A Sterling Enterprise in DG Sets
Sterling Generators eyes to become a dominant player in the global HHP genset market by 2020.
HHP genset market
‘Sri Lanka today is one of the fastest growing markets’
He flew in from Colombo by an early morning flight and drove straight to Silvassa to join the media team. Betraying no signs of fatigue, Sanjay Jadhav, CEO – Powergen Business, Sterling and Wilson, fielded a barrage of questions with characteristic élan. Excerpts...
What about this business that took you to Colombo?
Well, we have just secured a 50 MW order for gensets from the Ceylon Electricity Board (CEB) worth Rs 120 crore in response to a global tender that had 19 bidders.
How challenging was the task of bagging this order?
Sri Lanka today is one of the fastest growing markets and fairly Chinese dominated, so it was tough. We have had some small orders from the country before but this is our biggest so far. As far as people-to-people contacts go, they prefer Indian companies but unfortunately not many Indian companies are engaged presently with the exception of Bajaj, Ashok Leyland and Tata Motors in automotive, and IOC in petroleum products. We had bid successfully on the price front, but they were still apprehensive about our ability to deliver on the whole package – quality, service, etc., but a visit to this plant by CEB officials put all those doubts to rest. It is a big market with lot of potential in sectors like ports and tourism infrastructure.
How large is the Indian market for DG sets?
The Indian market is roughly Rs 8000 crore, divided between the low, medium and high horsepower segments, and we are present only in the medium and high HP, with core strength in HHP, which is around half the market, of which we have close to 20% share.
With growing electrification of India is this a threat for further expansion?
One has to understand that DG sets are not basically a prime power source but a back-up in case of mains failure for whatever reason. However, as the power availability increases, the generator running time may reduce and to that extent there could be an impact on the service business, spares, etc., to some extent. But businesses – especially critical establishments – will continue to need standby power sources. Having said that, the LHP segment could be affected as SMEs may avoid buying DG sets when power availability improves.
What are the company’s export markets? How large is the share vis-à-vis domestic sales?
We are strong in the Gulf markets of Abu Dhabi, Dubai and Qatar, and are now preparing to go to Oman, Kuwait and Saudi Arabia which are promising markets. In Africa, we have Egypt, Kenya, Nigeria, South Africa and other countries. In Asia it is Sri Lanka, The Philippines and Indonesia and the there is Australia. At the moment the ratio is 70:30 between domestic sales and exports, but the strategy would be to grow in the export markets.
What are the challenges in the business presently?
One of the challenges could be the new regulations against diesel pollution. At present we are compliant with the existing CPCB norms and are prepared for the future, as and when new norms are adopted, to work with our suppliers to upgrade the engines. Gas engines are less polluting but availability of gas is a problem. Moreover gas engines are not meant as back power but prime power.
Another challenge, especially in the international market, is the perception of quality and the aesthetics of the product. Here we follow the principle of ‘seeing is believing’, and invite the prospective customers to our plant and let them decide after looking at all our facilities and capabilities, like it happened with the Sri Lankan order. In course of time this also helps spread the message by word of mouth in the given market, through customers and consultants.
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