Project Concept 3
Market Potential 5
Growth Drivers 6
Gujarat Competitive Advantage 7
Project Information 9
- Location/ Size
- Infrastructure Availability/ Connectivity
- Raw Material/ Manpower
- Key Players/ Machinery Suppliers
- Potential collaboration opportunities
- Key Notes
Project Financials 15
Approvals & Incentives 17
Page 2
Project Concept
Transmission Distribution
Generation equipment
equipment equipment
Transformers Switchgears
Boilers
Transmission Control panels
Turbines
line towers Capacitors
Generator
Conductors Wires and cables
Page 3
Project Concept
Project overview
The proposed project involves the establishment of a facility for manufacturing of capacitors,
switchgear and control panel at Dahej Industrial Estate, Bharuch District
The proposed facility will have three main manufacturing processes, namely, Switchgear &
control gear manufacturing, and Capacitor Manufacturing process
The key equipment required for switchgear and control gear manufacturing include LVD laser
cutting machine, turret punching machine, gasket forming machine, metal bending machine,
etc.
Key equipment required for capacitor manufacturing process include capacitor winding
machine, lead welding machine, and box encapsulation machines
The total project cost of setting up the facility and control panel manufacturing facility is
estimated to be ~INR 1350 million
The demand for the facility will be met by the significant capacity addition requirements in the
State and overall country. The expected growth in electricity generation capacity (GW) is likely
to grow at a CAGR of 7.8% between 2016-25
A strong local demand will also produce significant demand for T&D equipment
Page 4
Market Potential
Global switchgear and control gear (panel), and capacitor markets expected to grow
at CAGRs of 6.1% (2014-19) and 5.1% (2015-20), respectively
Global switchgear and Global capacitors market size
control gear market size (USD billion)
(USD billion) CAGR:
5.1%
24.2
CAGR: 53.8 CAGR:
6.1% 3.2%
18.8
42.1 16.1
40.0
Asia Pacific is the largest switchgear and control gear market and is expected to rise strongly
owing to large investments in the power sector during 20162019.
Increasing electrification in developing countries of this region will boost demand.
Growing demand for consumer electronics and the rising significance of capacitors in electronics
manufacturing is likely to drive the capacitors market to ~USD24 billion by 2020.
Indian switchgear and capacitor markets to witness robust CAGRs of 19.2% and
29.2%, respectively, during FY15-22
450
CAGR: 8.2 CAGR:
19.2% 29.2%
4.4
150
2.4
75
Page 5
Growth Drivers
93.0 Growth:
88.5 CAGR:
78.7 6.6% 4.0%
45.9 400
43.1
280
41.3
10th FYP 11th FYP 12th FYP 13th FYP 11th FYP 12th FYP FY16 FY22F
Source: Indian Electrical & Electronics Manufacturers Association
Large-scale planned investments and installed capacity addition of ~220 GW during (FY16-22)
will drive demand for switchgear and control gears in India to ~USD8.2 billion by FY22.
Robust demand for consumer electronics and durables will drive the capacitors
market
Indian electronics Indian consumer durables
market (USD billion) market (USD billion)
Page 6
Gujarat - Competitive
Advantage
Strong local demand
CAGR:
9.2%
31,000 CAGR: 19,000
29,040 47.6%
18,270
4,000
Significant increase in Gujarats power generation and transmission capacities will generate
robust demand for switchgear and control panels, which are primarily used at sub-stations for
power distribution.
Moreover, higher focus on energy efficiency and increased capacitor usage in various devices
will drive demand for capacitors.
Key proposed power generation projects include a 4,000 MW Mundra ultra mega power plant
and a 2,640 MW Mundra thermal power plant.
Transmission
4.6
and distribution
~USD22.8 for billion1
power capacity additions Generation 18.2
The Blueprint for Infrastructure in Gujarat
2020 (BIG 2020) an integrated plan for
Infrastructure development envisages an The Government of Gujarat intends to
investment of USD22.8 billion (INR151,735 invest USD4.6 billion (INR30,670 crore) in
crore) in power sector. transmission and distribution by 2020.
