Manufacturing Equipment

 NEW DELHI: In what could be a direct challenge to BHEL, the state-run monopoly in the power equipment space, Reliance Power is set to enter the sector in collaboration with the $7-billion global major Shanghai Electric to manufacture boilers, turbine and generators. The proposed manufacturing unit would involve a total investment of about $3 billion and is proposed to be in place by 2010.

The Chinese company has an annual manufacturing capacity of 35,000 mw, more than triple of BHEL’s capacity. To put things in perspective, India added generation capacity of about 21,000 mw during 2002-07. The 50:50 joint venture is being set up to cater to the growing domestic demand and neighbouring markets. Shanghai Electric has acquired technology from Alstom and Siemens for its boiler, turbine and generator facilities. The company was the turnkey contractor for the Anil Ambani group firm’s Yamunanagar power project.

The two companies have signed an agreement and are expected to finalise the terms and contours of the JV within six months. The two companies are in discussions to finalise the location for the plant, which is likely to be set up near Krishnapatnam in Andhra Pradesh on the eastern coast, where Reliance is setting up its second ultra mega power project.
Sources in the know of the development said the plant is likely to have annual manufacturing capacity of 10,000 mw to start with.

Reliance’s foray into equipment manufacturing is a part of its backward integration plans in the energy space. The company is setting up two ultra mega projects, apart from a 1,000 mw thermal power plant at Rosa, Uttar Pradesh.

Reliance’s move comes at a time when several private firms are setting up manufacturing facilities to keep pace with the capacity addition plans. Larsen & Toubro and JSW are among the few who have tied up with global players to set up equipment facilities. Lack of manufacturing capacity has been identified as one of the major factors leading to the power shortages. The entry of private players will pose a serious threat to BHEL, which has been the dominant player in the market.

Industry analysts say India would require to ramp up its equipment manufacturing facilities by another 10,000-15,000 megawatt annually if it has to keep pace with the planned generation capacity programme.

Article Resource:http://economictimes.indiatimes.com/News_by_Industry/Chinese_co_to_power_RPL_plan/articleshow/3272010.cms

For semiconductor fabrication equipment manufacturers, systems that make solar cells are an excellent market for diversification, particularly during the current slow down in other areas of semiconductor manufacture. While up to now European plants have been able to attract manufacturing with industrial commitments and favourable energy policies, recently, like so many other manufacturing industries, business is moving to the east.

Applied Materials, the world’s largest semiconductor manufacturing equipment supplier, took over several photovoltaics specialists in 2007. One of them was a Sunfab Centre in Alzenau, Germany, where for some time, the firm has been operating a plant for process engineering and coating technology. Now, part of solar production is to be moved to a new location in Taiwan, along with other corporate divisions in the energy sector currently located in Silicon Valley.

CEO Michael Splinter explained last week during Semicon West, lower staff costs were not the reason for the move to Asia. Indeed, Splinter said he was also very pleased with Germany’s support for renewable’s, both from the viewpoint of manufacturers and operators of solar cells. Rather, he said that Asia is becoming an important market for Applied now that Indian solar panel companies, originally producing exclusively in Germany, have shifted their manufacturing to Asia. He pointed out that two new US manufacturers of photovoltaic systems, First Solar and Sunpower, also operate plants in Asia. Recently, Applied set up a second headquarters in Singapore to control their Asian operations.