OVER THE 3K MARK !
The year 2007-2008 saw the industry netting revenues to
the tune of 3054 crores INR. This is exclusively the end-user sales
figure. However the over all industry revenue was estimated at 3474 crores
INR. The reason why the total industry revenue is much higher then the
actual end-user sales is because many a companies procure finished
products from others & brand them as theirs, and our survey team gets
the turnover from both, resulting in duplication. With nearly 740
companies responding to our survey, giving us the information we sought in
great detail, knowing fully well how much the company has manufactured
with excise paid. And also trying to find out, which companies procure
finished products from others & brand them as theirs, an exercise
which has been done only twice before, we did all of it again to give
continuity to the process.
We are sure the figure which we
have arrived at i.e. the actual end-user sales revenue of UPS has
definitely crossed 3000 crores INR.
Growth wise it has been a very good year for most of
Revenue wise : Industry
grew by 27 % over one percent more then last fiscal of 2006-2007.
Volume wise : Industry
grew by 44% over previous year. This clearly indicates shrinking margins.
One must be clear in mind that this is a very good
performance considering the stiff competition and the squeezed margins and
especially the lead prices which has gone sky high last year.
Of the total revenue of 3474 crores, Online UPSs
accounted for 84% while Offline / Line interactive UPSs accounted for
nearly 12% while other products including Servos & CVT accounting for
Elent controls the CVT market with nearly 60% of the
CVT market share. Of the total revenue organized sector accounted for
nearly 60% while 25% came through semi organized sector while 15% share
still remains with the unorganized fly by night operators.
went about asking that its prediction that the total industry revenue will
touch INR 5000 crore mark by March, 2010 trying to know what the Industry
leaders thought. Many had little or no doubt to what Softdisk has
predicted earlier even though this response was at time when the Global
Economies were facing the worst ever economic crises, and Indian market
was also shaken by it. According to Mr. Vivek
Jain of Delhi based Microtek International Pvt. Ltd., economic
meltdown will not be having any major impact on this segment, as the UPS
segment is connected with the IT/PC/SOHO MARKET, those users buying PC
will definitely buy UPS for protection of their system, branded player in
this area will be benefited, and as the rupee has depreciated massively,
thereby hitting the trader community, which has been importing cheap
product from China, their market share will shrink and the real
manufacturer will be able to further increase their market share.
Deepak Sharma , Country Manager, UPS for Delta Energy system Pvt. Ltd.
echoed the sentiments according to him India is big market with huge
potential in terms of growth segregated in organized and unorganised
sector. Therefore, We agree to this number and infact the figures could be
larger. However, we can definitely expect global meltdown and the slowing
down of the world economics to have an impact on this, he laments.
He is highly optimistic of Delta’s performance in the
coming years, we are well poised for a larger pie of this market in terms
of introducing finer products, expanding our geographical reach by
introducing new branches, technology innovations, investments in R&D,
improved service support, aggressive approach towards market, and last but
not the least networking with partners. Besides our aggressive business
plans, we are committed to serve the environment and bring about greener
technologies, he laments.
R Chellapan of Numeric Power Systems Ltd., Chennai feels,
Softdisk has more scientific way of evaluating the market for its volume
and quality then any other agency and the overall UPS sales by 2010 might
cross 5000 Crore mark, subject to IT recovery. NUMERIC, which has been the
leader in the UPS industry, has taken larger initiatives with most modern
manufacturing infrastructure to address the mass production requirements
and geographically expanded to over 220 locations as of now.
With India assuming a key role in Asia, businesses have
become attuned to the fact that they need robust infrastructure to attract
and retain investors.
Well Govt. of India, recent singing of Nuclear Deal
with the US, more importantly India getting NSG Waiver at Vienna after
long deliberations and oppositions from certain countries is a welcome
sign as it has opened gates for Nuclear Power Plants, 27 of them stated to
be coming up by 2020.
With many new avenues opening up in bio-medics,
telecom, process automation and in almost every sphere of life, this also
indicates the future is very bright keeping in mind the current utility
power scenario of the country. All this augers well for the Indian UPS
Industry as Power Quality & Continuity will be the most sought after
thing in years to come. So not withholding the resent economic meltdown,
the ray of hope for the Power Electronic Industry in the country remains
to Mr. Sandeep Nair of Emerson Network Power
(India) Pvt. Ltd., Thane, Today Indian power conditioning
market is getting more sensitive and mature to the evolving needs of the
businesses. With India assuming a key role in the Asian economy,
businesses have become attuned to the fact that they need to be robust in
terms of infrastructure to attract and retain investors. Hence, Business
Critical Continuity is being viewed strategically and upcoming businesses
are realizing the importance of factoring and aligning it as key component
in the overall business model.