Source:
Review of Blueprint for Infrastructure in Gujarat (BIG 2020) Final Report Volume 1 Summary and Vision (August 2009), accessed
via http://www.gidb.org/Document/2014-12-31_112.pdf
Manufacturing Sector Profile, (January 2013), http://www.rubberking.net/images/pdf/Manufacturing%20Sector%20Profile.pdf
Page 7
Gujarat - Competitive
Advantage
High availability of skilled manpower (engineers)
Engineering seats in Gujarat by As of June 2016, Gujarat had ~126
specialisation (Academic year 2014-15) undergraduate engineering colleges and ~70 post
graduate engineering colleges with intakes of
Mechanical 23% ~68,447 and ~6,694 students per year,
respectively.
Computer 17%
More than 80% of the seats were in self-financed
Electronics &
Communication 17% private colleges, while 15% seats were in
Government colleges.
Civil 14%
Leading engineering colleges in Gujarat:
Electrical 13% Indian Institute of Technology (IIT), Gandhinagar
Other advantages
Ease of Doing Business
Only state which comply 100% with environmental procedures.
Gujarat fares highly when it comes to setting up a business, allotment of land and
obtaining a construction permit.
Flourishing Economy
Gujarat contributes 7.31% of the Nation GDP in 2015 and shows leadership in many
areas of manufacturing and infrastructure sectors.
Gujarats SDP (State Domestic Product) at current price registered a growth of 11%
during the year 2014-15.
Note: 1) The process depicted is illustrative and may involve further sub-steps and other processes as well
Source:
SMBE electric company website: http://www.smbelectric.com/our-capabilities/manufacturing-process/
Page 9
Project Information
Carrier film
Printed electrodes
7. Terminal
5. Cutting and 6. Sintering/ 8. Testing and
electrode dipping
chip formation Firing packaging
and plating
The bar is cut into The parts are fired in Each terminal of the The parts are tested
separate capacitors kilns with slow moving capacitor is dipped in and sorted to their
as per the specified conveyor belts. electrode ink and the correct capacitance
sizes. After sintering, the parts are fired in kilns. tolerances.
capacitors become After this capacitors are They are then
hard ceramic. plated with a layer of packaged on tape
nickel and then a layer and reel and are
of tin. shipped.
Terminal
electrode
dipping
Terminal
firing and
plating
Page 10
Project Information
Why Dahej?
Dahej Industrial Estates I, II, III form part of the Gujarat Petroleum Chemical Petrochemical
SIR located in Bharuch
Bharuch is a formidable industrial base in sectors as diversified as chemicals & petrochemicals,
textiles, drugs and pharmaceuticals.
The Industrial Estates and the GPCPSIR fall within the proposed Delhi Mumbai Industrial
Corridor (DMIC)
Dahej I: Dahej II: Dahej III
Scale of Industries Scale of Industries Scale of Industries -
Large Industries Large & Medium Large Industries
Type of Industries
Type of Industries -
Industries Chemical &
Chemical & Type of Industries Petrochemical
Petrochemical Industries Chemical & Petrochemical Industries
Major Industries Industries Major Industries
Petronet LNG, Gujarat Major Industries Indofil ATC Tyres Pvt. Ltd.,
Alkalies and Chemicals Viswaat Chemicals Ltd.
Industries, Gujarat
Limited, ONGC Petro Adani Power Ltd.,
Flurochemical Ltd., Riddhi Siddhi Ltd. etc
Additions Limited
Page 11
Infrastructure
Availability
Logistics & Connectivity
Rail Road
Savli has access to broad gauge railway Connected to National Highway 8 (NH 8)
network from the following railway and National Expressway 1 (NE 1) through 4
stations: lane State Highway No 87
Vadodara railway station: 17 Km SH 158 connects Savli to Vadodara.
Ahmedabad railway station: 110 Km
Air Port
Utility
Water Power
Gas
Gujarat State Petroleum Corporation (GSPC) is the gas supplier to the site through a well
established pipeline.
