—B. Sohanlal Betala, Director, LE Transformers India Ltd

LE Transformers India Ltd, formerly known as Lakshmi Enterprises, is a South India-centric company engaged in transformer design, development, production and servicing. In this exclusive exchange, B. Sohanlal Betala talks about the company’s growth over the past 17 years of inception and shares his plans for the future. Betala acknowledges that China is contending for space in the India transformer market but asserts that the Indian transformer industry, by virtue of its long standing and maturity, can easily withstand the competition. An interview by Venugopal Pillai.

Tell us about the various types of transformers made by LE Transformers India. Given the large investment outlay in the power sector, do you have capacity expansion plans?
We manufacture power and distribution transformers from 25 KVA to 1,250KVA up to the 22kV class. We also manufacture star-rating transformers. Our present capacity is 50 MVA and we are planning to double this in the coming years.

TNEB has been your big customer. Do you see improvement in the procurement policies after the recent unbundling of the utility?
Yes, TNEB has been our major buyer since our company’s inception in 1995. After the bifurcation of TNEB into Tangedco (generation and distribution) and Tantranco (transmission), a lot of reforms have taken place. The major one has been the revision in power tariffs in April 2011, which was done after a span of nine years. The other major reform was the policy to purchase star-rated transformers and also giving more importance to projects under R-APDRP. As an important change, I would like to mention that the utility has improved significant in terms of making payment to suppliers.

What are your plans for catering to states outside your home state Tamil Nadu?
Before the revision in power tariffs, TNEB used to buy transformers worth Rs.200 crore per year. Now with the active implementation of R-APDRP projects, the value of procurement of distribution transformers has multiplied manifold. We therefore see no necessity to supply transformers to other states, at least as of now.

What is your view on the mandatory BEE certification (star rating) for distribution transformers? Can this potentially improve the overall energy efficiency of transformers used in the country?
Definitely! After the mandatory BEE certification for distribution transformers up to 200 KVA, overall distribution losses have reduced. This will benefit state electricity utilities. We hope that the BEE star labeling is made mandatory for higher capacity transformers as well.

What is your view on the recent Steel Quality Control order that mandates BIS-certification for CRGO to be used in India, effective March 2013?
The demand for secondhand (oily grade) CRGO has reduced after the mandatory star-labeling programme. After the BIS standard comes into force in March 2013, there could be a complete stop of the use of second grade CRGO in the transformer industry. However, we need to have a governing body for every product used by the transformer industry; monitoring and implementation should also be strict.

With India’s transformer base expected to grow substantially, how do you see the prospects of transformer maintenance and repairs as a standalone activity?
Most transformer manufacturers undertake repairs of transformers and acquire know-how before getting into actual manufacturing. We also started out with transformer repairs. Currently, the business of transformer repairing transformers from TNEB alone is around Rs.50-60 crore per year. We expect other SEBs to have similar business volumes. Hence, we see transformer repairs to have a good market.

China has entered India’s power transformer market. Do you see it taking interest in distribution transformers as well?
Why should we worry about China’s entry in the transformer industry? Everyone knows the quality of Chinese products. Since transformers form the base of the power value chain, I don’t think people will compromise on quality. The transformer industry is very big and there is scope for everyone. India’s manufacturing base is very strong, and we have no reason to worry.

Indian distribution transformers are known to have a high failure rate. What could be the main reasons and possible solutions?
After strict enforcement of BEE star-rating transformers, the failure rate of transformers is bound to reduce drastically. Further, state electricity boards should give maintenance contracts to private parties for better servicing. SEBs should also ensure that transformers are never overloaded. This precautionary measure can bring down failure rate even further.

Please discuss in brief your key future plans for LET India.
Because we have been dealing since long with the public sector, we have acquired experience and have developed contacts. We are now exploring business opportunities with more government departments and agencies to further our services in the welfare of society at large.

Do you have any plans for diversification?
Yes. Recently, the Tamil Nadu government has started offering subsidies and other benefits to ensure that solar power accounts for 3 per cent of the total electricity generated. In such a situation, we see solar power as a big industry in Tamil Nadu. We are planning to enter the field of solar power generation in the coming years. Another area where we see a huge market is manufacturing of transformer radiators. We are planning to put up a plant for this in Chennai in the coming years.

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