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The government should encourage country-made products and introduce new reforms, Sameer Gupta, Managing Director, Jakson Group

13 Aug 2012

With the bleak power scenario currently prevalent in the country, opting for power generating sets is often the only option left with most. Sameer Gupta, Managing Director, Jakson Group-one of the biggest manufacturers of power generator sets in the country, spoke with InfralinePlus on the future of the gen-set market and the company’s prospects and plans. After taking over the reins of the family-run business in 1990, there has been no looking back for Gupta. Under his leadership, the company has expanded to manufacturing control Panels, HT Switchgear, Acoustic enclosures to undertake turnkey EPC Contracts, solar power and now hospitality.

Edited excerpts.

Jakson is on its way to set up 20 MW Solar Power Plant in Rajasthan 

Jakson is on its way to set up 20 MW Solar Power Plant in Rajasthan 

With the bleak power scenario currently prevalent in the country, opting for power generating sets is often the only option left with most. Sameer Gupta, Managing Director, Jakson Group-one of the biggest manufacturers of power generator sets in the country, spoke with InfralinePlus on the future of the gen-set market and the company’s prospects and plans. After taking over the reins of the family-run business in 1990, there has been no looking back for Gupta. Under his leadership, the company has expanded to manufacturing control Panels, HT Switchgear, Acoustic enclosures to undertake turnkey EPC Contracts, solar power and now hospitality.

What are the sectors that use your generator sets? Do you see more sectors/segments using your sets, considering the power situation in the country?

There is hardly any segment or sector, which does not use our generator sets. The demand for use of a generating set has increased not only because of peak power shortage in the country but also because of our increasing dependency on continuous availability of power. For industries and large projects, it’s the plant output that matters whereas for banks, commercial complexes, telecommunication, healthcare, airports, infrastructure, hospitality, retail, etc., it’s the continuous power availability that makes a difference. Imagine a commercial building or a shopping mall or an airport without power for even 15 minutes.

India currently produces around 2 GW of power and in the next Five-year plan there are plans to add 76,000 MW, which is more than one-third of the current produce.  Power will play a significant role in India’s Growth and to be at 7% plus GDP, India needs to add 20,000 MW of power every year.

Are your products in line with the government's initiatives for green energy? What are the measures that your company is taking to provide clean/green energy to various sectors? 

Jakson- Cummins generator sets confirm to Central Pollution Control Board (CPCB) norms. As an environment caring company we are also prepared and equipped to adapt to CPCB II norms, which are scheduled to be implemented in the middle of 2013.We have a complete range of Gas Generating Sets and wherever gas is available, our gensets are able to produce clean power with zero emissions. 

Our headquarters in Noida is a LEED certified green building with platinum rating. All our manufacturing locations are designed to cut down waste and maximize use of natural resources. 

Jakson has now ventured into Solar Power Generation and is setting up a 20 MW Solar Power Plant in Rajasthan. The power generated by these plants will be fed to the main grid. We are also helping organisations to set up Rooftop PV plants and offering Solar EPC services.   

What are your views on Court directives such as not to use generators in the Taj trapezium, to safeguard the heritage structure even during long hour power cuts?  

Government should encourage industries to use CPCB approved, fuel-efficient products made with modern technology. We use Cummins engines, which are world class and most modern in technology and support initiatives of the Government in bringing down noise and emission norms. In Agra Trapezium zone, specifically to protect the Taj, the government has provisioned for use of Gas Generating sets, which produce pollution free electricity. In fact, we are running more than 100 Gas Generating sets through the Gas pipeline in Agra zone; even the Taj Mahal is powered with Jakson-Cummins genset.  

What is your manufacturing capacity in India? What about imports? How much is the current import duty on such items? Have you asked for any revision in import duty? 

We produce 8,000 generating sets every year and with a new plant coming up in Jammu, our installed capacity is now 15,000 units per annum. We source engines and alternators from Cummins India and as such do not import. The current import duty on gensets is 7.5%.  We have not approached the government for revision of import duty but do believe that the Centre should encourage country-made products. 

What are your expansion plans for the Indian market and where do you see the growth coming from? Do you see any industrial segment driving company's growth? 

Jakson is a leading Genset and Switchboard manufacturer in the country and the market for both these products will continue to grow organically.  The growth will be primarily driven by retail, infrastructure, agriculture, data centers, besides other service sectors.  

We have major expansion plans in place. We have commissioned two new genset plants at Jammu in March 2012 and our first 20 MW Solar plant would be commissioned by Jan 2013. Our service center along with training academy at Noida would be in operation this year.  In 2013, we plan to commission our service center in Kanpur.  We are also undertaking expansion at our Greater Noida plant for manufacture of Control Panels & related products.   

We are investing in resources to position ourselves as an EPC contractor and currently have orders of 40 MW in hand to be executed in role of an EPC Contractor. Apart from Powergen, we have diversified into Hospitality sector and our first Business boutique hotel is coming up in Phaltan near Pune.  We plan to come up with two more hotels within the next two years and plan to make this a chain of hotels.  

In Bangladesh we are Distributor to Cummins Inc, and are setting up a world class Service Center. 

What are the challenges that the industry is facing and what kind of policy reforms can contribute to its growth? How do you see the market for gensets growing and your position (in terms of market share and in terms of revenues)? 

High price of diesel, low cost of imports, expected changes in emission norms, price competition from unorganised sector and Chinese products and lack of awareness of Indian consumers on long-term merits of dealing with quality country-made products are the biggest challenges being faced by the industry. 

In such a scenario, availability of gas as an alternative fuel at the right price, and creating awareness of the importance of lower noise and emissions norms could facelift the industry.  

We are doing some strategic planning to increase our market share in lower ratings and retain our market share in higher ratings. 

Are you also looking at tie-ups, both for manufacturing and/or sales and marketing? Do you also export from India? What are the advantages? 

For our Generator business, we are not looking for any tie-ups for manufacturing as we have an extremely strong, three-decade old relationship with Cummins. However, we are strengthening our position in the market with more extensive dealers to improve upon our market share within India, particularly in lower ratings. We are open to new dealerships in unchartered terrain where we operate.  

We are not exporting our products as such but we have operations in Nepal and Bangladesh.  Indian generating sets are world class and provide far more value for money compared to other brands, even Chinese ones.    

Does your association with Cummins prevent you from getting into the manufacturing of silent generator sets? If no, are you planning an entry into that segment?  

We are channel partner to Cummins in certain territories within India and Nepal. We provide service and spares as part of Cummins DBU in certain Indian areas as well; also we are Distributors to Cummins Inc for Bangladesh.  For Generating Sets, we are committed to Cummins and operate in certain regions only for which we do manufacture Silent Generating sets at our various plants in Daman, Jammu and Sitarganj. 

In our Switchgear plant in Greater Noida, we manufacture products and selectively export the same to Middle-east countries as well apart from Nepal and Bangladesh. 

What is the current capacity on solar front? Are you in any discussions with state governments to set up more such units? Solar projects are cost-intensive, so what is the timeline that the company is looking at to reach break-even? 

Currently, we are in the process of implementing a 20 MW Solar IPP. This plant is coming up in Bap in Rajasthan and is under construction. It is expected to be commissioned by the end of 2012. We are planning to scale it upto 100 MW in the next five years. These being capital-intensive projects, break-even are expected to be reached only in the 6th year of operation.

(InfralineEnergy thanks Sameer Gupta, Managing Director, Jakson Group for sharing his valuable insights with our readers. The column 'In-Conversation', is a platform to engage experts from various sectors to share their views on the different transformations happening in the Indian energy sector.)