By Dominick Rodrigues
The electrical industry is undergoing a sea change amidst the global pandemic with the marine sector leading this growth in India, even as military incursions by neighboring countries like China witness the country ratcheting up its defence initiatives to meet the threat along its borders.
Defence spending is on the “cusp” of revival and with India transforming from a “buying” navy to a “building” navy, its “India Navy Indigenization Plan” (INIP) is targeting expansion of its existing 138-strong fleet through addition of 128 new ships in 10 years from orders for over 34 ships with Indian shipyards to address a market worth Rs 800 crores in the marine electrical sector.
India’s naval military is increasing its might through: Project 75I for acquiring 6 new submarines, 16 ASW Corvettes order placed with CSL and GRSE, 7 frigates of 17A-class to MDSL and GRSE till 2022, 1 Destroyer 15B and 4 survey vessels order to GRSE.
The increasing orderbook of shipyards highlight strong growth visibility in the marine segments and this strong pipeline of new ship-building order activity is likely to continue, according to Vinay Uchil, Chairman and Executive Director, Marine Electricals (India) limited — which is a dedicated defence player in the electricals market with Rs. 301.55 crore orderbook from the Marine Segment.
Estimating Indian defence spend – following the Chinese aggression – to increase by 15-20 % annually, he said that the country’s manufacturing related equipment at home would ensure lower cost than importing – thus giving a much larger growth in the quantum of equipment that could be ordered by the MOD\GOI. There is a requirement of 128 new warships to be built in the coming years — not including the need of ships /vessels for Indian Coast guard, BSF and Army — besides replacing old ships that need to be decommissioned, he added.
The company had posted FY21 revenues of Rs 199.9 Cr with profit of Rs. 7.8cr and — in meeting the marine orders inclusive of the Indian Navy — is highlighting supply through its six manufacturing plants across Goa, Mumbai, Chennai, UAE and Italy, besides also eyeing expansion of its capabilities in the Navy for: IPMS, complete installation package and service contract for weapon systems.
Uchil said that the company’s clientele in the marine segment – which supported the country’s theme “Make in India” for the navy – included cargo ships, shipyards that were seeking electrical packages for naval, commercial and also inland vessels, besides playing a major role in upcoming electrical propulsion/battery operated vessels.
With electrical connectivity being critical for defence weaponry, he said Marine Electricals Limited has stepped in to fill the breach created by the pandemic that has affected not only the defence, but also other vital sectors like communications, housing, steel, cement and chemicals, besides both Greenfield and Brownfield expansion.
Uchil said that the shipping sector’s electrical requirements comprise: shock-graded motors and light fittings, specialized rectifiers and converters, internal communication systems, integrated maritime LAN systems, valve control and tank gauging systems, fire and flood detection systems, switchboards and electrical equipment, vessel management systems, integral bridge control systems, navigation communications systems, dynamic positioning systems, integrated platform management systems.
He said that the company’s efforts — in meeting the critical needs of the marine segment – included a three-percent spend on Research and Development from its turnover which stood at Rs 2,513 crores for FY-20-21, besides EBITDA at 10% and PAT at 4%.
Established in 1978, Marine Electricals is an integrated technical services provider in the fields of electrical, power electronics, automation and information and communication technology solutions.
Marine Electrical’s operations in the marine segment include; naval vessels, offshore platforms, cargo vessels, passenger vessels and submarines. While the Indian Navy and Indian Coast Guard are its two major clients, the company undertakes complete electrical and electronic installation of all type of warships and commercial vessels, Uchil added.
Over the years, the company had carved a niche for itself as a +Sophisticated, Tailor made, Solution provider+ powered by In-house Product designs, Manufacturing, Installation & Commissioning and After Sales Services, he noted.
“We are global vendors to GE Power Conversion for supplying ‘low’ and ‘medium’ switchgear for electrical propulsion solutions to Commercial Marine, Naval and Oil & Gas sector, besides supplying power distribution equipments and navigation radars to Goa Shipyard in its building of two ‘Frigates’ – in collaboration with Russia – for the Indian Navy,” Uchil said, adding “We are also supplying power distribution equipment for two Diving Support Vessels being built by the Hindustan Shipyard.”
Highlighting the company servicing global needs, Uchil said “Besides India, our strengths are also in supplying the Middle East (UAE, Saudi Arabia, Qatar) and for the ‘small cruise market’ in Europe (Portugal and Greece).
To a question about the size of the Indian and global marine electrical market, Uchil said the Indian market presently highlighted around 750 crores business, that would increase dramatically with newer projects being announced in the future. However, India’s global presence for commercial ships witnessed barely 2% of the total shipbuilding market that is dominated by Korea, China and Japan, he said.
Highlighting the drivers for this industry’s growth in India, Uchil said “We see a large growth coming from the government focus on inland navigation and coastal shipping, that will provide a massive boost to cargo and commercial shipping business. We are already seeing some companies building a series of small cargo vessels to meet their transportation requirements, besides the Government emphasis on reducing “carbon footprint’ witnessing introduction of +electrically-propelled+ marine vessels that will increase our scope of supply and offering,” he said.
