Godrej Process Equipment is among the leading players in fabricating industries. How has been the journey so far?
Started in 1976, Godrej Process Equipment (GPE) has been in business for more than four decades. GPE manufactures the entire range of process equipment for end-users in core industry segments like Refineries, Petrochemicals, Fertilizers, Oil & Gas, Chemicals, Pharmaceuticals, Power and Water around the world.
Since 2004, GPE has been growing at a rate of more than 10 per cent CAGR. The business is a leader in fabricating unit static equipment for process industries and most of its revenue comes from exports. Today, it has its presence in all the continents except Antarctica. In 2016, the company had inaugurated a new world-class manufacturing facility in Dahej, Gujarat. It expanded its footprint internationally by opening a new office in Houston, Texas in June 2015.
The company manufactures the entire range of process equipments for various sectors. Could you quickly take us through some of your mega projects?
We are the 1st company in India to be accredited with ASME U3 Stamp and first one to manufacture Pressure Vessels tested at a pressure of 1500 bar.
We have been manufacturing highly critical Heat Exchangers, Vessels, Reactors and Columns for more than 42 years. Our references for Supercritical Power Plants are also established for Feedwater Heaters.
GPE recently acquired the Yuba and Ecolaire brands and design technologies from SPX Heat Transfer LLC, a subsidiary of SPX Corporation, USA. This acquisition positions Godrej Process Equipment as a significant player in the Power sector; an independent, global player providing critical equipment to thermal, geothermal, solar and nuclear power plants.
We have been manufacturing critical equipment like Reactors, High pressure vessels, Columns, Heat exchangers to all Oil and Gas majors worldwide. To name a few projects, we executed globally- GASCO OGD III project wherein we supplied large solid SS Demethanators through Bechtel; for SABIC we have been supplying critical equipment for most of their projects from SAFCO-I to SAFCO-V, Ibn Zarh, Yanbu Petrochemicals; KNPC for their Clean Fuel project, heavy reactors for Petrobras and for domestic market, projects for Reliance, IOCL, BPCL, HPCL among others.
Any specific sector that you largely aim to focus, or is working on any sectors maximum projects?
We shall continue to focus on Oil & Gas, Fertilizers and Power Sectors. Now with Yuba & Ecolaire acquisition, we shall provide end-to-end solutions in the Heat Exchanger Auxiliaries space in Thermal, Geothermal, Solar and Nuclear power plants.
Godrej Process Equipment has recently acquired the Yuba and Ecolaire brands and design technologies from SPX Heat Transfer. Please elaborate?
Godrej Process Equipment, a business unit of Godrej & Boyce Mfg. Co. Ltd., has recently acquired the Yuba and Ecolaire brands and design technologies from SPX Heat Transfer, a subsidiary of SPX Corporation, USA, a global supplier of highly engineered products and technologies. With this strategic acquisition, we have positioned GPE as a significant player in the Power sector; an independent, global player providing critical equipment to thermal, geothermal, solar and nuclear power plants. Addition of key people from the SPX Heat Transfer design team will also significantly enhance Godrej’s design capabilities in this space. We have always been in the forefront of adopting technology to offer the best in class solutions to our customers. The acquisition of technology from SPX is another step in this direction and coupled with our proven manufacturing capabilities, it will help us offer advanced, comprehensive solutions to our customers
What are your expectations from the acquisition?
With this acquisition, Godrej will be capable of providing end-to-end solutions in the field of heat exchange auxiliaries in the power generation sector. GPE was already producing feed water heaters using Yuba design and technology. Now, by acquiring the brand, Godrej has direct ownership of the technology. Using Yuba technology, in the past, Godrej has already supplied feedwater heaters to various power producers like Nuclear Power Corporation of India, Tata Power, Gujarat State Electricity Corporation, NTPC, and even to main plant equipment suppliers like Toshiba, GE. Godrej will be manufacturing heat exchange auxiliaries, mainly feedwater heaters and surface condensers, at the Mumbai plant as well as that in Dahej in Gujarat. These acquisitions also help leverage the significant capital expenditure planned at the Dahej plant.
