Friday, December 15, 2017

Power Zone

It is a matter of great pride that the country’s power system gets backed up by us

 

 

Incorporated  in 1946, Kirloskar Oil Engines Limited (KOEL) is the flagship company of the Pune based Kirloskar group. KOEL is an acknowledged leader in the manufacturing of diesel engines, agricultural pumpsets and power generating sets. SHRIKANT RAO spoke to SANJEEV NIMKAR, VICE PRESIDENT & BUSINESS HEAD FOR POWER GENERATION, INDUSTRIAL AND CUSTOMER SUPPORT BUSINESS, KIRLOSKAR OIL ENGINES LIMITED for an understanding of the contribution of his company in the diesel engines and power generation space.   

 

 

 

Briefly take us through the key areas of focus for Kirloskar Oil Engines Ltd?

 

Kirloskar has been a brand in the country since 1888 and is a household name, and has become generic name in engines for the last 68 years. We operate mainly in the diesel engines space. We offer products in four domains: Power generation; Industrial off-highway engines, which go basically in construction equipments, earth moving equipments and material handling equipments; Agricultural engines, which are used in pump sets; Large engines, which are used for very big mega projects. When it comes to large engines two years back we received Rs 400 crore single order for gensets from the National Power Corporation of India which back up their power stations and are of the magnitude of 5 megawatt (MW) DG set each. It is matter of pride for us – that the country’s power system which supplies power to the common man gets backed up by us. When it comes to the power generation side we supply engines from as low as 5KVA to 625KVA in a single unit. We also supply a combination of multiple units upto 5200KVA.

 

 

 

Give us an understanding of the support KOEL is offering to the power sector in India.

 

India is a developing country and like other BRIC countries there is a demand supply gap in the availability of grid power and we anticipate , this gap will continue  at least for the next 10-15 years. If we look at the last 5 years this power gap was always  8-10 percent. In the last one year incidentally because of the economic slow down this power deficit came down to about 4-5 percent but now with the new government in place the gap will once again go back to 8 to 10 percent irrespective of how many power stations come up in the country. We will continue our contribution in Nation building efforts by providing back-up power  and support GDP growth.

 

 

 

What is your specific plan to fill this void?

 

We actually anticipated the requirements five years back and invested  Rs 600 crore in a plant at Kagal near Kolhapur, which is one of the state-of-the-art plants in the country when it comes to engine manufacturing. We have followed Japanese manufacturing model out there and the plant is comparable or better than any multi-national company in terms of product processes and the quality of the products. Now going forward last year we launched a program called “Power of Ten” where we offered 10 years free service to our customers for our gensets. This is a clear reflection  of the quality of our products as well as our commitment to the customers.  Apart from that we are also planning to enhance our range of new products. We have a range up to 625 KVA. We will be adding in the next quarter 750 KVA and another quarter down the line to take it to 1000 KVA. Maybe a year after we will look at the 1200KVA or 1500KVA range. In this range our company will be the first company in India who has developed these engines with indigenous technology.

 

 

 

What is the percentage of the market share of these engines?

 

By far we are number one in terms of market share in the country by volume. If you look at the number of power gensets getting sold in the country we are number one with 34 percent  market share.

 

 

 

How has KOEL been impacted by JCB’s decision to develop its own engine? 

 

Two years ago JCB decided to introduce its own engine here because they have significant volumes in India. It did impact our business somewhat but we found out other customers and balanced it out. But JCB still remains a good customer for us because we still continue to supply to them in  few other segments. We remain a very significant player in the country when it comes to supplying basic engines to industrial equipment sector and to construction equipment manufacturers. So when MNCs come to India in these sectors,  for them KOEL engines act  like a passport. They approach us for engines for their machines because our products are proven in the Indian conditions and we know what it takes to serve Indian customers. Koel is holding more than  35 percent share in this segment as well.

 

 

 

What is your current capacity?

 

Our current manufacturing capacity is close to 200,000 engines per annum and currently it is used to the level of 130,000. So 65 percent is the capacity utilisation and next five year capacity requirement is already taken care of. We may need further expansion after 5 years.

 

 

 

Tell us about your manufacturing facilities?

 

We have four plants. The Kagal plant is the state-of-the-art and is our flagship plant. We have a plant in Pune which takes care of  the high-end  side engines. The plant at Nashik looks at large engine. We have a plant in Rajkot which basically takes care of the agricultural engines for the pump sets.

 

 

 

Tell us about important projects where you have supplied engines? 

 

National Power Corporation I have already mentioned , MCA Stadium at Pune which is completely lit up with the backup of KOEL DG Sets. You will be surprised to know that all the matches played here rely 100 percent on DG backup and not on the grid line. So that means our DG sets are the main source of power when the matches are played. Apart from this the Common wealth games in 2010  were all backed up by KOEL DG
set power.

 

 

 

What role do you see to play in the areas of industrial corridors and smart cities?

 

There are several industrial corridors coming up in the country and Pune is already one of them. Pune is today a proven hub for the automobile industry and our product line is also related to the same  sector. Since our supply base is at a stone’s throw  away  which makes us an extremely reliable supplier of gensets or engines in the industry . Having said this  we are also looking at other industrial corridors coming up across country for opportunities, so that we can plan  other manufacturing units in our growth journey.

 

 

 

Tell us about the important firsts of your company like records you have created?

