Interview – “We are looking at doubling our exports share in the next 3-5 years”

Showcased On:- Electrical Monitor Magazine

Dated:- January 2010

Saif F. Qureishi CEO & MD at KRYFS

Mumbai-based KRYFS Power Components Ltd Ltd is a leading manufacturer of transformer laminations and cores, with a strong exports presence. Saif Qureishi dwells on the company’s capabilities, strengths and discusses the road ahead. He explains to Electrical Monitor that KRYFS intends to retain its leadership position through continuous innovation, expansion, and technical up-gradation. By 2015, the company has a vision of being amongst the top three lamination companies globally.

1. Tell us in brief about your Company’s manufacturing capabilities (plant location, capacity, etc.) in the areas of transformer laminations (cores) and CRG0 strips.

Our company is the leading manufacturer and supplier of transformer laminations and cores to the Indian transformer industry. We have two modern, fully- equipped plants located in Dadra & Nagar Haveli and Palghar, with an installed capacity to manufacture over 30,000 tonnes per annum of transformer laminations and 7 CNC cut to length lines, the most modern laboratory for testing electrical steel in the country and some of the biggest and most prestigious transformer manufacturers like BHEL, Crompton Greaves, Bharat Bijlee, Areva, ABB, Emco, Kanohar, IMP Power any many other quality-conscious companies of high repute as our customers.

2. What would you say are the major strengths of your company and why would customers prefer to buy from you over another competitor?

It is possibly not in place to talk about our strengths ourselves. It is for our Customers to realize why they choose to buy from us over another competitor. However, based on customer feedback, we can say that some of our major strengths are:

• Direct purchase of prime CRG0 from over 9 manufacturing mills all over the world
• Complete domain knowledge, design capabilities, and core manufacturing capabilities in all types of step lap core design
• Continuous R & D on CRG0 materials and core building and complete traceability through one of the best laboratories in the country
• High-end accurate manufacturing machinery and technical ability to understand and deliver what the customer needs and requires
• Largo stock of all grades of material from different mills

A committed team of professionals dedicated to the 6-H values of honesty, humility, helpful nature, human approach, hard work, and happy outlook on life

3. India’s power T&D sector is estimated to see an investment of over Rs.6trlllion in the XI Plan period and transformers will form a crucial component of the capital expenditure. How is your company gearing up to meet the growing demand for transformer cores?

We are continuously tracking the capacity expansion and the demand in the transformer industry and strategically increasing our capacities accordingly. However, we don’t want a situation of overcapacity as this industry is not a very high-value addition industry. Over-capacity will kill the industry, especially the smaller player.

Having become the leading manufacturer of transformer laminations with the largest automates capacity in the country, we intend to retain our leadership position through continuous innovation, expansion, and technical upgradation. We are now not just focused on the Indian market, which of course is and will always remain our main area of operation, but we now look at the world as our market, with exports to over 22 countries and has received the EEPC star performer export awards for four consecutive years.

4. India has been making transformer laminations over several decades. What key technological advancements has the industry witnessed? Like- wise, what have been the key product improvements at KRYFS?

I think the major development over the last 4-5 years has been the rapid automation in the transformer lamination industry. Traditionally transformer laminations were produced manually in India on treadle shearing machines with a high degree of labor content and low automation. KRYFS invested heavily in automating its plants over the last 5 years. In the last two years alone we have invested over Rs.35 crore in new plant and machinery and upgrading our existing facilities.

This has allowed us to offer new products like horizontal step lap laminations, vertical step lap laminations, and laminations with high accuracy and low burr. This in turn has contributed to the reduction in no-load losses for the transformers manufactured by our customers by up to 8 percent; and as everyone knows, power saved is power generated.

0f course one of our major strengths is to be able to not only deliver step lap laminations but prepare the complete design of step lap core-based on the Customer’s requirement and also give a completely built-up Step lap Core (up t0 50 tonnes in Weight) With guaranteed No-Load Losses. This is our USP

5. We understand that the availability of cold-rolled grain-oriented (CRGO) steel in India is constrained due to heavy reliance on imports? How can availability be improved?

Availability of CRGO has considerably eased up over the last year, with all manufacturing mills significantly expanding capacities coupled with a fall in demand in the west due to the economic meltdown. Currently, the prices of CRG0 have been moving downward for a while and if this continues for some more time, it is possible that the product may again become contribution-negative for the mills. This could lead to closure or diversion of manufacturing capacity to other more profitable products and this may again lead to an increase in the CRG0 price.

In India, the Steel Authority of India and Tata Steel have tried to manufacture CRG0 unsuccessfully over many years as it is not easy steel to manufacture. 0f course, TKES India (ThyssenKrupp Electrical Steel India Pvt Ltd) has a plant in Nashik which basically finishes the Mg0 coated G0 steel coils from its mother plant in Europe. However, the capacity of this plant compared to the total demand in India is less than 5 percent.

6. What is the estimated torrent size of the transformer lamination industry, and what would be the growth rate in the medium term?

The estimates of CRG0 imports into India vary from 200,000 tpa to 225,000 tpa. 0f this almost 25 percent or so is estimated to be of seconds and defectives which is not the standard grade of CRG0. The demand for transformer laminations is of course closely linked to the demand for transformers. Our estimates are that almost 50 percent of the laminations requirement in the country is met by core cutters (lamination manufacturers). This translates to demand of approximately 100,000 tonnes for the transformer lamination industry. This demand is forecasted to grow at 10-12 percent annually in the future

7. We understand that KRYFS Power Components Is a recognized export house. Currently, what proportion of your transformer core sales comes from exports?

Around 20 percent of our sales currently come from exports. We would like to double this share over the next 3 to 5 years. We have been awarded the Star Export performance award by Engineering Export Promotion Council (EEPC India) for four consecutive years and this has given us the necessary impetus to focus more aggressively on the export market.

8. Going ahead, do you see significant growth in exports? Which countries will be the main export Destinations?

Growth of exports depends obviously on the economic recovery under-way in the major developed economies in the world. As I said earlier, we are looking at doubling our share of exports over the next 3 to 5 years and therefore we are going to give a lot of attention to this segment of our market. We hope to export more to the African and European markets in the future. However, as far as exports are concerned, it all depends on the global recovery.

9. In the medium term, which new areas in the power T&D sector are you planning Io explore; for instance, EPC contracting business for power T&D projects?

We intend to remain focused as a transformer lamination and core manufacturer and do not intend to venture into any projects or EPC contracting business.

10. Please summarise your growth plans for KRYFS Power Components in the medium to long term. What are your major corporate goals for 2015?

We intend to retain our leadership position in the Indian market through continuous up-gradation and innovation. Our benchmarks for quality and processes are the best lamination industry in the world. By 2015 we intend to be in the top three lamination producers in the world in quantity and quality terms.