The company has worked for various projects, globally. How has been the Indian market as compared to the international markets?
We see India and Asia-Pacific in general growing. In India, we have seen accelerated growth. When the economy grows at this rate, it has an automatic beneficial impact on core sectors. India is one place that will provide us huge volume of demand. At the same time, in the developing countries in the Far East like Vietnam, Myanmar, Indonesia, we see a lot of new investments both in terms of fertilizer, upgrades and revamp of refineries etc. The Middle East has always been one of the primary markets, this region has always provided a lot of demand opportunities. Some of the countries that were not on the industrial map for many years are now seeing an upsurge in demand.
Although the global market does not look very optimistic right now, we believe that the future will be very bright. Hence we are currently looking at the Middle East, India and some countries in the Far East, which will give us a huge volume opportunity.
Welding sector plays a major role into the manufacturing of any equipment. Your say.
Welding is a technique which is widely used by manufacturers in India due to its precision, reliability, cost-effectiveness and the high-tech method used for joining materials in manufacturing industries. Objects that we see around on daily basis, right from buildings to bridges could not have been possible without welding thus proving that it plays an essential role in our day-to-day life. India’s GDP, to some extent is also relying on the welding industry.
Availability of skilled welders is one of the major challenges in India. How do you manage to cope up with the same, as Godrej Process Equipment has a huge team of well qualified welders?
Our welding engineering has over 1900 qualified procedures for a wide variety of metallurgies from ferrous to non-ferrous grades. Welders capable of welding in 6G welding positions have been qualified under reputed inspection agencies like LAS, DNV, BV, TUV, etc.
Our welding engineers have developed automatic welding processes for internal bore overlaying of small internal diameter, tube-to-tube sheet welding by orbital TIG, long seam welding on long seamers, nozzle welding, strip cladding by SAW and Electroslag processes, narrow gap welding for thick circ-seam and long-seam joints. Retaining skilled workforce has resulted in our success and we are confident of growing with our most import asset i.e. people.
What are the major challenges you witness? How do you aim to resolve the same?
The process equipment industry, like any other has its own set of challenges. It is an industry that is heavily dependent on specialized skills not only on the shop floor, but also in managerial functions such as project management and estimation. The Pressure Vessel grades of steel that the Industry requires is not currently produced by India and a large portion of the critical materials must be imported, thus imposing time pressures on Indian manufacturers that are not faced by their foreign competitors. The introduction of GST has helped levelling the field to a large extent and has enhanced competitiveness among players. The continued growth of the economy should enable the government to reduce rates in the near future. This will boost the economy. While infrastructure is improving, we still have miles to go before we reach the standards of countries like South Korea, where many of our competitors are based. Competition from China is also greatly increasing. Companies are increasingly investing in skill development which is essential in order for the industry to realize its full potential. The Government’s “Make in India” initiative is laudable and policies must be enunciated in support of it. ‘Local Content’ requirements are also being mandated globally. This is great from a domestic standpoint but not much from an exports standpoint. Brand ‘India’ is only becoming stronger, which means that Indian Companies will have to continue to work hard to reinforce the positive values of this brand and a sustained good performance should work.
In terms of global demand, we are a major player in the field and we rank amongst the top fabricators in the world. We export 85 percent of what we make, so we have access to global markets that we have built over the years. However, it is a challenge to build that channel with new players. For that, you have to constantly keep yourself upgraded in terms of design capabilities, manufacturing capabilities, engage with your clients in a very responsive manner, letting them know how you are upscaling your capabilities, ensuring that you have the right skill set, upgrade working environment, etc. These are the things we do at Godrej and these are our competitive strengths in the market.
‘Safety at site’ is one of the key factors. What are your efforts towards safety?
Safety is of prime importance to us and it is visible in the way we operate. HSE practices that are followed in Godrej Process Equipment are of global standard and we encourage our workforce to contribute in building a better and safer workplace. We look for opportunities to go beyond the standard to provide additional safety features to our engineers.
