Control panel and switchgear industry must rise to occasion
In a rare interview with EPR, Soeb Fatehi, President, Control Panel and Switchgear Manufacturers’ Association, shares his outlook on the control panel and switchgear industry
The government plans to focus on infrastructure sector in 12th Plan. How do you see control panel and switchgear industry going ahead with this development?Focus on infrastructure as announced brings hope for millions of Indians who still live without electricity despite having connection. The 12th Plan envisages a return to a balanced outlay where generation almost equals transmission and distribution for expense allocation.
This will make available resources for growth. Naturally the control panel and switchgear industry will be elated. But with the good feeling, they must rise to the occasion and deliver quality on time. If they fail, the will have only themselves to blame.
How big is Indian market for control panel and switchgear, and at what rate it is growing?The market for low-voltage (LV) control panels and switchgear has registered a steady growth in the last decade except for the last 12 months. Growth has tapered down in the last period for most companies. This is attributed to sluggishness in decision making for a variety of reasons at the buyer end. We are confident that the next 12 months will see a spurt in demand again. Demand will also continue to grow in the medium and long terms because India has earmarked large development resources for plugging the energy gap.
What are the challenges faced by the industry?I’ll divide the answer into two parts. About 70 per cent of the demand for the control panel and switchgear business in India is catered to by MSMEs, which suffer in productivity mainly because of poor infrastructure in all the state industrial development (IDC) zones. Almost all the IDC zones are now over 4 to 5 decades old and still without basic amenities like roads, transport, uninterrupted power, clean potable water, healthcare facilities near to work places, and security from theft. This dumps them with consequent problems like high costs to overcome the shortcomings of infrastructure, inability to attract and retain the best talent, and low productivity.
A large number of MSMEs have difficulty is creating a structured business as well as development plan. These are frequently deficient in access to business and market intelligence. Many suffer from poor understanding of inventory, supply chain management, debt and credit management, process optimisation, and the non-acknowledgement of the need to source access the best professional advice.
In the last decade, however, things have improved in many pockets. The big picture still leaves great room for working. In many organisations, the second and third generation of ownership is now bringing new learning through higher professional education and wider exposure.
The remaining 30 per cent of the volumes that come from the large sector players have a different set of constraints. Productivity remains a concern, and they too face capacity utilisation issues rising out of erratic demand patterns. How is the industry coping up with those challenges?Industry is built by entrepreneurs who are high on innovation and creativity. We depend on these basic instincts to search for and find ways of elevating our constraints. Industry has realised the need for investment in internal development of people, processes, and products. Even small and medium companies are using platforms of associations and chambers of commerce to collaborate for growth.
In global market, where does India stand for control panel and switchgear?Having built products exported in more than 20 countries, I proudly say that we are definitely not inferior in our goods and services. I also have the good fortune of having been responsible for substituting proposed imports for prestigious public projects. Speaking about the cross section of all in the trade, I submit that what we did in our past is not enough to carry us on. Industry must shake off complacency and continually re‑invent itself. We must re-learn our basic definitions of costs and strive to become competitive again.
Indian manufacturers in the MSME sector regularly lose out on global opportunities because they are slow to adapt changing customer expectations. That is compounded by very high costs of testing and certification of products and acute shortage of testing facilities resulting in waiting periods of many months for laboratory availability. BIS have yet to harmonise with IEC 61439, and consultants and users in India still lag behind in raising the acceptance bar. Some opine that it is a vicious circle where the market resigns that it is forced to accept what is offered and manufacturers take shelter saying that they are meeting customer expectations. However, today the customer has a many choices.
What are the emerging trends you are witnessing in both industries?Control panel and switchgear industry all over the world is racing ahead in building ergonomically superior and progressively safer products using better engineering plastics and finer metallurgy.
Higher intelligence and wider communication is being packed into automation of processes, handling of larger volumes of data, and easier communication. Manufacturers are under pressure to adopt green measures and self-realisation of the need is also higher than before. Control panel and switchgear manufacturers require to focus on standardisation of products for reduction in lead time, upgrade of safety standards, and cost to the customers.
What are the developments happening for circuit breakers?Circuit breakers in the LV domain are becoming faster, smaller, and more intelligent. Better thermal design enhances performance inside the panel. The biggest development in circuit breakers is the ability of the switchgear to communicate with data acquisition, monitoring and control systems across large networks, and this is driving the race in a market that once appeared to be flattening. Tell us about import and export scenario for both industries.There are many imports of control panels and switchboards into India. These are generally imports of control panels and switchboards as part of large projects along with machinery. Other than these, most requirements are met locally by our manufacturers.
The scenario for exports remains weak because a majority of our manufacturers still have not adopted the latest IEC standards and are still lagging in standardisation or products. If they have to go global, they must think global first.
Tell us about R&D activities taking place in the industry.Our MSME industries are not investing in R&D sufficiently. R&D is done mainly by large companies who have deep pockets and different cost structures. The digitalisation of almost everything is driving R&D into control and communication upgrade all the time.
Efforts are on majorly in the areas of materials. Global volatility in prices of polymers and metals is driving R&D to address lowering consumption and substitution possibilities. Indian R&D is also focusing on localisation of components and products to build a competitive edge. What is the outlook for next 1 year?I’d say bright. Local demand will grow substantially as large infrastructure spending will be visible in election year. A slower growth year, which has just passed, has consolidated and rationalised resources and capacities for manufacturers.
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
Control panel and switchgear industry must rise to occasion