In India, the five cities of Mumbai, New Delhi, Chennai,
Kolkata and Bangalore have been the largest markets for power products.
However, there has been a shift towards B & C Class cities such as
Pune, Chandigarh, Lucknow, Hyderabad, Jaipur to name a few. These
locations are fast becoming global hubs in terms of R&D, ITES &
BPO, Retail, and Manufacturing and given the criticality of operations
undertaken in these sectors, there is an increasing need for comprehensive
network uptime solutions, Besides, given the upward spiral in terms of PC
penetration in these cities, these cities have been showing a marked
growth. He laments.
Pradeep Pimpley Director & Chief Operating Officer of DB Power
Electronics Pvt. Ltd., Pune, elaborated on this issue,
according to him When we speak about market, we have an enterprise market
segment in mind. Most of the top notch UPS companies like Emerson, APC,
Socomec, Eaton Powerware, PCI to some extent, are mostly serve this
business segment. Earlier when Numeric when associated with Socomec or MGE,
was also a part of this market segment, apart from its presence in Banking
and Finance segment for lower ratings UPSs. As per our understanding, the
market segment revenue (excluding precision A/C, Electrical distribution,
etc.) for UPS Systems is close to INR 3000 Cr. Looking at the present
market scenario, the revenue collection from this segment shall be within
INR 3500 Cr.
Economic slow down has adversely affected IT and IT
infrastructure segment. The expansion plans are put on hold by most of the
big names in IT, ITES. Even the aggressive companies in IT infrastructure
segment are no exception. Their more emphasis on best utilization on
existing IT facilities and also human resource. Even the Data Centers
projects in telecom segment with few exceptions are either postponed or
put on temporary hold. In last six months the demand for high power UPSs
above 200KVA has gone down considerably. The situations now is wait and
watch and do the things which are of most urgent in nature. If the similar
situation continues for next two quarters of 2009, then, the
situation in year 2010 will be more tuff. This market will not show growth
not more than 10% of the previous year.
Adding further With reference to DB Power, we view the
present market scenario as an opportunity to strengthen our presence in
Industrial market segment. As you are aware, that, other than Emerson, DB
Power is the only company in India, having its strong presence in
Industrial market, besides IT and other market segments. 35% of our
revenue is from Industrial segment. The economic recession has not so far
affected, Energy, Power, Oil & Gas Segment. We expect more business
from these segments and continue to maintain our growth. Apart from this,
some business revenue is also expected from specialized products what we
manufacture for niche market. This shall also contribute to our growth
Now, since DB has become part of Chloride Group
Company, in years to come, DB – Chloride shall make its presence felt in
the global market also. We are getting good response for customized DB
products in neighboring countries as well as in Middle East. He laments.
Narayan Sabhahit Managing Director, Techser Power Systems Pvt. Ltd,
Bangalore, believes that The average market in enterprise
segment (in which we operate) is expected to grow at the rate of 15 -20%.
The data center market is expected to see a growth of 20 – 25% as
compared to last year. However, the remaining IT market growth is expected
to the tune of 10 - 12%. Last few years the growth rate in the market has
been encouraging and UPS shipments taking a cue from the PC market have
also witnessed a very significant growth, but since melt down, things have
been tough, it will correct itself in a quarter or two, he lament. He
further adds, the UPS penetration is now taking place in cities and towns
outside the top 20 cities. According to him “Today the development
process in every vertical is witnessing a speedy growth. Interpretation of
word ‘development’ in its correct form, has been taken seriously by
the concerned agencies / authorities. The Infrastructure development
required to address the challenges of 21st century is being put in to
place. This is a good sign to a certain extent Government is also keen in
making efforts towards enduring availability of Power. What we see today
may not be looking very rosy form the Govt., but I am sure with nuclear
deal and Nuclear reactors coming up there will big orders from companies
like ECIL, BHEL, BEL and the likes. “We at Techser are fully geared to
latch on opportunities when it presents. As always, Quality of the product
& support package will remain paramount to us.”, he laments.
Speaking on the overall scenario of the industry Mr.
