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Our customers will get Japanese quality at Indian price

Venugopal Pillai ,  Thursday, July 26, 2012, 17:01 Hrs  [IST]

Yoshiaki Inayama— Yoshiaki Inayama, Managing Director, Toshiba JSW Turbine & Generator Pvt Ltd

Toshiba JSW Turbine & Generator Pvt Ltd represents the coming together of the Toshiba Group of Japan and the Indian steel major JSW Group. The joint venture recently opened its new manufacturing facility for manufacture of high efficiency steam turbines and generators for power plants. In an exclusive interaction, Yoshiaki Inayama, discusses the supercritical power equipment market in India, and also how the new JV promises to bring to India Toshiba's technical expertise and reliability. An interview by Venugopal Pillai.

Given that India is most likely to continue its reliance on coalfired power plants, how do you see the market for supercritical power equipment in India?
More than 80 per cent of the power plants planned in the XII five-year plan are thermal, and among them 60 per cent are supercritical thermal power plants. Moreover, almost all the power plants in the XIII five year plan will be planned based on supercritical technology. In order to keep the momentum of rapid economic and industrial growth of India, continuous capacity addition in power sector is imminent. The government has realized the same and has aggressive capacity addition plans in the tune of 15,000 mw per year for the next decade or so. Toshiba Group, with its strong local presence, sees a very good business avenue in India.

Tell us about the total investment made so far by the two partners (Toshiba and JSW) in the joint venture. What would be the fund infusion in the coming years?
The total amount of investment is about Rs.800 crore so far by both the partners in the JV. We have planned to increase the manufacturing capacity from 3,000 mw to 6000 mw in FY15.

What would be the general lead time for a 800-mw TG set, and when is the first TG set likely to be shipped from the new Chennai plant?
The manufacturing lead time ex-works basis for a 800-mw turbine is around 18-22 months. We have already started the manufacturing and supplying of major TG components to the export market. Manufacturing of supercritical turbine involves precision machining of heavy components, developing and training such skill sets and most importantly developing a reliable and sustainable vendor base in India. We are steadily and systematically approaching the above steps and we expect to deliver the complete turbine shipped from the Chennai Plant by end of 2013.

The Indian manufacturing sector is widely believed to be facing problems in creating an efficient supply chain. What is your view and how does Toshiba-JSW plan to address this issue?
For the survival and competitiveness we should source as much as possible from the local industry, and complete technology transfer from Toshiba. For more than two years now, Toshiba's specialists from Japan are visiting the local manufacturers and helping them to develop the products and to put systems in place to match the quality standards of Toshiba, Japan. I am sure we will succeed in our goal of creating a reliable supply chain in India.

What was the rationale behind selecting Tamil Nadu as the site? Tell us about the strategic advantages and also about the local employment opportunities that the modern plant would create.
The Tamil Nadu Government was very forthcoming (in terms of land allocation and providing all necessary clearances (lease of state government land, infrastructure building, tax disposal)) when Toshiba JSW showed its intention to manufacture power plant equipment in India. Chennai being a major port destination in South Asia, the location has strategic advantages to cater to the export markets. Hence it helps to transport these heavy equipments via sea route. Since Chennai in the fourth biggest city in India, it is excellent also in request of staff adoption. Toshiba JSW is expected to have a direct employment of about 500 people by 2014.

Toshiba chennaiWhat is your view on the domestic availability of key material like special steel that would go into the making of supercritical turbine-generators? Would you also be importing certain varieties of steel?
To the extent of possible, we are sourcing raw materials from India. There are certain heavy forgings and castings required for manufacturing of supercritical turbines and generators. Toshiba JSW is working closely with the manufacturers of these products in developing them as a reliable vendor base in India.

Going forward, do you see the Chennai plant exporting to other developing economies?
Yes, the Chennai plant will also cater to the export market in the future.

India is considering imposing an import duty of 19 per cent on power plant equipment with a view of curbing imports from China. What is your reaction?
It will definitely be a welcome move, as it creates a level playing field and protects the interest of the domestic manufacturers who have made serious investments in the country.

What is your overall view on the penetration of Chinese equipment (BTG sets) in the Indian power sector?
In the supercritical equipment market, Chinese equipments have market share among the customers, who are looking for low-cost machines. Most of the plants are not yet operational and the performance of these low-cost machines will be known only after a few years of operation. On the other hand, Japanese and European equipments have hundreds of successfully running supercritical plants across the world. Please note that the supercritical plants being put in India are for serving the base load requirement, that means the reliability and availability of the equipment is very important.

With more domestic players in the market today and price levels becoming competitive we expect to see a change in the buying pattern of Indian power project developers.

Please elaborate on the recent orders for supercritical power equipment received by Toshiba Group in India. (eg Meja, Kadgi, etc). How does the order pipeline look?
Yes, Toshiba JSW secured the orders for Meja 2x660-mw TG island package and Kudgi 3x800-mw TG island package as part of the bulk tendering by NTPC. There was stiff competition among the domestic manufacturers and this order booking shows Toshiba JSW competitiveness in the market. We received the above orders because of the performance guarantee excellence when compared to our competitors.

A large number of domestic companies are entering the power plant equipment market through joint ventures. What is your take on the impending competition?
Fair competition is good for the industry and brings out the best for the customer. The Indian power market has potential for all the players in the market provided some of the regulatory bottlenecks, availability of coal and projects come up as planned in the next two five year plans.

Please discuss how Toshiba Group through this joint venture and other entities aims to become a complete solutions provider to India's power generation sector.
Toshiba Group has established a network of companies that provides localized one-stop EPC solutions, from plant conceptualization to commissioning. Toshiba India Private Limited in Gurgaon undertakes overall project management and plant engineering; TPSC India in Hyderabad carries out installation and commissioning; and Toshiba JSW, the jewel in the crown, manufactures steam turbines and generators.

What are the key milestones that you would like to see the Toshiba-JSW joint venture achieving in its first five years?
Toshiba equipment is known for its technical expertise and reliability. We are looking for seamless technology transfer from Toshiba Japan over a period of time and attain 100 per cent indigenization with the same quality standards as that of Toshiba Japan. So what customers will get is Japanese quality at Indian price!
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