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We want to carve a niche in high-precision products

EM NEWS BUREAU ,  Wednesday, April 27, 2011, 17:00 Hrs  [IST]

Chirag Patel.jpgChirag Patel, Executive Director, Billets Electro Werke Ltd

Billets Electro Werke Ltd is a pioneer of cable lugs and crimping technology in India, manufacturing and marketing its products under the "3D" brand in both the domestic and international markets. Chirag Patel speaks to Electrical Monitor on how his company, having risen from a humble beginning, is now looking confidently at the future. Patel also observes that the power T&D industry could do better if it realizes the importance quality lugs and scientific crimping techniques.

Tell us more about your company's evolution and growth.
The company was started by my grandfather, G.S. Patel, in Nagpur. Our initial activity was production of cycle rickshaws. We then moved on to make switchgear products like fuses, etc. This is how we got into electricals industry. From Nagpur, we shifted base to Goregaon (a suburb in north Mumbai) where we produced cable lugs. At that time, the concept of crimping and cable lugs was very new. Right now what we do is "cold crimping" which was revolutionary compared with the then prevailing practice of soldering.

A turning point was a major electrical breakdown at an Indian Railway site due to faulty soldering of lugs. Through some contacts, my grandfather was approached. He got the work done through cold crimping using technology from Germany, a country whose technology he had great affinity for. After Railways, we got talking to state power utility boards. Even today, the ISI standards for cable lugs used in power utilities are designed by my grandfather; it is a mix between DIN standards and some cost-effective (economical) standards suitable to India.

We started off with the "Dowells" brand which was a pioneering brand. It was synonymous with cable lugs at that time.

Untitled - 60.jpgHow did the "3D" brand evolve?
In the year 2000, the group decided to split. We wanted to focus on exports more than the domestic market. This is because the domestic market was getting more price-conscious than quality-conscious. Our partners were not open to new developments in cable lugs, whereas we believed in engineering and innovation. We see ourselves as an engineering company more than a manufacturing company. The company today is run by technocrats and always believes in continual technological upgrade. We don't spare any investment in inducting new machinery. The "3D" brand was born mainly for the exports market. We then shifted our production activity from Mumbai to Umbergaon in Gujarat where copper supplies are more assured.

How has the 3D brand grown over the past 10 years?
When the group split, the entire domestic market was given to Dowells, and we had to almost start from scratch. When we started off, our sales turnover was in the region of Rs.jpg10-15 crore that has now grown to Rs.jpg50 crore. We could have grown further were it not for the global meltdown of 2008. Today, exports accounts for 80 per cent of our sales.

Which countries do you mainly cater to?
Australia is our biggest customer, accounting for 50 per cent of our exports. We also cater to Hong Kong, Malaysia, South Africa, etc.

Untitled - 61.jpgWhat about the Middle East?
 The Middle East is a price-conscious market that is difficult for a quality-conscious company like ours to venture into. We make our lugs from copper cathodes (pure copper) whereas the Middle East countries do not mind buying lugs made from recycled copper scrap. All the same we make lugs for some German suppliers (under their brand name) which sometimes find their way to the Middle East markets.

How has the awareness of cable lugs and cold crimping technology grown in India over the past decade?
Unfortunately in India, a cable lug is still considered by power utilities as a "Group C" item. Although a cable lug is a "Group C" item due to its (relative) value, the sad part is that utilities consider this product as "Group C", even in terms of its strategic importance. The message that we are always trying to convey is whether a company would want to sacrifice an electrical system just for the sake of saving on a good quality cable lug!

What is the criticality of a good cable lug in an electrical system?
It is not only about a good quality cable lug, it is also about how the crimping is done. Even if one has a good crimping technique, it has to be executed to perfection. There are instances of good cable lugs melting on a transformer during overloading, just because the crimping was not done scientifically. We very recently called by a private power distribution utility to whom we had supplied lugs. When we inspected the cause of the system breakdown, we found that a cable lug, as big as 400 sq mm, was crimped with a hammer!