Sabhahit believes that all this put together, there is growth pattern
happening. These are the areas where continuity of power is very
essential, since these companies are facing the Global Challenges. And
hence the demand for the UPS and Complete Power solutions is on the rise.
Mr. Ramdin Sangha of WeP
Peripherals Ltd. Bangalore, has a different view. We expect a
more modest UPS market growth than we have seen in the recent past due to
current market sentiments and expectations of this trend to last till
middle of 2009, especially on the enterprise segment. Power is a
fundamental requirement in a variety of industries and interestingly, we
have seen power business maturing into niche segments & applications
recently. It is too early to call and we hope the total industry revenue
meets the INR 5000 crore mark by March 2010.
R K Bansal of New Delhi based Uniline Energy Systems Pvt. Ltd., New Delhi
feels that the growth rate in the market has been encouraging and UPS
shipments taking a cue from the PC market have also witnessed a very
significant growth. With UPS industry thriving in interesting times with
growth in industries such as IT/ITeS, Telecom, Banking, Insurance and
manufacturing over the last year. What is relevant is that all of these
have their typical power conditioning needs and an all round growth, right
from entry level products to high-end UPS in the current financial is
expected, however after two good quarters things have slowed down off late
clearly showing the impact of economic crises, the world is facing.
However we can hope India with strong fundamentals will be able to tide
over the crises. What we are calling as meltdown is basically market
correction, and from past experiences whenever market corrects itself, it
usually over corrects and once the recession stops, it tend to climb up to
correct levels. We see an increase of 10-15% in sales taking into
consideration the recent recession in the market in JFM quarter. The world
cannot ignore an emerging economy like India and hope fully things will
settle down for the better. “On our part Uniline is fully prepared with
Modular UPS Systems and Three phase UPS Systems with touch screen
operations, all set to garner the larger pie of the increasing UPS market.”,
According to Mr. I B Rao &
Mr. M R Rajesh of Powerone Micro Systems, Bangalore, India’s
GDP growth is currently hovering around 8% mark which gives us an
indication of the industrial expansion that is already happening at a
rapid pace. The buoyancy of the Indian economy is reflected in the growth
of the UPS category. This growth rate in an economy that is already the
world’s fourth largest in real terms (Purchasing Power Parity) is
expected to grow the fastest amongst the four engines of world growth,
BRIC (Brazil, Russia, India, China).
The key factors for India’s growth in the UPS market
Increase in PC & server sales resulting in
increased demand for UPS.
Increased penetration in B, C & D class cities
has been another reason for the category growth.
Growth in the economy has led to the growth and
increase in IT spends of verticals like IT, ITES, manufacturing, BFSI
and Government. There by leading to the increased demand for the UPS
systems in these verticals.
Increased awareness for quality of power has also
boosted the demand for UPS systems. UPS provides protection against
voltage fluctuations and low voltage.
Talking on fluctuating prices of base material of the
UPS Systems, Mr. R Chellappan of Numeric
& Deepak Sharma of Eaton both believe that price hike in base
material is past its peek, while the cause of concern has shifted to
adverse foreign exchange rates. Mr. Chellappan believes this Financial
year will educate us about recovering a disaster apart from managing the
Nair of Emerson says “In the past few months the net materials
cost of all the products have gone up and we are taking all cost cutting
measures to control the pricing and offer great value to customers.” We
are doing reverse engineering and research to check all the possibilities
to reduce cost without compromising on quality, he laments.
Tejas Sheth of Asia Powercom,
Mumbai is of a different view, he believes that price
volatility in UPS industry was very rear. Currently also raw material
prices have varied quiet a bit but the final product prices have really
not varied much. Most of the time it is UPS manufacture who has taken the
hit. Its only when battery prices go up final product price goes up. In
the beginning it was very difficult but over the last 3 quarters end
customer is educated by all vendors. Now end customer understands &
accept the price change as & when. Though it is not that easy.
to Ramesh S, Managing Director of Powertronix
Pvt. Ltd., Bangalore. ”The metal price fluctuation is
definitely disturbing the business. Every time the change in the price
takes place, it takes 2 to 3 months to settle down our business from the
disturbance. But now Powertronix has already came out with some of the
Transformer less UPS Technologies, which solves the problem to some extent
to keep us independent from this impact. Off-course right now the lead
price is impacting our sales about which we are unable to do any thing.