 

We have also supplied some gensets to the Indian army in Ladakh which operate at almost -20 to -30 degree Celsius The fact that those gensets are working very well there is one of the great achievements for us technologically. We are proud of their trust in us and that our products are proven in such extreme working environment. We have also found entry into the Limca book of records for signing wage agreements seventh time consecutively  every third year for the last 21 years with our union even before the agreements were  due. That, in an industrial setting where you see so much management and worker turbulence, is remarkable. It is an envious situation for any company in the manufacturing sector and a reflection of our cordial relationship with our team associates.

 

 

 

What in your view is KOEL’s USP?

 

Our USP is that we know the nuances of the Indian customers usage patterns like no one else.  When you put a genset in Kashmir it will be exposed to temperatures of -10 degree Celsius and when you put the same genset in Orissa you will be exposed to close to 48 degrees in summer. The genset has to weather out both extremes and still perform. With the help of  technological innovations we have arrived at a right recipe which is economical as well as reliable and that becomes the USP for our products. So when we hold a 34 % market share in the country it is because of our products which are proven for a number of years in the market. Also we have more than 5000 service technicians placed across country at 500 different locations. You call at our CARE centre and within 2 hours our service technicians will be at the site to take care of the equipment.

 

We have fully equipped CARE centre working 24/7. Five months back at around midnight our call center received a call from Patna saying that there was a marriage ceremony going on and there was some problem in the generator and it was completely dark. Within half-an-hour our team reached the spot and the generator was restored within no time. Needless to mention , the brides fatther called second day morning to express special gratitude to KOEL.  That is the kind of commitment and service we provide.

 

 

 

Kirloskar is seen as a emerging Indian multinational. Tell us about your market overseas.

 

The vision of Kirloskar is to touch the world by 2025. Export becomes the significant part of our strategy so currently we are present in close to 65 countries with the product and our brand. Out of these close to 30 countries we are supplying almost on a monthly basis. We will be consolidating our position in these countries where we are looking at significant gains in the market share in next 2-3 year’s time. The countries we are looking at are basically SAARC, South-east Asia, UAE, the entire Gulf region—and of course, Africa, countries like Nigeria, Kenya which are very important markets for our genset business and where we have our offices as well.

 

 

 

How do you view the invasion of Chinese equipment manufacturers both in India and in the international market?

 

In India we are not worried about the Chinese invasion in genset industry because the buyer is very intelligent. Unless it is an extremely proven product they will not go for a Chinese product here. It is our assessment that Chinese suppliers are opportunistic and do not look at consistency and long-term relationship with the customers. So  far as Indian domestic market is concerned we don’t see much of threat from China here in India. But China becomes a threat in the international market because China carries a low image and lot of people outside also consider India in the same basket unfortunately.

We as a country  has a  long distance to walk to get recognition in manufacturing sector.

 

 

 

So how do you distinguish yourself from China in those markets?

 

Currently our strategy is that, in the countries where we have a presence over a number of years and where we supply on a monthly basis we have a good distributing network. Our brand is taken as positive and reliable in these markets. This is helping us to create our own brand image. Fortunately for us China players does not seem to work  on the consitency of quality as well as brand building. But this may not last much.

 

 

 

There is a view which favours government protectionism for Indian manufacturers in terms of Chinese being kept out from the market?

 

We don’t feel so rather making it open can only improve Indian manufacturers and that is my personal view. I take it in a different way Chinese products coming to India will make us much more robust and competitive. This  will push us to become more cost competitive while maintaining the quality.

 

 

 

Tell us about your emphasis on R&D?

 

Kirloskar has a vision that by 2025 we want to be a global company. Innovation is a  fundamental value of the company. Otherwise you won’t be able to sustain it as a global company. So we are investing a good amount of money on R&D i.e. close to 2 percent of our topline. All our high-end gensets currently supplied to the market are equipped with a remote monitoring system.

 

Gensets can be placed anywhere in the plant or remote places , our customer's maintenance team as well as KOEL support team will be constantly aware of all the operational parameters of these DG sets: if there are indications of anything possibly going wrong we get to know it and are able to address them in advance. 

 

 

 

Briefly tell us about your emphasis on Green building and sustainability?

 

We got international recognition last year from the Netherlands, a certification on sustainability maintenance. We have also received several energy conservation awards for all our plants from CII . It is an integral part of the system at KOEL that all our products and manufacturing processes follow green principles. Apart from that we have CSR initiatives called Vasundhara in which we promote wildlife protection, environment protection. We also arrange film festivals where we have been connected with 250 NGOs who work on different themes related to environment and we  are doing this for last eight years. The participation is more than 20,000 volunteers now. We have also a sanitation education program for school children called WASH where our employees visit these schools round the year.

 

 

 

What is the outlook for the future? How do you see 2014-15 materialising for the company?

 

Last year we touched a turnover of Rs 2,300 crore which is flat compared to the previous year; however the industry decline itself was almost 20 percent. In 2014-15 we hope for a better economy because of the new government settling down and we're hopeful that markets will grow by 15 percent. Our current order book is very healthy and things can only improve further.

Comments



Saturday, June 21, 2014

rakesh rathod

Very insightful

Saturday, June 21, 2014

RAJIV KAJGIKAR

What ever has been said by Mr SanjivNimkar is true.Though the no of players are more in our segment but we feel that our strength is service.We give unmatch service to all our valuable customer to retain our brand in no 1 position in the market.We all wish a great succcess to them in future.

Friday, June 20, 2014

B V GODSE

Fully agree with our VP Sir and we at our end will strive hard for Good sales and Branding the Product. We are Proud of our Principals, KIRLOSKAR OIL ENGINES LIMITED.


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