up a
plant in Sanand in Gujarat, where
30 per cent employees are women.
What kind of export plans
does the company have?
Our exports in this group started
in 1936 when we were shipping out
sugarcane crushers. It was more a risk
mitigation strategy to ensure that we
were not dependent on one market as
every market has its ups and downs.
Different countries will have different
economy sizes. For that we have to
ensure that we meet standards of that
country and make products that are
relevant to them.
Now we are sufficiently all around the
world to be able to address global needs.
Earlier we used to supply the entire
pump set out of India. Now whether it
is Europe, South East Asia or Africa,
we have the capability of supplying our core product attaching all the local
accessories to make sure that customers
are comfortable with the product and
service available. Exports also depend to
a great extent on the service facilities we
have outside the country.
Do you feel price sensitivity is an
issue with Indian customers?
Quite often we face this problem. We
try to give the best possible option to
the customer. It may not be the cheapest
for him. If you look at the power sector,
we have been supplying vertical turbine
pumps for a long time. They are high
capacity pumps and need lot of spare
parts. About 20 years ago, BSES went
ahead and tried a new pump which we
call the concrete vertical turbine pump.
This pump is made at site, no need to
ship material across. It is an extremely
simple but efficient pump. Its motor
tends to be 2 mw to 5 mw. Last few
years, we monitored the performance
of both types of pumps and presented
to our customers. The concrete volume
pump doesn’t need a stand-by pump
as it is very reliable. We have tried to
convince customers to go for these
kinds of pumps. Smarter customers have
realized that the entire system is far
cheaper. A 600 mw power station can
save $25 million which is more than the
cost of the system over a 20 year period.
In Tata’s 4,000 mw Ultra Mega
Power Project in coastal Gujarat, we
have 10 of these pumps, which are of
much bigger size. Similarly, Nuclear
Power Corporation has also gone
ahead and they evaluated it for the
What kind of growth has KBL
seen over the last few years?
The growth graph is absolutely flat
because we were doing a lot of business
in the infrastructure area for power,
irrigation and city water supply. But
because of what is happening in our
country in last few years, we have
emphasized on sectors like building and construction to make sure that
the company remains profitable. Our
primary focus has been on construction,
industry and oil and gas.
What is the company’s growth
strategy? How much capex have
you planned for 2014-15?
Capex is relative in terms of what you
can get out of it rather than how much
you invest. Most of the Indian industry
will admit that they are not working
at 100 per cent capex. In times like
this, it is how you can get more out of
what you have.
We are looking more at efficiency.
Does KBL maintain a competitive
edge with respect to the pump
industry in India?
Today everywhere we talk of
sustainability or energy savings.
Worldwide, in every pump, there is
an efficiency reduction of 2-3 per cent
every year. Today if you buy a pump
having 80 per cent efficiency, after 10
years, its efficiency will be hardly 55
per cent. Now the question is how to
sustain this 25 per cent efficiency. The
challenge is to stop its deterioration.
For this, we have come out with a
technology where our pumps are
designed in a way where this efficiency
will not get deteriorated. That’s the
lowest life cycle cost pump. If you use
this pump, the efficiency of this pump
is 85 per cent (normal pump is 80 per
cent) and its deterioration in 10 years
is hardly 3 per cent (25 per cent in case
of normal pumps). So for 10 years
the efficiency has been sustained. In
addition, there are substantial savings in
energy consumption. One 250 kilowatt of capital and the bottom line. In
times like this, lot of companies make
mistakes and take orders at any price
and on any terms. In the last three
years we have shifted more towards
the product business, which inherently
has lower order book. We are shipping
these pumps in six weeks so we could
have a project order board of `100
crore which we have to do in three
years or we could have a product order
board of `10 crore but every month
we are earning `10 crore through the
pump distribution business. That is our
biggest business in terms of size. So
numbers make no sense. of pump consumes more than `1 crore
of energy in 10 years. So if you are
able to sustain the efficiency, there are
The challenge in the future is that
we have to come up with a sustainable
product. Similarly, when you talk of
solar, in HVAC industry everybody
is using energy. We are running the
same pump on solar so you are again
saving energy. So the thought is how to
bring a real concept and understanding
So what you need is higher
efficiency, lower energy consumption
but for longer period of time. This concept is sinking among customers
in power, oil and gas, fertilizer,
How do KBL’s pump use solar
energy for operating?