According to Mr. Ramdin Sangha of
WeP Peripherals, there is no other alternative than to explore
alternate technology. This can be in the area of battery &
transformers. We also need to revisit feature-value equations for
customers to try and optimize wherever possible. There is by no means a
quick fix solution but we are making concrete & definite plans to
ensure that the value we provide to customers remain optimized.
ON GOVT. TAXATION POLICY
Sumanth Kumar of Bangalore based Powernet Solutions Pvt. Ltd.
was very empathetic when he says “GOI introduced VAT to create a uniform
taxation, currently 4% but we find some state Govt.’s not ready to
implement. This is ridiculous.
He further adds “Duty free imports should be avoided
as it would totally kill the domestic industry.
At least a minimum duty should be levied on imports of
all sorts as it would help survive and sustain the domestic industry.”
He further adds there should be a single point tax and any number of
resale should just attract a minimum of 1% as resale tax, strong words
from a man who advocates and practices high ethics in his business.
to Mr. N P Krishnan of Chennai based Consul
consolidated Pvt. Ltd., there is no support coming up from the
Govt. side to the power backup industry, Quality power is the basic
facility the government should offer to the industries. When the
government is failing to provide, then the power conditioner’s industry
has an opportunity.
So government should consider the subsidy for the UPS
customer. Tax structures are still uneven. Cumbersome entry forms and
Octroi still exists in some states, and should go.
We expect the new Govt. to do some work on this front,
to Mr. Anil Munjal, Vice President, Marketing of
PCI Limited, New Delhi : “The government is quite conscious
of the power scenario in the country, yet it seems that all the new
addition to the installed capacity do not gives us the comfort of
continuous power even by the year 2012. Despite this grave situation,
there are no special incentives or support for the UPS installation except
in a very limited way. Considering the importance of UPS Systems in a
growing economy and keeping in view the power scenario what it is, the
Govt. should certainly exempt all UPS Systems from import duties and
After all, what will an importer or manufacturer do
with UPS Systems or batteries except to use them for ensuring continuous
good power quality and help to generate more affordable and help cut cost
for our manufacturing and services and thus make them somewhat more
competitive globally, he adds.
Softdisk believes that being a negligible contributor
to the GDP, Power Electronic Industry does not receive enough attention
from the Govt., we believe the Govt. should realize the importance of
Power Continuity as it is the life line of major GDP contributors.
to Mr. Arun Ghosh of Kolkata based HiTA
Technology, “We feel there is a trend in the market where
slowly manufacturing activities are shifting to sourcing because of low
cost kits available for cheaper price but the threat is whether these kits
are suitable for Indian power conditions requiring UPS to give higher back
up time and extreme temperature fluctuations like high, especially in
summer.” People are simply carried away by price tags rather than
compatibility of these kits to our country.
However Tejas Sheth of Asia
Powercom believes, that it is the survival of the fittest. In
Inverter industry it is only Indian manufacturing which is ruling as they
have put in the infrastructure. But in UPS not many companies have put in
infrastructure & hence we see major portion being imported. Its just
due to their manufacturing capability they are able to become economical.
India can also do the same stuff which we see with Inverter manufacturer.
But currently yes, it is Chinese manufacturing which is dominating the
to Mr. Subodh Tagare, Director Marketing of
Bangalore based APC, the Chinese manufactures have set up world
class manufacturing facilities and also have kept labour costs low.
Their expertise in large-scale quality manufacturing
and high productivity is reflected in some of their products.
However, the Chinese manufacturers do not seem
comfortable with products made using flexible manufacturing systems,
complex industrial engineering, dependent multiple vendors or products
requiring customization. In addition to this their products may not be of
In order to face this challenge, Indian companies have
to follow the principles of globalization - sourcing parts from wherever
it is price-effective. Moreover thought has to be directed at eliminating
waste, improving co-ordination with vendors, reducing the down time of
machines, full capacity utilization and better bargaining with buyers and
to Mr. S A Joshi, Executive Director, Aplab Ltd.
Thane, UPS is a growing market and is fed to large extent by
imported UPSs in small ratings of 1-10 kVA, mainly from China, Taiwan etc.
because of the economics of that are suitable to most Indian companies.
But he too agrees that they are not perfectly suitable to vagaries of
Indian Power conditions.
He further adds those importing UPS kits make cosmetic
changes and sell it out as their brands.
This is cost effective to those with smaller turnover
and also those operating from tax free zones like Parwanoo.
