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Energy efficiency is a prominent trend in the EPC industry
Interviews- Oct 31,23
In this interview with Rakesh Rao, AK Tyagi, CMD, Nuberg Engineering Ltd (Nuberg EPC), explains the present status of EPC market and key growth drivers
Nuberg Engineering Ltd (Nuberg EPC), a global EPC (Engineering, Procurement, and Construction) firm, offers single point responsibility solutions and services for engineering and construction of industrial plants, from concept to commissioning. With over 25 years of experience, the company has delivered more than 60 turnkey projects in more than 32 countries. Under the leadership of AK Tyagi, the company has been instrumental in driving the EPC industry forward, particularly in the process industry. In this interview with Rakesh Rao, AK Tyagi, CMD, Nuberg Engineering Ltd, explains the present status of EPC market and the key growth drivers.
How is the EPC market at present? Which industrial segments are driving demands?
The Indian EPC market is experiencing substantial growth, with a projected CAGR of over 3 per cent from 2020 to 2025. This growth is primarily driven by increased industrial activities and government initiatives to enhance electricity access. Conventional thermal power, representing 62.2 per cent of the nation's energy capacity, is expected to dominate the power EPC market, supported by rising industrialization and urbanization as well as government programs like "Power for All”.
In terms of industrial demand, conventional thermal power plants, especially coal-fired ones, are at the forefront, constituting 72.97 per cent of India's energy production. Nevertheless, the adoption of advanced technologies, such as supercritical and ultra-supercritical coal power plants, alongside government efforts to boost renewable energy, will open up new opportunities in the Indian power EPC market.
The Indian government has committed to spending $1.4 trillion on infrastructure development over the next 25 years. This includes investments in roads, bridges, mass transportation, power, telecom, health, sanitation, and education. The government's initiatives have resulted in an all-time high pace of road construction in India. Additional initiatives also involve India's commitment to achieve Net-Zero greenhouse gas emissions by 2070. This pledge is expected to have a substantial economic effect, with estimates exceeding $1 trillion by 2030 and a remarkable $15 trillion by 2070. As part of these efforts, Nuberg EPC has successfully introduced India's first large-scale PSA (Pressure Swing Adsorption) facility and a hydrogen compressor storage and dispensing setup for IOCL. This advancement provides an eco-friendly alternative to conventional petrol and diesel vehicles.
Expressway development is crucial for national progress. The Finance Minister's budget prioritises infrastructure, while the Gati Shakti Mission enhances transport infrastructure. The government and EPC industry need to attract engineering talent for capital-intensive projects.
Projects like the Mumbai-Nagpur Samruddhi Expressway improve regional connectivity. Connecting all 36 districts of Maharashtra through 5,000 km of expressways over two decades is another significant move for the state's economy.
In the renewable energy sector, India is expected to reach 15,820 TWh by 2040, and renewable energy is set to play an important role. This expansion will draw investments into renewable energy in the country, which will, in turn, help boost the power EPC market in India in the coming years. Nuberg EPC is actively engaged in global projects involving various hydrogen types (green, grey, and blue), 2G and 3G ethanol, water electrolysis, water-soluble fertilisers, and next-gen nutrients. Its current focus is on creating cost-competitive solutions for fuel cell systems and bioethanol.
What are some of the key concerns of the process industries today? And, as an EPC firm, how is the company helping its customers to solve some of these problems?
Risk management remains a paramount challenge in our industry, where balancing risk between customers and EPC contractors can be complex. Fixed-price agreements often create a risk imbalance, particularly with large and intricate projects, skilled labor competition, and industry consolidation.
Efficient project management is another area of concern, with many EPC firms grappling with schedule and budget management issues. Poor project management can lead to delays, cost overruns, and rework, impacting profitability. It's worth noting that some project management tools may fall short in providing accurate project progress calculations and comparative analysis with project baselines.
Lastly, sustainability and emissions reduction are pressing issues, necessitating improved asset management, process control, capacity enhancement, and predictive maintenance to meet emission reduction targets.
NUBERG EPC can play a crucial role in mitigating these challenges. To address risk management, we can prioritize project selectivity over revenue growth, adopting enhanced pursuit and bid approval processes to better manage fixed-price contracts and complex projects.
Regarding project management efficiency, we recognise the limitations of existing tools and can work towards developing custom solutions or integrating additional tools to improve efficiency and provide accurate progress tracking and comparative analysis with project baselines.
In terms of sustainability and emissions reduction, we are committed to developing innovative, sustainable solutions for our clients. Our focus is on sustainable designs, CAPEX optimisation, faster time to market, and operational excellence solutions to enhance design, operations, and maintenance services. Our aim is to help our clients navigate these challenges effectively while promoting sustainability and profitability.
What are key challenges today before EPC players catering to the process industry?
EPC players in the process industry face several key challenges, including cost control and profitability, risk management, project delivery, project overruns, and workforce training. Cost control and profitability are vital for winning and executing projects successfully. Onshore EPC companies are shifting away from lump-sum EPC contracts to manage risk effectively. Project overruns are a significant concern, with 16 per cent of projects exceeding costs by more than 10 per cent, and 2.5 per cent exceeding costs by over 20 per cent. Workforce training remains a challenge, with a need for advanced training in industrial processes and leadership.
At Nuberg EPC, we are dedicated to sustainability, focusing on quality, safety, and efficiency in our operations. Our projects prioritise environmental impact, using energy-efficient materials and water conservation measures. We prioritize safety through rigorous training and safety protocols, ensuring a secure work environment while maintaining operational efficiency. We actively employ sustainable supply chain practices, recycled materials, and eco-conscious suppliers.
