Anup Engineering, a manufacturer of static process equipment, is eyeing robust growth in the chemical process industries with investments picking up. Refineries, petrochemicals and fertiliser sectors will offer substantial opportunities in the next five years in the domestic market, says Rishi Roop Kapoor, CEO, Anup Engineering. In conversation with Rakesh Rao, Kapoor highlights the emerging trends in process equipmnet industry and the company’s plans to tap these opportunities.

 

What was the rationale behind Arvind Ltd's de-merging engineering business (now Anup Engineering) into a separate entity? How will it help Anup Engineering?

The demerger provides a better focus to Anup Engineering to chart an independent course best suited to its specific business needs. This will help unlock Anup’s full potential and sustain its growth to become a Rs 1,000-crore business.

 

What is the estimated turnover of Anup Engineering? What are your targets for 2018-19?

Anup Engineering achieved an annual turnover of Rs 226 crore in FY 18 and will grow by about 10 per cent in the current financial year. The somewhat tepid growth has to be looked at in view of the major capex underway at Anup which is happening alongside production. The benefits of this capex will be realised in FY 20 onwards. 

 

Could you please share details about Anup Engineering?

Anup is primarily into manufacturing of static process equipment - mainly shell & tube exchangers, columns, reactors and pressure vessels for core sectors like crude oil refining, petrochemicals, fertilisers, chemicals, power and water treatment plants. All these equipment require high end engineering and design capabilities such as thermal design and vibration analysis, FE analysis and designing under fatigue conditions. Anup is well placed to offer equipment as well as special design services to our customers.

 

Exports were about 70 per cent in the FY18. However looking at the major opportunities coming up in the Indian market, we expect the exports to be around 45-50 per cent in the coming 3 years.

 

How is demand dynamics for the various products offered by Anup Engineering? Are you seeing high demand for some products compared to others?

These are all process equipment classified under ‘pressure vessels’ and as such their respective requirements depend on the type of process plant being built. For example a DHDS unit for a refinery would require more reactors and high pressure exchangers.

 

Are you bullish about any specific end-user industry for driving growth in future? How do you intend to tap this potential market?

Refineries, petrochemicals as well as fertiliser sectors will offer substantial opportunities in the next five years in the domestic market. Additionally, with the higher crude prices more investments are expected in the hydrocarbons sector globally, including LNG. We are implementing major capex to enhance our manufacturing capabilities in order to tap the top end process equipment requirements that are expected to come up.

 

What is the present status of critical process equipment industry in India?

This sector is seeing a revival of sorts on the back of robust PSU and private investments in refining, petrochemical and fertilisers sectors. Last 6-7 years had been tough because of sluggish demand and practically no full scale projects except Reliance Jamnagar Phase III.

 

What are the challenges before Indian process equipment industry? How can we overcome them?

The challenge is to revive the interest of the young graduates in this business. The perception of engineering business as one with challenging manufacturing conditions is something that takes away from the attractiveness of this business as far as freshers are concerned. Our challenge is to effectively reach out to these engineers and updating them on two major aspects of this business.

 

Firstly, the vast multitudes of consumers who directly benefit from the sectors that we serve and secondly the advancements in manufacturing technology over the last two decades with a lot of automation and state of the art equipment being deployed on the shop floors. Another tough challenge for heavy engineering businesses in India remains sourcing sophisticated materials particularly special steels and alloys which has to be imported, as bulk of the steel manufactured in India still caters to the auto and construction sectors. 

 

What are the emerging trends in process equipment industry - globally & in India?

Heavy engineering businesses just as any other business is witnessing a huge surge of technology assimilation in all aspects including design, manufacturing, quality control and project management. Connectivity facilitates data transfer and that speeds up identifying bottlenecks in a project and facilitates prompt decision making.

 

One of the critical success factors in our business is on-time deliveries of our equipment which in turn depends on availability of engineering drawings, raw materials and inspection in a timely manner. A better control on all these through connectivity ensuring real time updates has a direct positive impact on optimising our product manufacturing cycles.

 

Automation and IoT are creating a buzz across process industries. Is process equipment industry in India ready to adopt these technologies? 

Heavy engineering businesses just as any other business are seeing a huge surge of technology assimilation in all aspects including design, manufacturing, quality control and project management. Connectivity facilitates data transfer and that speeds up identifying bottlenecks in a project and facilitates prompt decision making. 

 

How is Anup Engineering adopting automation in its manufacturing processes? 

One of the critical success factors in our business is on-time deliveries of our equipment which in turn depends on availability of engineering drawings, raw materials and inspection in a timely manner. A better control on all these through connectivity ensuring real time updates has a direct positive impact on optimising our product manufacturing cycles.

 

Are you looking at expanding your capacity or investing in new plant? If yes, please elaborate

We are augmenting our engineering teams in various functions to successfully live up to the challenging expectations of our customers and the growing criticality/complexities of the product range being targeted by us. Over the next couple of years, we will consolidate our leadership position in the shell & tubes exchangers within the country and will emerge as one of the leading suppliers to the global customers 

and markets.

 

Most of the building blocks for the next phase of growth at Anup are in place. On the infrastructure front, we are ready to cater to the upcoming/ongoing projects in the Indian refineries, petrochemicals and fertiliser sectors. Currently, we are bidding for several opportunities. 

 

What are your growth plans for the company?

Anup has been growing at a steady clip over the last 5 years and has delivered its best performance in FY18. The cornerstones for this success have been it’s exceptional on-time delivery track record which has ensured repeat business and a continual shift towards a more challenging, higher end product mix. We intend to continue to focus on these strengths and reach out to more markets internationally to better tap the increasing opportunities. Capacity augmentation & infrastructure upgradation is already under full-fledged implementation at the current facility in Ahmedabad and the company is also looking to develop another facility to augment its manufacturing capacity.