The company needs to directly apply for gas to GSPC.
Source:
Government of India Ministry of MSME District Industrial Potential Survey Report of Vadodara District, MSME Development Institute
(December 2014)
Page 12
Project Information
Key players
Switchgears and control gears market
Player Plant location Key products
Low voltage, medium voltage and high voltage
switchgears
Vadodra, Gujarat Air-insulated switchgears
ABB Limited
Nashik, Maharashtra Gas-insulated switchgears
Railway switchgear
Wind switchgear
Low voltage switchgear and busbar trunking
systems
Verna, Goa
Siemens India Medium voltage gas-insulated switchgears
Aurangabad, Maharashtra
Primary distribution switchgears
Switchgear spare parts
Vadodra, Gujarat Primary switchgear
Schneider
Nasik, Maharashtra Secondary switchgear
Electric India
Hyderabad, Telangana Switchgear components
Vadodara, Gujarat Air circuit breakers
L&T Electrical Ahmednagar, Control panel accessories
& Automation Maharashtra Final Distribution Products (MCB, RCCB,
Coimbatore, Tamil Nadu RCBO, DBs)
Capacitors market
Player Plant location Key products
Aluminium electrolytic capacitors
Bawal, Haryana
EPCOS India Ceramic capacitors
Nashik, Maharashtra
(TDK Film capacitors
Kalyani, West
Corporation) Components for power factor correction power
Bengal
capacitors
Polyester film capacitors
Deki
Noida, Uttar Pradesh Mixed dielectric film capacitor
Electronics
Polypropylene film capacitors
EMI suppression capacitors
General purpose capacitors
Desai Power electronics capacitors
Pune, Maharashtra
Electronics High voltage capacitors
Automobile capacitors
Energy meter capacitors
Source:
http://www.tradeindia.com/Seller-1520540-FILCON-ELECTRONICS-PRIVATE-LIMITED/
http://www.abb.co.in/references/default.aspx?db=db/db0004/db001502&c=517c501b84d3ddebc1257582004bddaf&att=Country&value=India
http://www.schneider-electric.co.in/sites/india/en/company/profile/in-brief/manufacturing-plants.page
http://www.larsentoubro.com/electrical-automation/products-services/products/
http://www.prnewswire.com/news-releases/india-electrical-capacitor-market-to-grow-at-36-until-2019-says-techsci-research-272272931.html
Page 13
Project Information
Key Considerations
Non-standard ratings
Ratings of electrical equipment are not standardised and all utilities follow
their own standard ratings.
To meet their requirements, manufacturers have to constantly modify the
design and spend resources in redesigning, etc. moreover, testing of
such electrical equipment is also time consuming and costly.
Source:
IEEMA-Annual-Report 2014-15 IEEMA (September 2015), http://ieema.org/wp-content/uploads/2015/09/IEEMA-Annual-Report_2014-
15.pdf
On A Threshold Of Transformation - Indias Transformer Industry, Electrical India (July 2015), accessed via,
http://www.electricalindia.in/blog/post/id/5624/on-a-threshold-of-transformation-indias-transformer-industry
Page 14
Project Financials
Page 15
Project Financials
Manpower requirements
Overall manpower required: 400-500 persons
10,000 sq mt switchgear and control gear/panel facility: 150-200 persons
200 million per year capacitors facility: 250-300 persons
Page 16
Approvals &
Incentives
Gujarat Industrial Policy 2015
Government of Gujarat has announced an ambitious Industrial Policy, in January 2015, with the
objective of creating a healthy and conducive climate for conducting business and augmenting the
industrial development of the state.
Quantum of incentives
The incentives under this policy will be available to all the Talukas listed in Government Resolution
dated 25/7/2016 except areas falling within municipal corporations.
