Industrial growth may bounce back post election

J. R. Sapre, Director, Kirloskar Brothers Ltd. anticipates that the growth rate for Indian industry will only improve post 2014 assembly election
How is the HVAC industry doing so far?There are various sectors like power which are not really taking off as they had some problems. There is a reason to be a good growth in domestic sector. There is assembly growth in agriculture sector, but other sectors are still going strong. In some areas, there is good potential, but in others it’s still going slow.
HVAC market is challenging, infrastructure and industrial HVAC market has good potential. A customer is more interested in latest world-class technology, sustainable solutions, user-friendly designs and 24/7 after-sales service.
Tell us about the newly launched product.We have launched our lowest Life Cycle Cost (LLC) series of products. These products are designed to achieve the sustainability for higher efficiencies and ensure that power consumption is reduced. We have designed these products for continuous working applications. In water supply, process, HVAC, power sector applications these products work for almost 24/7. So for such applications, sustainability of efficiencies and working at high efficiency are very important.
The capital cost of this equipment is higher to begin with, but its true benefits come by saving which you achieve over a period of time.
We have also launched suction diffuser and triple duty valves which give excellent solutions to customers for space saving and substantial saving in pump house design.
For small process HVAC applications, we have introduced our seal less range of pumps (iCP range) which are user friendly in design with quite less maintenance.
We have also showcased our latest version of Primary Variable flow (PVF) and Secondary HVAC controllers.Are you focusing on power and infrastructure sectors only?No. In fact, we have nine verticals including power, water, and irrigation. We also have operations in oil defence and gas, process industry, domestic and agricultural range of pumps. Then we have building and construction. So we have products across the sectors.
How is this useful in the building and construction sector?The sustainable or the high-efficiency products here bring down the running cost over a period of time to make sure the product is running for a long time. Almost 65 to 70 per cent of the power consumption in Delhi is related to some kind of pumping or the other; whether it’s a water pump or any other pump. If you can save 10 per cent power, it means that one power plant is not needed. That is why, sustainability and efficiency are important for this sector.
How do you find the potential of this industry?It has a great potential as urbanisation is happening as well as the middle class is growing. More people are looking for better places to live. There would be more flats and high-rise buildings in coming days. Commercial and infrastructure activities are also growing. Space, energy saving and service availability are becoming the basic demands. So obviously our new innovative products have lots of relevance.
Are you focusing on any specific cities like metros?We have presence all over India. Major business is from metros like Mumbai, Delhi and Chennai; now that Kolkata is growing. These particular products are also very popular in the United Kingdom. We have also operations in the United States, Middle East and South-East Asia. These LLC products are very popular there. In the UK, water is provided by private companies. So the cost of operation is very important because directly the customer is affected, and these pumps are very popular in the UK.
Have you faced any kind of challenges in the past year?Business is a challenge. We have to make sure that financially, the company does well and that is the challenge. Challenge is a part of the business.
How did your company perform in the last year?Well, we had some slowdown because of power and irrigation. We may not have the growth in the top line to make sure that financial remains sound.
What is the percentage of the downfall you have experienced?We have not grown from the last 1 or 2 years, so we are trying to improve our financials and make the balance sheet very strong.
Now the FDI is through, what opportunities do you see in HVAC sector?We believe that we have a very strong R&D centre. If anything is possible to be done in this industry, we are able to do it. Our focus is to offer innovative products which saves energy, saves space and sustains efficiency over a period of time. In India, we are investing substantial amount in R&D and will continue for the future. FDI may be beneficial to some other sectors where the business would grow, but I think we will be able to cater to that development.
What are your expectations? In percentage wise, what growth do you expect in the coming year?It is being observed that the growth will be 5.5 per cent. Probably till the election takes place, we do not see a big surge in next year. Hopefully, after the election, liberalisation may happen, and I am very confident that India will grow in spite of many difficulties what we faced. We are quite confident that growth rate of 5-6 per cent can go up to 8-9 per cent by 2015.
Tell us about your manufacturing facility.We have one manufacturing facility in Kirloskarvadi which is more than 100 years old. We also have manufacturing facility in Dewas, Ahmedabad and Coimbatore. Then there are two other plants near Pune so we have six manufacturing facilities in India. We also have manufacturing facilities in the UK, US, South Africa, and Egypt — including the packaging facility in Bangkok and Amsterdam.
Do you have any expansion plan in India as well as outside India?Expansion plans will be as per the market growth. Right now, we are focused on East because East is growing. Maybe in the coming years, we would have a facility in the eastern region. We are also looking at the other places outside the country. Africa is an emerging market, so we are looking at Africa too.
How do you look at the changing scenario when it comes to the industrial HVAC?HVAC is going to grow. Obviously, we have some expansion plans in that business sector. We see a big potential for growth in HVAC sector. Though we entered late amongst many others already there; our brand has the capability to innovate. We are very confident that we will make a mark in the market as it is a demanding product.

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