Pipe manufacturer PCC has a positive outlook for the Indian market and thinks it's poised towards100 per cent growth in coming years. In an interaction, D Bruce Davis, Sales Director, PCC Energy Group, discussed the need for reforms and incentives to revive demand in the power sector
According to you, how are the sentiments in India and overseas for the power sector?
I think it is going to be weak for probably another 12 to 18 months here in India. However, India has the greatest potential but outside India, it depends on various factors. China is very strong and the US is flat right now. The market in the Eastern part of Europe is starting to grow. Russia and Europe have good potential for repair and maintenance. Africa has some good opportunities, but overall the spotlight is still on China and South East Asia.
What about the Middle East?
Most of the work in the Middle East is gas and oil related, but the units will not be as large as they would be in China or India. This market I would say will probably range from average to good over the next five years.
Coming to your own products, what is the speciality of these particular products you are serving?
We supply customized pipes that connect the boiler and the turbines and also pipes inside the boiler itself. They are custom made and very expensive as they are unique to the market and there are only a limited number of manufacturers who can produce them.
Do you have your manufacturing units here in India also?
No, our manufacturing units are in US, UK and China. However, we have sales project management offices here in Mumbai, Chennai, Bangalore and Trichy.
How was the order booking this year?
Order booking this year compared to last year is running slightly ahead. I would say percentage wise we are probably 20 per cent ahead of last year at this point. However, order inflow from the power sector was almost nil this year.
Do you have any plans for setting up a manufacturing unit in India?
We have considered this and one of the driving forces in our decision is receiving credits for indigenous manufacture, however presently we do not see that.
You have a manufacturing unit in China so is your sourcing is done from China for the Asian market or do you import from your other facilities in US and UK?
Resourcing is from the US and UK for global markets and China is specific to the market. Not every market would accept products manufactured in China. Some come with conditions, some say no and some say yes.
Who are your big clients in India?
We do business with BHEL, L&T, Hitachi, Thermax, Essar, Cairn Energy and BGR. We have been successful in securing contracts from all these power suppliers within the Indian market.
You had expressed that after 12 to 18 months things may turnaround, after that what kind of growth you expect for the industry?
I would expect to see 100 per cent growth. The market would show healthy growth if all of the elements are in place. The demand in India is rolling and India is starved for power and if it has to achieve what China,US, Africa and Europe have, it will need to add 80,000 to 100,000 megawatts every five years. This will help the country return to the growth levels of what it had in 2005 and 2006, which will be at least double of where we are today.
It has been observed that everybody here in India is waiting for the reforms to be implemented in a proper way and only the can they go ahead with further investment plans in India. Do you have the same feeling?
My viewpoint would be that I would encourage the Indian Government to be self sufficient and not rely on other countries. I mean there is flood of Chinese products coming into India, especially into the power sector and I would encourage the Indian Government to restrict those with duty and promote indigenous supply. Post that, we would set up facilities in India if we were getting incentives to do so through incentive programs like other countries who provide incentives to those who set up a manufacturing plant there.
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