MIXED SIGNALS [Nov 2011]

November 25, 2011 6:31 am

Electrical equipment manufacturing industry in India has registered 16.6 per cent growth during the first quarter. Cables sector clocked unprecedented growth of 60 per cent due to a 200 per cent growth in control cable segment whereas the power cables have grown just 4 per centAccording to the Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the electrical equipment manufacturing industry in India has registered a growth of 16.6 per cent during Q1 of FY 2011-2012, maintaining almost the same growth as Q1 of 2010-2011 which stood at 16.73 per cent. “IEEMA, the apex Indian body association of manufacturers of electrical, industrial electronics and allied equipment, has based these growth figures, after analysing the production and sales data collected from its member organisations, which represent 95 per cent of the entire sector”, a statement release by the association states.
Vimal Mahendru, President, IEEMA comments, “The industry was passing through a challenging phase. On one hand there was the huge opportunity presented by the mandated ‘Electricity for All by 2012’, and yet, the challenge of meeting this inspiring goal within the balance time of this financial year was becoming a daunting task. While the electrical equipment industry was geared with production capacity, it seemed that procedural delays in releasing timely tenders and contracts, and runaway cost escalation due to price of commodity inputs were holding back electrification of the country. With China and Korea gaining a strong presence, the industry was looking to a huge challenge, in spite of the promising opportunities in front of it”. Mr. Mahendru also added that, “I am optimistic that the government is cognizant of these challenges and is keen to pave the way for exponential growth in the sector, in spite of the recent adversities. The fact that the electrical equipment industry mission plan 2012-2022 is being inked, and the fact that the Planning Commission is seeking active participation of the private sector in formulation of the 12th Plan, including IEEMA, augurs well and indicates the seriousness with which the government is looking at ensuring success”.
Ramesh Chandak Vice-President, IEEMA said, “There has been a decrease in growth during the first quarter of this year, barring rotating machines, cables and capacitors. This is a matter of concern for IEEMA. This may be due to the rising interest cost and liquidity position”. IEEMA expects the situation to improve during the rest of the year.
Product sector overviewGrowth in exports has assisted and buoyed the growth of some sectors like transformers, switchgear, cables, capacitors, energy meters, transmission line towers and conductors. However, imports are simultaneously increasing and establishing themselves firmly in domestic market thus affecting domestic players. The recent surge in imports of HV/EHV transformers, HV/EHV circuit breakers and AC motors; mainly from China, Korea and Germany is a cause of concern to the domestic industry.
“For the first time in the 11th Plan period, transmission line towers and conductors (combined) have shown a negative growth of 9.1 per cent”, the release points out. “Transformers continued to grow at a moderate rate of 5.6 per cent; driven by power transformers (mainly for extra high voltage segment) growth of 8.1 per cent. Cables sector clocked unprecedented growth of 60 per cent due to a 200 per cent growth in control cable segment. Power cables have grown just 4 per cent. In the switchgear sector, although low voltage equipment are in good demand, demand for high voltage equipment like breakers, isolators have declined”, it adds.
Renewed momentum in industrial sectors and power generation sector has seen pick-up in demand for both LT and HT motors by more than 10 per cent; resulting in overall growth of 9.3 per cent for Rotating Machines sector.
Energy meters and power capacitors continued their growth momentum and registered 20.4 per cent and 17.3 per cent growth respectively on account of regular off-take from most of the utilities and private players.
In this last year of 11th Plan, about 15,000 MW of addition to power generation is expected to be commissioned and most of the transmission and sub-station projects at 400 KV and below are likely to be completed despite the fact that most of the HVDC and 765 KV projects are likely to spill-over to the 12th Plan period.
Since it calls for large quantities of power equipment, bunching of orders with quick deliveries is not ruled out. IEEMA maintains that the Indian electrical equipment industry needs to be very alert in the wake of global competition and adverse impact of duty reduction through various FTAs/RTAs and PTAs signed and under discussion by Government of India with other countries.