This, in a sense, is new. What happens
is that whatever energy is provided by
solar panel, it comes in DC form (which
can be stored in batteries). But this solar
controller is a unique design, which is
patented in the US. In case of this pump,
if you turn the knobs, it automatically
converts DC into AC, so there is no need
to store energy into battery. The pump
will run directly. So this is something no
one has in the market as of today. And
you can run anything on it, it is not just a
pump, it can run like AHUs and provides
electricity as you want.
What are the key applications for
In power industry, we are supplying
circulating water pumps. In few of the
cases, sea water is an intake. For that
you need a pump to sustain corrosion.
For that we have concrete volume
pumps. It improves efficiency as well.
In fact we have pumps working in the
industry for last 20 years and no spare
parts are required. In construction
industry, they want to save space. To
meet the challenge we have come out
with a multiple outlet and single inlet
design. It means that a single pump
can now supply water up to 60 storey
buildings. Then, this pump is vertically
placed, which saves space.
How does KBL operate in a price
sensitive market like India?
One way of buying is through direct
pricing to cater to short term requirement.
Another way is to look at the life cycle
approach, where you talk of the total
requirement or pay pack period which
is hardly 12-14 months, then buying is
very simple. In fact we challenge the
customers that whatever the difference
they are giving to us, they should share the profit out of payback from energy
saving. So it is not product, it is a life
cycle which makes the difference.
What kind of market share does
KBL have in the pump segment
It is different in different segments. In
power, our market share is between
65-70 per cent (all kinds of pumps), in
industry it is between 25-30 per cent,
in construction it is around 25 per cent
and in the water segment it is close to
65 per cent. There is scope for improvement
in every sector when you talk about
a technology for the future. It is up to
you how fast you bring that technology
in the market. We designed the ICP
(Innovative Chemical Process) pump.
It is a zero leakage pump to cater to
alumina, steel, process industries.
How do you plan to increase your
We have segmented ourselves with
respect to the customers. We are in
eight segments. The idea is to reach to
the customers, understand them and
give them new products. So market
share in future we want to grow in
all these markets. We are growing
exponentially in the export market. In 2003, we bought SPP Pumps Ltd of
the UK. It’s been 10 years, and since
then it has grown manifold in the UK
and the US. We have now opened
manufacturing and assembly units in
Amsterdam, we are in the UK, the
US, South Africa and Dubai. We are
also keen to reach out in the global
market and strengthen ourselves and
understand their requirements.
What kind of inorganic growth are
you looking at in near future?
We are still focusing on what we have
acquired so far. Some more are on the
cards and this may not be the right
moment to disclose. But yes, we are
looking to really move into a market
globally. The pump industry and
demand are very dynamic. We believe
that we can increase our market share
(both India and globally) by 25-30 per
cent in CAGR every year. In terms of
regions, we are mainly looking at USA,
Europe, South East Asia and korea.
How many manufacturing unit
does KBL have in India?
We have seven manufacturing units
in India. Mother plant is 250 km
from Pune, where we manufacture
engineered pumps and industrial
pumps. In Dewas, we manufacture
all household pumps, in Sanand
we manufacture fabricated pumps
(submersible). The unit at Coimbatore
— which is 100 per cent driven by
women -- manufactures mini, small
Do you have plans to
ramp up capacity of your
We have enough capacity at the
moment and I am sure any movement
of time, that is not a constraint. In
Coimbatore, we are manufacturing one
pump every 20 seconds; our target is to
reduce it to 6 seconds.