Conrad Latham, General Manager, Compressor Technique, Atlas Copco India
What is your analysis of the air compressor market in India? Where do you think Atlas Copco stands in the Indian market?
The air compressor market is very much driven by the manufacturing industry of a country. If the manufacturing is growing, then the compressor market will grow. At the moment, we are seeing positive growth for us due to the strong manufacturing growth in 2018. There are some specific areas that are also helping. For example, growth in infrastructure projects means that industries like steel, glass and cement are investing and these are all segments where compressed air is needed.
We have been present in India for nearly 60 years and as such has a strong market presence across all parts of India. As there are no independent statistics on market share it is not possible to provide the exact percentage share, but we are certainly a market leader.
How would you compare India's air compressor market vis-à-vis global air compressor market?
The India market is a dynamic market that is seeing changes based on the drive to grow manufacturing and implement the ‘Make in India' initiative. The major challenge comes as India manufacturing needs to compete with other countries if it wants to really realize the true opportunities. Another major difference between India market versus the global market is the price sensitivity of the Indian market. Global players are seeing that to be competitive in India they need to provide products that represent their brand promises of quality and reliability but at prices accepted in the market. There are companies that are willing to pay for the value of options that are normally associated with improved energy efficiency like variable speed drive compressors, permanent magnetic motors, cost effective adsorption dryers, energy efficient piping systems or even higher IE rated motors.
Tell us about the recent trends, challenges and opportunities in this industry. How are you responding to these?
The overall trend in compressors is positive. India is a growth market for us and as the Government focuses on increasing the GDP from manufacturing, it is expected to continue to be a growth segment. Challenges have been seen following a slowdown in large projects after GST implementation in 2017, but these started to recover in 2018 with solid investment coming from steel, cement, chemical and glass segments.
We are focussed to maximize customers' productivity by reducing the energy used in compressors. This requires us to listen to their growth plans, understand their challenges and come with solutions that will help them in all areas of energy saving. This is a very motivating challenge as it works closely with the Government's drive for energy efficiency across India.
How important is the India market for you when it comes to the air Compressor business?
Presently, India is a very important growing market for compressors in the Atlas Copco Group. This growth is important to our Group but also to India as it means we are investing in more and more people especially in our sales and service operations but also in our Global Engineering centre at Pune.
Tell us about your air compressor manufacturing capabilities and capacities in India.
Atlas Copco India has two manufacturing factories which are both based in Pune, Maharashtra. Our original factory was opened in 1960 and in 2011 we added our Chakan facility to cope with the increase in demand. Both these factories are making products predominately for Indian customers, but both are also exporting products to global customers as well as sending Indian made components to our European factories for final assembly.
There are plans to grow more with both domestic and export demands driving further investments.
Recently, our Chakan plant opened its solar panel power supply and 85 percent of the electricity we use for manufacturing and testing is provided by these solar panels.
How's been the last one year for Atlas Copco's air compressor business in India as well as globally?
Both globally and locally the demand for compressors and compressed air systems has grown. This is being driven due to the increased demand in manufacturing and infrastructure developments.
Which industry sectors are driving the growth for your air compressor business in India?
One important strategy that we adopt is to have a very diverse customer base. We are seeing growth in most segments across India, but a few are growing more than others. Segments that serve the infrastructure growth are certainly seeing faster growth than others. For example, the tire manufacturers have invested strongly driven by the demand for dumpers and loaders. Other companies have invested to improve their competitive advantage, i.e. the textile segment has invested a lot in energy saving projects to reduce their overall energy usage. The chemical and glass markets are similar as they have updated plants to reduce their compressed air energy bills.
What strategy are you adopting to build on this growth?
We focus heavily on training our sales teams to listen to the customers' needs and understand their requirements. We invest heavily in training all our employees on our products and how they can improve our customers' productivity. We know that the service support to our customers is a major factor in why they chose us and as such we have grown our service teams enormously in the last five years. It is more than 300 people strong and with our indirect service teams from our dealers we have more than 800 service engineers available to support our customers 24/7. We will continue to train and grow these teams to always understand how they can improve the energy efficiency of our customers.
Tell us about some of the technological advancements and innovations that you are offering to help you customers vis-à-vis other players in the market?
Compressor technology undergoes regular innovation and the drive to reduce the energy bills of our customers is the main force behind a lot of the innovation. Some of the big changes are the move from fixed speed compressors to variable speed compressors, that use only as much energy as required from the varying demand of the customer's application. Recent changes have seen new designs in the compression process of the oil-free screw compressors. We have invested a lot of money in Computational Fluid Dynamics calculations to truly understand the detailed flow patterns of air as it moves through a compressor and has used its years of experience, test data and production statistics to highly refine the air and cooling medium channels in a compressor to drastically reduce pressure drops thereby improving the energy efficiency of the compressors it develops.
A lot of innovation is taking place with Industry 4.0 and We have developed the Smartlink system, where it connects the compressors and dryers to a centralized data warehouse. From here, it can provide a huge amount of running data to improve uptime reliability for its customers as well as energy optimization solutions. The latest central compressed air room controller, Optimizer 4.0, is a great development in innovation, again driven by the desire to reduce customers' energy usage. This unique controller can centrally optimize multiple compressors and dryers of different technologies as well as different compressor manufacturers.
It is not only in compressors and software that developments are taking place. Compressed air dryers are also a great area of energy saving and recently we launched the world's first rotary drum dryer that guarantees -40-degree C pressure dew point. This is a compressed air dryer that uses almost no electricity to provide compressed air at a very high quality. Normally such systems would cost customers more than 11 lakhs in electricity per year, and now we can provide a solution that is almost free to operate. This is real innovation.
What is your outlook for the next one year for the air compressor business in India?
Our expectancy is positive. We believe that with the government being re-elected, the focus will remain on growth in manufacturing. With this growth, we expect a growth in compressor and compressed air systems sales. We know that many companies in India now demand more efficient products and understand that energy savings in compressors will bring their overall energy costs down. We will continue to invest in new products and will launch several products in July this year that are made specifically for the Indian market and with these we expect a good growth.
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