After becoming an auto and auto components hub in the country, Tamil Nadu is now emerging as a hub and lead state for power equipment manufacturing in India. A start was made in the ?60s and ?70s, when public sector power major Bharat Heavy Electricals Limited (BHEL) entered the state. This not only laid a strong foundation for the establishment of hundreds of ancillary units/vendors in and around Trichy and across the state, but also enabled private players to enter into the power equipment business.
With the advent of private players such as Cethar Vessels, BGR Energy, Doosan of Korea and Ansaldo of Italy into the state power equipment scenario and the recent commissioning of the Toshiba-JSW plant (an Indo-Japan joint venture project near Chennai), the state has become an end-to-end power equipment/ancillaries, (including boilers, turbines, balance of plant) supplier to the entire country. Manufacturing capabilities range anywhere between 25,000 mw and 30,000 mw annually.
Manufacturers can supply equipment ranging from boiler, turbine, valves, pipes, heat treatment, columns, structures, ducting to erecting and commissioning of power plants in India. ?Tamil Nadu is the Mecca of welding/fabricating of power equipment, which is considered to be critical for any power project,? says AV Krishnan, executive director, BHEL (Trichy). The industry as a whole employs more than 2.5 lakh people and continues to add more with fresh investments into capacities and technological upgrade, he says.
?Tamil Nadu is probably the only state in India where one can source all the needs of power equipment for a project, whatever may be its capacity (in mw), including equipment for super critical projects like 660 mw, 800 mw and 1,000 mw. Except L&T and Thermax, most of the power equipment manufacturers are located in Tamil Nadu, thanks to the establishment of 700-odd ancillary and vendor units across the state over the decades, particularly in and around Trichy, Coimbatore and Ranipet, which can provide pressured and non-pressured parts for any player anywhere in India with high quality and welding/fabricating capabilities,? says Krishnan.
?Tamil Nadu-based manufacturers alone can supply equipment to the tune of 45,000 mw to 50,000 mw for a projected generation of 1,00,000 mw in the ensuing 12th Five Year Plan,? he adds.
The major driving factors for Tamil Nadu to emerge as a major destination for power equipment include time-tested skilled manpower, engineering capabilities, sea ports, national highways, adapting to changing technology advancements by vendors/ancillary suppliers, raw material supplies and proven track record, says K Subburaj, chairman of Cethar Vessels.
?It is interesting to note that almost all the players in Tamil Nadu can take up the job of engineering, procurement and construction as well with critical parts such as boilers, turbines and generators, apart from supplying ancillary parts, thanks to the technical collaboration that they have entered into with foreign players such as Hitachi, Toshiba, Siemens and Alstom, among others,? says Subburaj. The vendors in TN can supply entire critical and pressure and non-pressure parts with high degree of quality in a most cost effective way, he adds.
?If equipment holds 75% of a power project, the players in Tamil Nadu are equipped to supply almost everything. As most players have entered into manufacturing turbines as well, Tamil Nadu has clearly emerged as a major hub for power equipment in India,? points out Subburaj, adding that the industry in total is generating an annual revenue of over R30,000 crore.
Says Rajappa Rajkumar, president of Bhelsia (BHEL Small Industries Association), which has more than 400 units, ?It is very difficult for any state to create such a major vendor base. Tamil Nadu could do it, thanks to the early entry of Bhel into the state. We have been here for decades and have established a strong base to not only supply to the public sector behemoth, but to meet the demands of private equipment majors as well. The vendors have, then and now, demonstrated their welding/fabricating capabilities, which are critical to any power project, apart from making and supplying hundreds of ancillaries/parts that go with the equipment.?
?It is interesting to note that the vendors, though small in nature, have been investing in technological advancements to take advantage of increasing demand for parts supply from OEMs and can even supply pressure and non-pressure parts for super critical equipment,? he says, adding, ?We have equally expanded our capacities to meet the increasing demand from BHEL and private players.?
?Together we have invested over R4,000 crore over a period of time, says Rajkumar. The basic factor for Tamil Nadu to emerge as a hub for power equipment has been the availability of skilled labour force, engineering capabilities and welding/fabricating capabilities, which are critical to any power project, he says.
BGR Energy, which started off as a boiler vendor and service provider, has equipped itself with the capabilities to take up EPC contracts after it entered into a technical collaboration with Hitachi of Japan and Germany for turbines and other equipment. ?We are putting up a turbine plant, which is in the final stages of identifying project site,? says Ramesh Kumar, president, BGR Energy.
The company is also capable of supplying 21 critical components that go with boilers and turbines and is equipped to make super critical boilers and turbines with an annual capacity of 5,000 mw now, he says.
Having understood the huge demand for power equipment in India, Korean giant Doosan Heavy Industries had acquired a company near Chennai that makes boilers and associated items. ?We are putting up a turbine plant soon to pitch ourself against competitors for EPC contracts in India,? says Ravindranath, the plant incharge in Chennai.
According to him, conducive industrial climate, engineering capabilities, design and technological skill sets, competitive labour cost, port connectivity and strong vendor base in the state attracted Doosan to Tamil Nadu.
Says Krishnan of Bhel, ?Tamil Nadu has the natural advantage of engineering skill sets and manufacturing capabilities. The important aspect is that the state has sea ports at Chennai, Karaikkal, Nagapattinam and Tuticorin to import and export equipment.
Another interesting aspect is that the number of vendors has shot up from a mere 50 in 1970s to about 700 now, thanks to the rising demand and increased dependability on the services of vendors in and around Trichy and other places in the state, Krishnan says.
However, most players concede that the ongoing power crisis in the state will decide the state?s numero uno position in the power equipment business, as the industry itself is a power intensive one and requires huge and uninterrupted power.