‘Chinese have undue competitive advantage’

Larsen & Toubro (L&T) is targeting its power division to add sales of about $3 billion by 2015, from the $400 million currently. Ravi Uppal, president (power) and member, L&T board, tells FE about how the Chinese continue to flood the market with their products, creating an unfair competition and L&T looking at partnerships for entering the ultra-super-critical space in India.

Chinese companies are getting more advantage here. Is it hurting you?

I am definitely concerned about this. We are comfortable with competition, but not with an uneven playing field. The Chinese have a competitive advantage here, and to make it worse, we are giving incentives to the Chinese exporters, including tax benefits and interest subsidy. We are clearly disadvantaged. Let the Chinese come and set up their shop here like the Europeans and the Japanese and then there will be a level playing field.

What is the action from the government end?

There is a committee appointed under the chairmanship of the cabinet secretary and we understand that this committee has recommended 14% duty, but it never saw the light of the day. However, the net outcome is that the Chinese continue to flood the Indian market.

But there are signals from the government that import duties may not come through any time in the near future, as this would place power generators at a disadvantage.

No, why it would be? The power capacity is about 175,000 mw, we have to go all the way to 700,000-750,000 mw. This means, in the next 20-25 years, we have to do an addition of about 600,000 mw. So, on an average, we need to increase our capacity by 25,000 mw every year and this is the big story.

How competitive is the market now?

The opportunities that are available to Indian manufacturers is shrinking and the Chinese seem to be walking away with a substantial share. The number of players in the market is increasing. We are also increasing our capacity. If you allow the domestic industry to get competitive, you will create huge employment. Second, you will develop long-term security of interest and third, you will also use local materials. We are not afraid of competition. But our discomfort is due to China.

You said L&T has the resources to double capacity, but will stick to the current 5000 mw. Any plans to revise this?

No, we first want to make sure that we have sufficient order book. We, currently, have an orderbook of Rs 30,000 crore and close to 10,000 mw in turbine and generators.We started getting these orders in the last two years.

In engineering, the market has moved from sub to super-critical and then ultra-supercritical. Are you also looking at such an upscaling?

We are completely into supercritical, and are definitely looking at ultra-super-critical technology, but should allow it some more time, because super-critical technology is still sinking in, Ultra-super-critical technology needs higher temperature, higher pressures. We are discussing with NTPC and others for a joint effort to introduce ultra-super-crtical technology as a partnership technology. MHI already has designs of ultra-super-critical technology.