Nuberg EPC has been instrumental in driving the EPC industry forward, particularly in the process industry. The company has been recognised for its commitment to sustainability, quality, safety, and efficiency in its operations. It has been involved in numerous projects, from setting up India's first hydrogen fuel station to executing a major bio-ethanol plant project in Panipat for Indian Oil Corporation Limited.
We have also been a significant contributor to the government's "Aatma Nirbhar" concept, which aims to make India self-reliant in terms of energy production and consumption. The company's work in setting up India's first hydrogen fuel station and a major bio-ethanol plant project is a testament to its commitment to sustainable energy solutions and the country's vision of becoming a self-reliant nation.
In terms of green hydrogen, Nuberg EPC is committed to supporting the National Green Hydrogen Mission (NGHM) by providing cost-effective, efficient, and sustainable solutions for green hydrogen production and utilization. The company believes that Hydrogen is a key enabler for India’s renewable energy mission as it can provide clean, reliable, and versatile energy solutions for various sectors.
Also, we have been recognised as a trusted global EPC and LSTK organization in the market, having delivered over 60 turnkey projects in 30+ countries. The company's robust team guarantees successful projects, and it has developed the habit of setting and improving benchmarks in the industry. Nuberg EPC's core engineering talent is its biggest strength, and it has a healthy pipeline of projects.
Could you please elaborate on some of the emerging trends in the EPC industry?
I would like to elaborate on some key developments. First and foremost, energy efficiency is a prominent trend that the industry is increasingly embracing. This focus on energy efficiency includes adopting processes and solutions that not only align with new regulatory norms but also prioritize sustainability. Another significant trend in the EPC industry is the adoption of smart manufacturing. This entails leveraging advanced technologies to enhance the efficiency and productivity of manufacturing processes. Digital technology plays a crucial role in this aspect, enabling improved collaboration, enhanced value chain control, and data-driven decision-making.
Renewable energy is also gaining traction within the industry, with a notable shift towards sources like solar, wind, and biomass for power generation. The continuous improvement of renewable energy technology is driving the development of more powerful and adaptable solutions.
Additionally, industrial electrification is on the rise, marking a transition from fossil fuels to electricity in industrial processes. This shift is motivated by the need to address climate change and presents significant value-creation opportunities in the electrification value chain.
The exploration of emerging technologies, such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT), is another key trend. These technologies have the potential to streamline construction, enhance design and quality control, and facilitate data-driven decision-making.
Moreover, the EPC industry is actively addressing the challenge of compliance with new regulatory norms, encompassing environmental regulations, safety standards, and other requirements. Adapting to these changes and finding innovative ways to meet these regulations are paramount for the industry's future.
At Nuberg EPC, we are proud to lead in the realm of digital and remote plant management. Our expertise in digital technology allows for remote plant management, reducing the need for on-site staff and enhancing safety measures. We also invest in automation, which significantly improves project cost estimation and design accuracy.
Furthermore, we have introduced skid-mounted technology to the Indian EPC market, as exemplified in our successful IOCL project. Skid-mounted technology expedites plant assembly, reduces downtime during expansion, and offers cost and mobility advantages, all while maintaining the highest standards of quality, safety, and efficiency. These trends are shaping the future of the EPC industry and present both challenges and opportunities for us to explore and excel at.
What are your growth plans?
Our ambitious growth plans encompass several key areas - from green energy to technology. Our path to success has been marked by groundbreaking international projects that have established our reputation in the industry. But now, we are shifting our focus to our home country, India, aligning with the vision of ‘Aatma Nirbhar’ (self-reliance).
Over the years, we have ventured into various sectors, offering comprehensive services ranging from process design to construction and maintenance. Expanding our global footprint has been a crucial part of our growth strategy. As the world's leading EPC company for calcium chloride and hydrogen peroxide, and the world's number 2 EPC company for chlor-alkali, we have left a significant mark on the international stage.
In response to the changing global landscape, especially in the wake of the COVID-19 pandemic, we have adapted our strategy to focus on India through new products focusing on a new geography with a new technology like SMR (Steam Methane Reforming) hydrogen. At Nuberg EPC, we have received multiple prestigious awards from IOCL (Indian Oil Corporation Limited), including the PPU (Propylene Purification Unit), a 400 TPD SRU (Sulphur Recovery Unit) project, and the bio-ethanol plant project in Panipat, showcasing our proficiency in handling complex oil and gas projects while upholding the highest standards of quality, safety, and efficiency. Also, we have achieved India's first commercial-scale hydrogen compressor and fueling station. These accolades reflect our commitment to sustainable energy solutions and India's vision of self-reliance.
Our commitment to the development of green energy projects aligns perfectly with India's Renewable Energy Mission and its aspiration for a sustainable, low-carbon energy future. We have secured contracts for critical projects like the NPK fertiliser plant.
But our journey doesn't stop there. We are determined to expand our offerings and diversify our portfolio. Nuberg EPC has a proven track record of successfully delivering turnkey projects in various industries, including chemicals & fertilizers, hydrocarbon, green energy, steel, and nuclear & defence. Our consistent success in winning projects, such as the sulfuric acid plants in Egypt and Ethiopia, highlights our expertise in this sector and our capacity to handle challenging projects. As we look to the future, I remain dedicated to extending our reach, enhancing our portfolio, and contributing to India's growth and sustainability objectives. I am excited about the journey ahead and the opportunities that lie on our path to a self-reliant and prosperous India.
Nuberg EPC
AK Tyagi
EPC
Engineering
Procurement
and Construction
project management
chemicals
fertilizers
hydrocarbon
green energy
hydrogen
process equipment
Nuberg Engineering
chemical plant
Indian Oil Corp
Rakesh Rao
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