— Adrian D'Souza, Director,
Southern Power Equipment Co Pvt Ltd
Part of the multifarious Deccan Group, Bangalore-based
Southern
Power Equipment Company Pvt Ltd, popularly known as SPEC
Transformers, is a leading manufacturer of distribution and power
transformers. In an exclusive interaction,
Adrian D'Souza speaks on
the company's evolution from its humble beginnings, and shares
his growth plans for the company. He also gives insights into how
stringent enforcement of guidelines by power utilities could correct
many aberrations in the transformer industry, and ensure power
quality and sufficiency for rapidly developing India. An interview by
Venugopal Pillai.
To start with, tell us in brief on SPEC's journey of growth into a
manufacturer of power transformers.
SPEC Transformers is part of the Deccan Group, a multi-product
diversified industrial group with the turnover of
200 crore.
Based in Bangalore, SPEC Transformers commenced
operations in 1975 with the manufacture of distribution
transformers up to 500 KVA. With the passage of time and
increasing market demands, we diversified into larger
transformers gradually expanding to our range from 25KVA
/11kV distribution transformers up to 31.5 MVA/132 kV power
transformers now.
It has always been our culture to produce quality products and
to this end we have sourced transformers for repair in order to
study the causes for failure and correct them. To our surprise,
our study of failed transformers revealed many simple causes
even from household names of large producers. We successfully
eliminated these flaws while designing our own transformers.
How does SPEC plan to gear up to meet growing demand for
transformers given that India is likely to spend 6.5 trillion in
the power T&D sector in the XII Plan period?
In the transformer sector, capacity addition has already taken
place among all medium and large scale manufacturers. SPEC
Transformers is located in a sprawling factory campus and is
fully geared to double its manufacturing capacity with addition
of balancing equipment. Further we have a greenfield
expansion plan for manufacture of higher rating transformers
up to 220kV/400kV for which land acquisition has been
completed. The project study is in advanced stage and we
should be in line with the project in the next two years.
We understand that India has a plethora of distribution
transformers makers in the unorganized sector that are
allegedly responsible for substandard equipment getting into
country's power grid. What is your view?
On the phenomenon of substandard distribution transformers
from the unorganized sector this is largely true on account of the
unsustainable and "non-business like" attitude of state
electricity boards and discoms across the country.
Quality norms are not being enforced due to poor ability and
lack of will in enforcement of regulatory measures. Further the
insistence on awarding contracts to the lowest bidder inherently
is a breeding ground for inefficiency and poor ability. Since there
is no vendor development program or even a statistical base to
monitor and reward performers, the only way of finalizing orders
is to place them on the lowest-priced bidder! This results in
substandard transformers getting into the system.
Unless electricity itself is rightly priced and the quality of
electricity delivered is adequately monitored there can be
no escape from the current system of allowing state
electricity boards to wield complete monopoly over purchase
of transformers.
We hear that India is facing difficulties with respect to
availability of prime grade electrical steel (CRGO/CRNGO
steel). What is the ground reality?
Well, SPEC Transformers has never faced this problem! Prime
grade electrical steel is always available but at a price. The
issue before everyone is whether the price is sustainable based
on product offering. The myth of non-availability is further
perpetuated by manufacturers who cite this is a cause for their
inability to supply quality transformers.
What is your view on Bureau of Energy Efficiency making
it mandatory for distribution transformers to carry a
"star" rating?
This move is fully endorsed by SPEC Transformers as this is the only
way to ensure quality in a market starved of it. The issue before all
stakeholders however is how to enforce and regulate the purchase
of star-rated transformers in a way that will make the all utilities
and manufacturers comply with the regulations. Strict penalties
for defaulters which have been proposed should be enforced
thereby weeding out unscrupulous manufacturers and traders.
All utilities and users should also be regulated while
issuing tenders for transformers to ensure that only
star-rated transformers are procured and no exceptions should
be tolerated.
Does SPEC cater to the exports market? Which countries hold
high potential for SPEC transformers?
As of now, our exports are minuscule. However, markets in the
Middle East and East Africa hold high potential for exports of
transformers. SPEC transformers have been airlifted to Liberia
for iron ore projects.
What is your view on the emerging demand for dry type
transformers in India, given the growth in urban infrastructure
like metro rail, airports, commercial complexes, etc?
There is a very important role for dry type transformers given
the fact that they can be used in enclosed spaces typically found
in metro rail projects, airports and complexes. However this is
a niche market heavily dependent upon consultants and specific
projects. This market will take time to grow. For us, this could be
a product typically meant for augmenting the existing product
lines to broad base our manufacturing line.
Tell us about SPEC's testing facilities and also share your views
on the perception that India has inadequate testing facilities
when it comes to high-voltage equipment like high-rating power
transformers.
At SPEC we have a full-fledged in-house testing facility to test
every facet of a power transformer for all routine tests
prescribed under the specification. Insulation resistance
dielectric strength, high current and high voltage withstand at
both power frequency and elevated frequencies and frequency
response analysis of power transformers. We also conduct
temperature rise test to verify the cooling and thermal efficiency
of the transformers. Wherever required we get our transformers
tested at CPRI centers across India for specific short-circuit and
high voltage impulse tests across our product range.
CPRI and ERDA in India have adequate testing facilities
to cater to the growing demand for testing of high capacity
power transformers.
Do Indian transformer makers face competition from imported
transformers? What is your opinion about competition from
China in particular?
Apart from the recent UMPP projects, imported transformers
have still not made their presence felt to the extent that local
manufacturers are discomforted. The threat from China is ever
present given the huge capacity installed and their ability to
subsidize transformer exports by virtue of artificially low yuan
exchange rate. Given the recent depreciation of the rupee to the
dollar this has made our transformers expensive on account of
the high prices Indian manufacturers pay for CRGO, copper, oil
and steel. This renders Chinese products competitive in price.
Please discuss some corporate milestones that you would like
to see SPEC Transformers attaining in the medium term, say 5-7
years from now.
Given that India will add 80,000 mw of power in the next five
years we expect to rapidly ramp up and expand our turnover up
to three times in the next five years. Further, given that SPEC
Transformers enjoys the solid reputation for quality and
reliability in the market and with the management's vision of
uncompromising adherence to quality norms, we expect that we
shall be on target to meet these goals.