Untitled - 62.jpgDo you try educating your clients on crimping techniques?
Yes, we do educate our customer on the importance and the method of proper crimping. We obviously train our sales force too. We also hold training seminars on crimping techniques for our corporate clients.

Does this inspire you to start offering crimping services?
We did think on these lines, but could not make much headway. There is very limited interest (amongst contractors) to go in for such a service. Perhaps, a multinational company would be interested. But they would subcontract work to an electrical contractor who is simply not keen. They want to get over with their work in the shortest possible time. Cable lugs are still considered as "nuts and bolts"!

So you mean, there is no awareness or no acceptance?
There are two things—acceptance and implementation. I would say that acceptance is 10 out of 10, but implementation is poor! At the site, nobody wants to put an inspection engineer to see what type of cable lugs have been used, and how they have been crimped.

Untitled - 64.jpgCan you give us some basic technical insight on cable lugs and crimping?
The basic idea is that a cable and a lug should form a homogenous joint. A good crimping technique ensures this. There should be no air gaps between the lug and the cable, so that no sparking occurs. One must understand that in an electrical system there are a lot of heat cycles, which the cable lug should be able to withstand. Hence, we need a good quality cable lug that does not heat up and burn, and which is also securely crimped to the cable.

Can you discuss the recent investments made into your Gujarat manufacturing plant?
Despite the global recession of 2008, we spent around Rs.jpg10 crore in setting up a new plant at Umbergaon in Gujarat. Our three plants were earlier located separately. These have been now been housed into a single location. Another significant step has been backward integration. For our cable lugs, we need copper tubes and strips, which are made from copper cathodes. We found that our suppliers were not giving us the right quality. We therefore decided to do the conversion in-house. Copper cathode is now our only raw material; we make our own tubes and strips. We also started making bimetallic lugs, using aluminium and copper. It needs a special technology as dissimilar metals cannot be welded. The production of such lugs uses frictionwelding technique, which is done through an imported German machine. This product is for jointing kit manufacturers.

Untitled - 65.jpgGiven that subjects like lugs and crimping do not get the desired attention, is there any kind government support are you looking at?
Cable jointing kits, for example, have good quality cable lugs used in them. Nobody complains because the use of cable jointing kits has been specified in the drawing. However, when it comes to lugs, matters are different. One must note that ISI has no standards for copper lugs. Such standards exist only for aluminium lugs. If the government involves itself and sets standards-like the DIN standard in Germany-for copper lugs, matters would improve.

Untitled - 66.jpgHow do you then deal with competition from sub-standard lugs?
There is too much competition in the domestic market, which is why the export market is always going to be our priority in the long term. In the domestic market, we do not want to devalue our product, just by reducing prices. We tell our customers that we are selling a full crimping system—a cable lug, a crimping tool and training on how to crimp properly.

What are your future plans in the field of lugs and crimping systems?
The investment that we have recently made is more towards newer types of lugs and crimping systems. What we are now seeing is a revolution in electric cars. The cable termination system for such cars is very different and even complicated. We are preparing for this market. The friction-welding machine that I mentioned earlier will also find application here.

With the development of the power sector in India, we are expecting to see more sophisticated cable termination techniques. There is already a technique evolving in German where crimping is done by a screw present in the cable lug barrel. Perhaps India is a nascent market for this technique at the moment, but things might change in future.

Untitled - 65.jpgWhat are your medium term corporate goals?
We have today crossed a sales turnover of Rs.jpg50 crore and in the next two years, we would want to cross Rs.jpg100 crore. Secondly, since we have already gone in for backward integration and make our own raw material-copper tubes and strips-we want to enter the copper semis market. For instance, we could make continuously cast (CC) copper rods that go into the making of copper wire. However, as I said earlier, in the long run our vision would be to market ourselves and be known as an engineering company and carve a niche in highprecision products.
 
                 
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