T&D investment is high on government priority and power evacuation constraints and high transmission losses have attracted the attention of policy makers for more investments in the transmission infrastructure space to match the investment in power generation. The government has launched initiative like ‘Power for All’ and several schemes to catalyse the growth of power sector such as dedicated green energy transmission corridors are planned to generate power through renewable sources.
Sharan Bansal, Director, Skipper Limited shares his views with Sandeep Sharma about his company, core competencies, products/solutions offered, manufacturing base, capex planned, achievements in FY2015-16, major clientele, projects, power transmission and distribution business potential, challenges before the power sector and the way forward to boost power sector growth. Edited Excerpts...
Tell us about your company, objectives and core competencies?
Established in 1981 as ‘Skipper Investments Limited’, is a leading manufacturer for Transmission & Distribution Structures (Towers & Poles) and Plastic Water Pipes. The company was renamed Skipper Limited in 2009. With more than 30 years of domain knowledge in power, it is a crucial player to support infrastructure and power projects.
Skipper Limited is one of the world's largest Integrated Transmission Tower manufacturing companies with Angle Rolling, Tower, Accessories & Fastener manufacturing and EPC line construction. Our manufacturing capacity is among the top 3 in India and among the top 10 in the world. It is the only company in India which has a control over the complete value chain, resulting in control of 80% of costs for any tower line project. The global market reach spans across 20 countries some of which are from South America, Europe, Africa, the Middle East, South and Southeast Asia and Australia.
The objective has always been to support the current Govt. policy of ‘Make In India’, which aims to promote products manufactured within India in the global market place. We look forward to produce world – class quality products ensuring robust National Infrastructure development and making India the preferred sourcing hub for Global Infrastructure needs.
What kind of products and solutions do you offer for the Power sector?
At Skipper Limited, we offer a full-range-cum-diverse product basket ranging from 66KV to 800KV Towers (Single Circuit, Double Circuit, Multi-Circuit Towers suitable for Twin, Quad and Hex Conductor configurations). The company also has the largest Monopole designing & manufacturing unit in India of application upto 400kV in Transmission sector & rising up to 40 mtrs in Telecom.
After achieving leadership and manufacturing excellence in Towers, Fasteners and its accessories, the Company is currently involved in inculcating superior project management and execution expertise in its EPC business for clients and provides value-added turnkey solutions.
Could you provide us some insight about your manufacturing base and capex for the future?
Skipper Limited owns three Power Grid approved manufacturing plants with an installed capacity of 2,00,000 MT per annum. The manufacturing base of Skipper can be outlined as:
• 7 in-house galvanizing plants up to 12 m length, 2.5 m width and 3 m depth
• 35 Angle and Plate CNC lines
• Zero machine downtime with 3 units back-up
• Nut bolt capacity of 600 MT per month i.e. 7200 MT per year
• In-house MS & HT Angle Rolling (upto 200 X 200 X 25) that guarantee all time availability
• Machinery and latest technology of manufacture is imported from Italy and China
• In-house Engineering and Drawing department to provide Optimized Design solutions for all client requirements
The company has added up incremental capacity of about 15-20%. Since the basic infrastructure is already available with the company the additional capex cost will be around Rs 8000-10,000/MT totalling Rs 20-25 Crore.
How was the FY2015-16 in terms of projects bagged, business generated, growth achieved in both domestic and international markets?
2015 -16 has been fairly decent, where the company has bagged several bids especially from Powergrid in the domestic market. We have added Rs 1400 crore of fresh new orders in the last Financial Year, and our current order book stands at Rs.2400 crore which gives us a revenue visibility of 2 years from now and achieve a revenue target of 15 to 20%. The order mix consists of both national and international clients which also includes our first order supply from Egypt.
Who are your major clientele and which are the projects you have been associated with?
