— Akshay Pitti,
Vice Chairman & Managing Director, Pitti Laminations Ltd
Hyderabad-based
Pitti Laminations (Pittilam) is a leading provider
of electrical laminations for various types of motors and has been
serving the industry for over 25 years.
Akshay Pitti, in this
interaction with
Venugopal Pillai, explains the role of a well-crafted
lamination in the efficient working of motors. Pitti observes that
though the market is filled with lamination manufacturers in the
unorganized sector, these marginal players are looking to exit the
business. A major consolidation is on the cards, Pitti feels.
To start with, please tell us what a lamination is and the role it
plays in the working of a rotating machine.
A motor is a device which converts electrical energy into
mechanical energy. This is achieved through interaction of
magnetic fields and current carrying conductors. The
magnetic field is generated in the core of motor, when
current passes through the coiled conductors wound in the
core. A core, in turn, is a stack or bunch of laminations that
is the main and important part of a motor, without which a
motor can not run.
What defines a good quality lamination and how does a goodquality
lamination help rotating machines become more
efficient?
The quality of laminations is directly linked to the energy
efficiency of the motor. Poor quality laminations will cause the
motor to generate excessive heat which may lead to the motor
burning out.
Which industry segments do you cater to and which of them
would you regard as key demand drivers in future?
PLL supplies the laminations used in industrial motors, traction
motors (railway), servo drives and controls, earth moving &
mining equipment, alternators, wind mills, nuclear, thermal
and hydro generators as well as special purpose motors for
various core sectors. We feel that traction motors and motors
used in the mining & energy sector will be the key demand
drivers in future.
In particular, do you see growing demand for laminations for
wind turbine generators?
Yes, there is a consistent growth in the wind mill business that
we are catering to in the last few years.
What is the current status of your capacity expansion plan at
your Hyderabad facilities?
We completed our last expansion of the Hyderabad facility in
March 2012. This has taken the overall capacity to 30,000 tpa
laminations, 2,000 core-dropped machined stator frames and
3,000 machined components. We have the best quality testing
equipment in the lamination industry and one of the best-inclass
machine shop.
Vertically integrating these two businesses gives us a unique
ability to provide a true one-stop solution to our customers and
reduces the time-to-market of our customer products.
What is the current demand-supply scenario in India with
respect to motor laminations?
We have too many players in this sector but not all of them are
able to meet the stiff quality requirements of major OEMs. So I
feel there will be consolidation that will take place sooner than
later. We are already seeing some of the fringe players
exploring options to exit the industry.
Unorganized players in the lamination industry mostly
produce low quality laminations used in non-critical
applications like fans, small switchgear, etc or provide
laminations to the repair and refurbishment markets or smaller
non-branded manufacturers of motors and transformers.
We hear that transformer lamination manufacturers often face
the problem of scrap inferior electrical steel (CRGO and CRNO).
What is the scene with respect to motor laminations?
This does not apply to motor industry. Moreover this is
irrelevant to the type of sectors which we are catering to since
we buy only prime CRNO coils in high-efficiency grades directly
from the most reputed mills in the world.
What is your view on the Steel Quality Control Order of June 2011
that mandates the use of only BIS-certified electrical steel?
Most of lamination manufacturers in India are importing the
electrical grade steel. If the mandate comes into force, all the
imports of electrical steel will stop since most major foreign raw
material manufacturers are not yet certified by BIS.
At present we have only two manufacturers of CRNGO Steel
in India, SAIL ad TKES (Thyssen Krupp). TKES only does the cold
rolling and coating operation in India on imported hot rolled
coils making them noncompetitive when compared to Asian
mills like CSC, POSCO, etc. Even put together, they cannot meet
the requirement of the industry apart from the fact that lot of
big power projects and exports of special purpose motor
laminations are dependent on high efficiency electrical steel
which is mainly imported as there is an acute shortage of
capacity for producing these grades of steel.
Therefore this order will have a significant impact on the
output till enough international mills are approved or additional
capacity is created in India.
For several decades, India has been unable to create
domestic manufacturing capacity for electrical steel. What
is your view?
It is a cause of great concern we are net importers of
electrical steel and electrical steel is the basic raw material
required to produce all kinds of rotating machines be it a
generator for large power projects or a small motor to
power the compressors of an air-conditioning unit.
Electrical steel being a major cost driver of these products
the competitiveness of our countries in these products is
being eroded by high steel costs apart from making us
vulnerable to changing policy regimes of steel-exporting
countries.
Tell us about the export performance of Pitti Laminations.
Which countries would you regard as major export
destinations?
Our export performance over the years has been pretty
impressive given the exacting standards of international
markets on quality, price and timely supplies. Major
destinations are US, Canada and Mexico. Serious efforts are on
to make forays into the European markets as well and we
expect to see some traction soon.
Please summarize your vision for Pitti Laminations and discuss
some key corporate goals that you would like to see the
company attaining in the coming years?
I am aiming Pittilam to be the first port-of-call for all major
OEMs of industrial motors, traction motors, alternators for
earth moving & mining equipment, wind mills, nuclear, thermal,
hydro generators et al, for all their requirements of motor
components, sub-assemblies, machined castings etc. and
continue to be their preferred partner.
Pittilam, with several initiatives of vertical integration to
manufacture value-added products in place, will truly be the
provider of “one stop solutions” to all our customers
significantly reducing their “time to market” while providing
measurable cost advantages. Our aim is to build sustainable
and symbiotic relationships with all our key customers.
Plans are in place to grow Pittilam into a Rs.1,000-crore
corporate entity with decent EBITDA margins in the next four
financial years from the current top line of Rs.400+ crore.