Control panel and switchgear industry is growing yet slow
Is the control panel and switchgear industry moving toward the right direction? An insight
P C Shah, Director, VNS SwitchgearGovt. should change the standards and the quality of control panels being used as in India, as we don’t have any standard IEC for control panels
India is betting high on private investment in infrastructure as the government has planned to focus on the infrastructure sector. The government hopes to invest $453 billion in infrastructure sectors in the 12th Five-Year Plan and plans to improve electrical grid network to support growing investment in developing infrastructure sector across the nation. No doubt, control panel and switchgear industry is also anticipating the silver lining.The low voltage (LV) and medium voltage (MV) switchgear market in India which was in its infancy even a couple of decades ago; has matured enough with the advent of advanced technology base.
We all are aware that every single house, commercial complexes, an industry, or power utilities in India require electrical panels to control electricity. Indian switchgear industry produces and supply wide range of switchgear used in various sectors and is capable to meet the domestic demand. Therefore, the good vibes for the control panel and switchgear is obvious.
Growth driversToday, highly-efficient control panel and switchgear applications are in huge demand across end-user segments such as industrial, construction (residential/ commercial), power generation, and transmission and distribution (T&D) utilities. Growth in key sectors such as oil and gas, petrochemicals, steel, cement, and telecom are the major growth drivers for control panel and switchgear industry. Planned investment across major infrastructures projects such as airports, metro rail, mono rail, industrial corridor are expected to drive the growth further.
Market sizeNow the question comes: how big is Indian market for control panel and switchgear?
According to Rajnish Verma, CEO, Milestones Switchgears, “The market for control and switchgear would be around ` 20,000 crore per annum.” He added, “The rate of growth is approximately 3 per cent in India.”
However, P C Shah, Director, VNS Switchgear, thinks it is all depends on the market growth.
According to Frost & Sullivan, LV switchgear market revenue is estimated to reach $2,170 million in 2017 whereas MV switchgear market revenue to reach $1,735 million. LV and MV switchgear markets are estimated to grow at a compound annual growth rate (CAGR) of 12.5 per cent and 11.8 per cent, respectively, between 2010 and 2017.
Challenges within and strategyIs the industry facing the challenges too? Yes, the industry is facing all those challenges that an economy downturn bring with it. “The major challenges these days are the funds flow,” explained Mr Verma. “The returns don’t come as accepted and leads to the consequential delay further.”
He added, “The quality manpower is also a reason because inefficient human factor and unskilled manpower create innumerable problems for the survival of industries.”
Some of other challenges are competition from unorganised sector and imports in LV segment and entry of sub contractors with minimal technical know-how and lack of standard specification.
According to Mr Shah, raw material price is major challenge. He questioned, “India also manufactures steel, but why markets like Malaysia and Singapore are having cheaper steel than India?”
Though, there is no concrete answer as to how to face the challenges, several companies are trying to be afloat by going slow or reducing manpower.
On a global platformWhile speaking about India’s stand in the global market, Mr Verma emphasised, “We cannot see much focus of any panel builder in export business. Hardly 2 per cent may be the export contribution. The main reason is the quality of raw material and end product.”
Maybe that’s why Mr Shah believes that the government should change the standards and the quality of control panels being used as in India, as we don’t have any standard IEC for control panels.
Mr Verma also echoed that there is hardly any focus on R&D in India.
ConclusionWith investment in infrastructure, renewable and alternative energy sources, modernisation of power plants and various government schemes are expected to boost the switchgear market. Switchgear industry continuously upgrades and innovate products to support the needs of industry in the nation.
