Home News Technical Articles Interviews Cover Story Orders & Contracts
   
Equipment
Power Generation
International
Green Energy
 
NEWS  SPECIAL REPORT

Electrical equipment industry subdued in FY12

EM NEWS BUREAU ,  Thursday, January 19, 2012, 12:17 Hrs  [IST]

The Indian electrical equipment industry sustained a lower growth in the second quarter of FY12, according to statistics furnished by apex body Indian Electrical & Electronics Manufacturers' Association (IEEMA). The industry posted a growth of 4.1 per cent in Q2 (July to September), as against 13.8 per cent seen in the first quarter. With the result, the growth in the first half fell to 9 per cent.

Although the XII Plan period is expected to see investment of $300 billion and an appreciation in exports, the medium term outlook is quaint. IEEMA is of the opinion that the industry is facing a decline in enquires and order finalizations with purchasing bodies adopting a "wait and watch" approach. Uncertainty in the economic, financial and political situation has made even core sector industries like cement and steel adopt a cautious stand.

In the midst of falling domestic production of electrical equipment, preliminary data on foreign trade is suggestive of a 20 per cent growth in imports, especially from China, South Korea, Germany and other European Union member countries. In this backdrop, IEEMA has welcomed the imposition of 14 per cent import duty on main plant equipment for power plants. This move is ostensibly to countervail the rising cheap imports from China. (See Box.)

Ramesh Chandak, President, IEEMA, observed: "The adverse domestic economic situation due to high inflation, high interest costs, credit squeeze et al is having a significant impact on the growth of the industry; apart from intense overseas competition. All product sectors have shown decline in their growth momentum from Q1 of FY12."

MICRO REVIEW
In the transmission lines sector, transmission line towers have clocked a negative growth of 9.4 per cent despite a moderate growth in export orders. This indicates delays in completion of orders due to various difficulties faced by the industry.

INDUSTRY SIZE
  `crore % growth
2007-08 45,370 16.6
2008-09 46,935 3.4
2009-10 51,730 10.2
2010-11 58,315 12.7

Power transformers have maintained growth momentum, growing by 14.8 per cent in H1 of FY12, well supported by exports. Order book position of power transformers also looks healthy with major order growth visible for 200MVA-plus category. However, production of distribution transformers segment has slipped to - 2.8 per cent in H1 of FY12 with almost three times rise in imports; mainly sourced from Hungary, Germany and Croatia.

Switchgear and control gear segment has witnessed a low growth of 2.5 per cent in H1 of FY12. There has been a good growth only in miniature circuit breakers and air circuit breakers, the IEEMA study observed.

PERFORMANCE IN FY12
Segment Q1 H1
  (Apr-Jun) (Apr-Sep)
Rotating Machines 9.3 5.7
Switchgear 2.7 2.5
Cables 59.5 29.0
Conductors -4.1 2.9
Transformers 5.6 14.8
Capacitor (LT) 20.4 27.0
Energy Meters 17.3 10.5
Transmission Lines -9.1 -9.4
Overall 13.8 9.0

Although, a huge growth of 96 per cent in control cables, due to sustained demand from IPPs and infrastructure sectors, helped overall cable sector to grow by 29 per cent, demand for power cables has been stagnant in physical terms despite a moderate 8 per cent growth in the HV cable segment. Industry believes that the tonnage usage of major raw materials like copper, aluminum, etc. in overall cable sector has been declining and has affected top line of the sector.

The energy meter industry maintained its growth momentum by registering growth of 10.5 per cent in H1 FY12; thanks to sustained offtake of mainly poly phase meters by utilities under R-APDRP programme. The thrust of metering at every feeder and distribution transformer level for monitoring of power consumption is visible.

In FY11, the size of the Indian electrical equipment industry was estimated at Rs58,315 crore, having grown by 12.7 per cent from Rs51,730 crore in FY10.

IEEMA welcomes duty
Ramesh D.Chandak-Ramesh D. Chandak, President, IEEMA

"Heavy Industries Minister Praful Patel recently said that his ministry supports the recommendations of the Maira committee which has suggested 14 per cent import duty on power generation equipment to strike a balance between protecting local manufacturers and the need to import equipment to boost power production. We all know that Chinese imports are relatively cheaper because equipment makers from China benefit from low interest rates and an undervalued currency, which in itself lends to cheaper exports. If this 14 per cent import duty is levied, it will create a level playing field for Indian manufacturers to compete with imports. India now has adequate domestic capacity to fulfill the anticipated annual demand for power generation capacity augmentation, which was not the case earlier."
 
                 
Post Your RemarkYOUR REMARK
*Name:    
* Email :    
  Website :  

Remark

 
 
           

© 2017 Electrical Monitor. All Rights Reserved.