With the Indian coal sector sensing a fillip after the recent coal auctions, it is now time for its allied industries to gear up for some action. One of the prime movers-coal and ash handling systems-are likely to gain from the current happenings.
Coal and ash handling systems form a part of the core demand for India´s growth as they have been very much an inherent part of the energy sector. All said and done, with the sort of coal reserves that the country has, it would be next to impossible to ignore it as a fuel for thermal power plants for the growth of the country. And now, with the recent coal auction which witnessed aggressive bidding from private coal miners to secure coal blocks, the experts within this space anticipate substantial growth in handling the huge amount of coal and subsequently the ash which results out of burning the coal which gets generated in the process.
But some may ask as to how important is the existence of ash/coal handling systems in any thermal power plant? And how it arrests the quality issue for any power project? The answer is coal and ash handling systems play an important role in keeping the plant pollution level under check. It ensures that nature and growth can coexist together.
That said, it seems the coal auction and a five-year plan of Coal India may run in favour of these coal and ash handling systems players. Consider this: the Coal Ministry has already worked out a five-year clear-cut plan for ramping up the production from the current 500 million tonnes to one billion tonnes a year by 2020. In fact, Coal India has already readied its comprehensive mine-wise plans and it will be placed before the CIL boards at its forthcoming meeting. CIL has already identified key projects to reach the desired target. The identified projects would be brought under a development plan and will be kept under close monitoring of the Coal Ministry.
In the meantime, for coal evacuation, the Coal Ministry had already written a letter to the Chairman, Railway Board, where the Ministry has identified 51 rail infrastructure projects where it is ready to put in money as part of a joint venture or by forming a special purpose vehicle. Interestingly, some of the States have already shown their interest in supporting these 51 projects because all the States which have coal mines, consider evacuation as a major aspect which is holding back the sector. The Ministry is in intensive discussion with the Railway Ministry and other stakeholders to see how these lines can be in operation. These lines will not only serve Coal India´s evacuation but also help private miners. So there will be lot of value that will add as consequences of these railway lines. According to industry players, this rail infrastructure too will drive demand for coal and ash handling equipment because it requires certain types of conveyors to transport coal from mines to railway wagons. ´We do feel that these could become profit centres on their own as also to help CIL and other entities to evacuate the coal,´ says Anil Swarup, Secretary, Ministry of Coal.
In addition, with the conclusion of the recent coal auctions, the 101 coal blocks will produce 350 million tonnes (mt) and with the overall 204 blocks in the market, it will result in the production of 500 mt.
According to Deenar Apte, Technical Director, Deccan Mech & Chem Ind Pvt Ltd, the releasing of coal blocks is going to boost the stagnated market of power production and thus the coal and ash handling sector. He adds: ´Some defined policy about power purchase agreement is required for private power producers to take forward their stalled projects, (and this) can give a boost to the power sector.´
Deccan Mech & Chem is a Pune-based company and provides services for ash handling, bulk material handling, and wear and abrasion resistant systems. Meanwhile, Ashok Kumar Sinha, Partner, Indus Group India is very optimistic about the future rise in demand for coal and ash handling systems in India. He feels that the government has taken the right steps as far as coal block auctions are concerned and suggests that the demand would be more from government-based projects than private.
That said, with the kind of opportunities that lie ahead, coal and ash handling equipment is expected witness a demand of about 25 to 30 per cent on a year-on-year basis. However, apart from just evacuation from coal mining, there seems to be a great demand from operators of thermal power plants which require quality coal. Although Indian coal is available in abundant quantity, quality is a major concern.
The ash content is normally more than 40 per cent at best. This leads to firing more coal to produce same power which produces more ash. Hence, many plants are now resorting to blending of imported coal with Indian coal to improve performance. Many plants along the coastal regions use only imported coal. A possible option can be having coal washery plants near the mines and transport washed coal so that plants can have better coal.
Will the unrolling of GST make any difference?
According to players in the industry that POWER TODAY spoke to, the unrolling of the Goods & Services Tax (GST) would be a game changer for the economy. It would do away with various types of taxes and duties levied by various States which also sometimes creates a disparity in terms of landed cost with the place where you are located. It would definitely simplify the process and would be an enabler for ease of doing business.