% of eligible fixed
Category of % of Net VAT % of Net VAT to be
capital investment Incentive period
Project Location reimbursement to paid to
entitled for (no. of years)
(Taluka) the unit Government
Incentive
1 100 90 10 10
2 80 80 20 10
3 70 70 30 10
Net VAT incentives
Net VAT incentive will be reimbursed to the industrial undertaking in one financial year will not
exceed one-tenth of the total amount of eligible incentive.
Classification of the Project Amount (in INR crore)
Ultra Mega Industrial Unit 500
Mega industrial Unit 400
Large Industrial Unit 150
Micro, Small or Medium Industrial Unit 50
Industries in the Sector can opt for either the general incentives under the Gujarat
Industrial Policy- 2015 or the incentives provided below if the proposed plant is an MSME
(i.e. Plant and Machinery cost is less than INR 10 crore): :
As per the Gujarat Industrial Policy-2015, following are the key incentives provided to the
manufacturing sector (including switchgear, control gear/panel and capacitors manufacturing):
Interest subsidy of 5% with the maximum amount of INR 25 lakhs (~USD 37,5001) per annum
for 5 years on the term loan of machinery and equipment for plants set up within municipal
corporation areas.
Interest subsidy of 7% with the maximum amount of INR 25 lakhs (~USD 37,5001) per annum
for 5 years on the term loan of machinery and equipment for plants set up outside municipal
corporation areas.
Capital investment subsidy of 10 % loan amount disbursed by Bank/Financial Institution with a
maximum amount of INR 15 lakhs in Municipal Corporations areas.
Page 17
Approvals &
Incentives
Indicative List of Approvals
Approvals/clearance required Department to be approached and consulted
Incorporation of company Registrar of companies
Registration/Industrial license Secretariat if industrial assistance (SIA) for large and medium
scale industries
Allotment of land State industrial development corporation
No objection certificate (NOC) under air State pollution control board
and water pollution control acts
Approval of construction and country Town and country planning
planning Municipal and local authorities
Chief inspector of factories
Pollution control board
Electricity board
Finance For loans higher than INR 1.5 crore, all India financial institutions
like Industrial Development Bank of India(IDBI), Industrial Credit
and Investment Corporation of India(ICICI), Industrial Finance
Corporation of India(IFCI) etc.
Registration under state sales tax act Sales tax department
and Central and State excise act Central and state excise department
Code number for export and import Regional office of director general of foreign trade
Hazardous waste import and export Ministry of environment, forest and climate change
approval
Exiting business Ministry of corporate affairs
Government of Gujrat has introduced single window facilitation portal for investors providing
undermentioned benefits:
Centralized system to monitor applications.
User friendly and simplified application process for investors.
System for authorities and investors to check the status of applications.
Increased departmental ownership.
The unit shall be facilitated through Investor Facilitation Portal for obtaining all the
necessary state approvals/ clearances - https://www.ifpgujarat.gov.in
Source
Gujarat Textile Policy, Industries and Mines Department, Government of Gujarat, 5 September 2012
Approvals required for setting up plant,
http://dipp.nic.in/English/Investor/Investers_Gudlines/approval_clearances_required_for_new_projects.pdf, accessed 8 July 2016
Environment clearance http://envfor.nic.in/major-initiatives/environmental-clearances, accessed 8 July 2016
Gujarat single window clearance, https://www.ifpgujarat.gov.in/portal/jsp/aboutUs.jsp, accessed 8 July 2016
Exiting business, http://www.mca.gov.in/MinistryV2/CloseCompany.html, accessed 9 July 2016
Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014
Industries Commissionerate website, http://ic.gujarat.gov.in/?page_id=3175, accessed on 1 June 2016
Textile industry welcomes amended TUFS, Business Standard, 2 January 2016
Approvals http://dipp.nic.in/English/Investor/Investers_Gudlines/FAQ_GrantIndustrialLicence.pdf, accessed 27 June 2016
List of defence equipment requiring industrial license, http://dipp.nic.in/English/acts_rules/Press_Notes/pn3_2014.pdf
Page 18
Industries & Mines Department
www.imd-gujarat.gov.in
This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.