Apart from the manufacturing unit in Mumbai, the company also has its unit in Gujarat. Can you brief us on the Gujarat unit?
Our strategic new facility in Dahej creates many opportunities for us enhancing our manufacturing capabilities and thereby offering a complete package to our customers. Dahej facility being in SEZ, we aim to improve our revenue from exports even further. We also look at venturing into new products which have great potential throughout the world. Having our own water-front jetty also allows us to manufacture equipment with no size restriction.
Recently, Godrej Aerospace had bagged ₹200 crore Rolls-Royce deal. Please elaborate. What would be the nature of work?
Godrej first bagged a contract from Rolls-Royce in 2014 for manufacturing unison rings. Since then, it has also started complex sheet metal fabrication. Godrej’s partnership with Rolls-Royce necessitates it to manufacture unison rings, complex fabrication and external brackets and will supply 600 different parts to Rolls-Royce’s civil aerospace engine portfolio. The company has secured the contract to make the parts at its new facility in Mumbai over the next five years. Godrej’s partnership with Rolls-Royce would help the latter shave off 20-30 per cent of its costs, compared to what it would have incurred in another country, hence, fabricating brackets is just the beginning of a great journey to manufacture long beam longer on, which generally is the floor beam, the very foundation, and forms the basis of the aisle in wide-bodied aircraft. With this partnership we position G&B as an important player in the civil aerospace sector having internal end-to-end capabilities to manufacture aircraft engine components for global requirements.
At the same time, aerospace facility was also inaugurated for the manufacturing of sheet metal brackets. (Investment, total area, location, capacity, purpose, etc)
The company has recently launched a new facility in Mumbai i.e. – Center of Excellence (CoE). The aim of the Centre of Excellence is to support Godrej Aerospace in strengthening it’s the foothold in the aerospace sector. The CoE will be instrumental in expanding Godrej’s capabilities in civil aerospace by having internal end-to-end capabilities to manufacture aircraft engine components for global requirements. The facility will be capable of meeting the diverse needs of aircraft manufacturers, and can cater to fabrication, machining, assembly as well as testing of special processes required in aerospace and defense applications. We are hopeful that with the help of our facility, we will be strengthening India’s position in the Global map in the aerospace sector. It will be supporting Government’s vision of Make in India.
The company largely contributed also to the Mangalyaan spacecraft project. Can you elaborate on that?
For the launch of Mangalyaan, Godrej Aerospace built mission-critical items for this launch such as the liquid engine used in the Polar Satellite Launch Vehicle (PSLV), precision components for the orbiter thruster as well as the ground system antenna together with on board antenna. Godrej Aerospace’s association with ISRO goes back a long way, beginning in 1985 with the supply of precision machined parts for various ISRO projects. Over the past three decades, Godrej Aerospace has been entrusted with increasing work from ISRO and this has resulted in increased participation, especially for complex equipment such as liquid propulsion engines for PSLV and GSLV rockets, thrusters for satellites and antenna systems. Significantly, the MARS mission saw the 25th (Silver Jubilee) flight of the PSLV.
Do you have more plans for tie-up, in the coming time?
Wherever business demands technology tie-ups, we never think twice about it.
Any upcoming project? Can you list down any three?
Investments in the field of Oil & Gas, Fertilizer and Power are increasing, therefore providing strong demand for process equipment. With refineries moving to upgrade their capacities in sync to produce BS-VI, there will be increased investment in process equipment, machinery, production lines and training man power. This upgradation to BS-VI fuel will provide the process equipment industry with huge business opportunities, however, it will only be limited to those players that technologically upgrade themselves to meet modern standards.
Your expansion plans?
Our existing product portfolio offers us great opportunity to increase revenue further and with the inclusion of Yuba and Ecolaire, we are well positioned to achieve our target. Investments in Oil & Gas and Power Sector are providing momentum to our business and we are venturing into new products to further encash on our decades of experience.