´Make in India´ campaign
In ash and coal handling systems, the Indian industry is well developed in terms of technology which can handle low-grade quality coal with high ash content. Hence there would be not much impact in the ´Make in India´ campaign, as most of the inputs are anyway manufactured in India.
In ash handling it is more of a case of same wine in different bottles. Except the dry ash handling of bottom ash, there seems to be no new technological advancement. This also is now quite an old and established design, only that it is been limited to a few companies only. In India it´s only one company which holds complete monopoly. There is one more problem that all the established designers do not want to experiment and go by established practice. There is always one common question, ´where is it working in India?´ The consultants play a major role in continuing this trend.
In the recent past, the business environment had thrown up a lot of challenges in front of the players in coal and ash handling systems. The liquidity crisis coupled with delayed decisions had a cascading effect on new investments in thermal power projects. The uncertainty in coal linkage had also added a new dimension to the thermal power sector´s problem.
´In a country with potential like India, it would only be a matter of time when we can see growth happening around us in the same vigour like the past,´ says Ratul Chakravorty, Business Head, Mecgale Pneumatics Pvt Ltd, a Nagpur-based company.
He adds: ´We can already see renewed and new investment opportunities opening up with the de-bottlenecking of the coal blocks.´
Meanwhile for Deenar Apte, a drop in business which has led to extremely competitive pricing is making it difficult to continue in this line of business. ´Unless there are some alternate products to fall back (upon), it´s difficult for pure ash and coal handling system suppliers to survive,´ he adds.
´We anticipate big-ticket growth after the annual Budget´
Ratul Chakravorty, Business Head, Mecgale Pneumatics Pvt Ltd
What are the opportunities you see for your sector in 2015, especially after the Budget?
We anticipate big ticket growth after the annual Budget for fiscal 2015-16. The economy which was stagnant for a stimulus might get tax rebate on organisations and individual level. That should create surplus amount in the economy which once gets pumped back has got the potential to drive home a GDP growth rate of 6 to 7 per cent plus.
According to you, what will be the market share of ash/coal handling equipment in terms of contribution to manufacturing as well as in terms of units?
(The) share of coal and ash handling would constitute about 5 to 7 per cent of the thermal power plant cost. But in terms of GDP, I don´t think it would have a major contribution on a standalone basis. Meanwhile, our current order book position is close to Rs 112 crore with visibility over the short to medium term.
Tell us who are the major buyers for ash/coal handling systems?
The biggest buyers of coal and ash handling systems are undoubtedly government organisations like NTPC, BHEL, and various State Electricity Boards, etc.
What about technological advancement in this particular sector? Which are the new technologies that have been introduced over the years? Out of these, which are getting maximum exposure?
On the technical front, we have recently commissioned a 325 TPH Fly Ash Dense Phase Conveying System for a distance of 400 meters for Birla Cement which is one of the highest in terms of capacity. We have also recently commissioned a 65 TPH pneumatic single stage fly ash conveying system for a distance of 1.9 km for Reliance, which is one of the longest single stretch conveyors in the field of pneumatic handling.
We have indigenously developed a high capacity pneumatic conveying vessel with low specific power consumption. We have also indigenously designed and commissioned a de-sulphurisation system for reducing sulphur content in steel in partnership with Jamipol, which is an import substitution.
In coal handling we have commissioned various capacities of coal crushing and handling system with high moisture application with equipment like Flip Flop screen.
Tell us about your products...
Our product range covers the following:
Coal and Ash Handling: The products we make have varied applications like ash handling for power plants & process boilers, bag house/kiln/cooler dust conveying in steel & cement sectors, lime coating and desulphurisation system for steel making plants, conveying of raw meal/limestone in cement plants, carrying raw materials for refractory plants, etc. In a nutshell, pneumatic handling has got several applications spread across all sectors of the industry.
Coal handling systems are used for conveying & sizing ROM coal for solid fuel fired boiler applications. We have various products like belt conveyors, aero-belt conveyors, pipe conveyors and high-angle conveyors in our product spectrum. R.W.I.S. - Our equipments like Stop Log Gates, Sluice Gates, Trash Racks, and Travelling Water Screens are used in the pump-house water bay or in sea/river water intake facilities of nuclear/thermal power plants.
MHS - The material handling systems like chain conveyors have got wide applications for abrasive fine dust conveying; coal handling systems are used for conveying and sizing ROM coal for solid fuel fired boiler applications.
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