Our clientele includes mainly Power Grid & the State Electricity Boards in the domestic market. In the international arena Skipper was chosen among a global pool of 20 large manufacturers to enter into an exclusive Alliance agreement by Latin America’s largest TSO for their projects. Major achievements include the designing and testing of 500 KV S/C and D/C towers for South American client. Tower designed and tested successfully include:
•Nigeria -132 KV D/C towers
•Chile – 500 & 220 KV D/C towers
•Peru - 500 KV S/C, 500 KV D/C towers
•Spain - 750 KV S/C Portal suspension tower
Some of our EPC Projects:
•400 kV D/C (Quad) Bhadla-Bikaner Transmission
•400kV D/C Panchkula-Patiala Transmission Line
•400kV D/C Allahabad-Kanpur Transmission Line
•800kV HVDC Gorakhpur-Gomti River Crossing
•800kV HVDC Islampur-Saharsa (Package A-4)
What's your take on the initiatives required at the Government level to improve Power Transmission infrastructure in India?
T&D investment is high on government priority and power evacuation constraints and high transmission losses have attracted the attention of policy makers for more investments in the transmission infrastructure space to match the investment in power generation. The government has launched initiative like ‘Power for All’ and several schemes to catalyse the growth of power sector such as dedicated green energy transmission corridors are planned to generate power through renewable sources. The per capita consumption of power in India is around 90 kVA per person, compared to the global per capita consumption of 313 kVA per person and China’s 447 kVA per person. The country’s growing population, rapid urbanization and accelerating industrialization will drive the demand for power consumption in the coming years. Further, growth in the power sector will be catalysed by the government’s decision to create 100 smart cities, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), Restructured Accelerated Power Development and Reforms Programme (R-APDRP), and North East India transmission investment. Current year budgetary allocation towards schemes in the power sector are up by over 50% to INR 122bn, with almost half to strengthen urban electrical network, smart metering and city-level GIS .
Government’s UDAY scheme is focused to help improve the current state of the Discoms. Overall, the government seems determined to remove all the bottlenecks concerned with the Power Industry.
What potential do you see for the transmission and distribution structures business in India? What's your market share so far?
As the power generation business goes through a dull phase, the power transmission and distribution (T&D) space is in top gear. With the government deciding to tender out transmission projects worth Rs 1 lakh crore, the sector opportunities has increased manifold. Government of India has launched a scheme called ‘Power for All’. This scheme will ensure that there is 24/7 continuous electricity supply provided to all households, industries and commercial establishments by creating and improving necessary infrastructure. It’s a joint collaboration of Centre with states to share funding and create overall economic growth. Currently 17 states have joined the scheme. All this makes T&D a sunrise sector. We have a total market share of approximately 8 to 10% of the overall sector.
What are the challenges being faced by the Power sector companies in India?
There are many roadblocks faced by the Power Sector in India, few are listed below:
•Fuel availability is a major concern faced by the industry. The Coal supplied by Coal India Ltd (CIL) hardly meets around 65% of actual coal requirement of the thermal plants, leading to increased dependence on imported coal. This results in increasing power generation costs due to limited fuel availability.
•Increase in the operational inefficiencies and outstanding debts have led to poor financial health of state discoms. As much as 25% of the generated power is lost in transmission in India as compared to a maximum of 5% in other Asian countries like China and South Korea. This is mainly due to lack of state-of-the-art infrastructure. •Land acquisition issues delays the development of new power projects or makes them expensive due to high cost. Installation of power plants in any case, requires huge investments and the land acquisition cost pushes the capex to unprofitable and unsustainable levels.
•Power theft is rampant in the country. Local authorities are often hand-in-glove with the power thieves. This causes huge revenue loss to the exchequer
What is the way forward for the stakeholders to boost growth of the Power sector?
Prime Minister Narendra Modi's decision to open commercial coal mining to private players is a key step towards bringing order to the country’s chaotic power industry that hinders its economic rise. The way forward to further boost growth of the sector can be outlined as:
• Developing new avenues of renewable energy in India's energy basket
• Improving infrastructure
• Opening up the power distribution sector to the private players to encourage fair competition and bringing an end to all populist measures
•Laws against power theft and a greater emphasis on the implementation of those laws