He adds at Aplab “Our concentration is on the Middle
& Higher range of UPSs. We have a huge demand of these UPS Systems
from BPOs & CALL CENTERs”, he laments.
Similarly, Mr. Deepak Sharma
of Eaton Power Quality is very clear in his views according to
him globalization, like outsourcing, is here to stay. Today, businesses
can source goods from around the world, produce their product wherever it
makes economic sense, and sell it anywhere. International trade is
forecasted to grow at twice the rate of the world gross domestic product
(GDP). The economic impacts of globalization are enormous.
Rather than fight globalization and market forces, it
is prudent to adapt oneself to changing circumstances, focus on low cost,
high quality products backed up with a good service network, to take
advantage of the market reality.
Softdisk believes that finally it all boils down to
service, companies with better service infrastructure will always survive.
We have seen even the companies offering Chinese product doing well as
they are at the top when it comes to services.
Taking of collaborations most of the company in top 20 list
have a foreign collaboration. Either these foreign companies are directly
present in India thru 100% subsidiary or thru JV, technical tie-ups or a
distribution arrangement. Only exception to this list is Delhi
based Tritronics India Pvt. Ltd., headed by Mr. Rajeev Chatrath,
who preferred to duck this question when queried, why no tie-ups? Numeric
breaking relations with Socomec, it is another company which can be
excluded from this list, however there international presence makes it
connect to many a foreign companies.
IDEAL UPS & FUTURE TECHNOLOGY
Talking of future technology & Ideal UPS Mr.
Anil Munjal of PCI believes that the worldwide power requirement of
UPS Systems are normally between 1MW up to 40 MW for clean power
requirement by Data Centers or process Industry. In India, this is
relatively low since the largest of the Data Centers are still near about
2MW power requirement on an average where there is demand for high power,
these high power application can easily be met with Pillar battery less
UPS Systems. Technology as a differentiator as for online UPS Systems will
be irrelevant as manufacturer rush to perch themselves on the ground of
technology. IFBT has become a major technology in product offering.
Increasing technological party will focus UPS manufacturers to stress on
functionality in equal.
C Nagali of Bangalore based Cosmic Power Solutions Pvt. Ltd.
believes, today’s UPS units should be capable of supplying non-linear
type loads without de-rating or degradation in total harmonic distortion (THD).
This would require the computation of critical
electrical loads, before selecting the UPS capacity, considering the power
requirements of each piece of equipment to be protected. An ideal UPS
system should take care of the output voltage and frequency regulation.
Finally, a good UPS should also allow for 25 to 30
percent future expansion. In addition, the service capabilities of the UPS
manufacturer also matter greatly in case of mission-critical applications.
According to Mr. R Chellappan of
Chennai based Numeric Power Systems Ltd : The high-end UPS segment
is a value-driven business. Today the driver for the high-end UPS segment
is the cost of downtime due to the non-availability of critical systems.
Manufacturers and service providers are looking to reduce operating costs
and raise productivity.
According to Mr. Pradeep Pimpley,
DB in collaboration with Chloride has come up with high efficiency
DC modules which works on the principal of rotating energy storage. The
individual modules are available in different power ratings with
adjustable DC Voltages to suite UPS specifications. For increasing the
back-up time, the modules needs to be paralleled and there is no
theoretical restriction on number of modules which can be paralleled. In
practice Chloride uses these modules with a paralleling of 8 Nos., which
is sufficient to meet requirements of high power data centers. These are
the excellent solutions for large power requirements (1000KVA &
above). The beauty of this solution is that it can also be used in
parallel with existing battery bank or new battery bank to reduce extra
stress on batteries. This solution shall eliminate requirement of large
battery banks, space, battery related maintenance, battery related safety
issues like fire hazard, etc. The estimated life of these DC modules is
15-20 years. The maintenance is practically NIL, and the operating cost
over life is reasonably low, he laments.
Softdisk has seen it all over the past 17 years, more
often then not some of the companies use a lot of word jugglery in there
promos, it must be the same thing which some one else must be offering
without making lot of noise and at a better price. It is one area where
customers need to be watchful.
Some current technology trends are:
High efficiency machines reducing operating
Less harmonics from UPS resulting in low pollution
Highest power to footprint ratio which will lower
real estate costs
If the economic down slide continues, it will be
difficult times for the industry, however Softdisk believes it is just an
over-correction & Power Continuity being critical for all sectors,
things will normalize by next quarter.