#INOXGroup's Director Siddharth Jain talks about company's recent investment of $3 billion for Green Ammonia Project in Maharashtra and more.
Watch him in conversation with Niraj Shah at #Davos.
Read all #WEF2024 updates: https://bit.ly/420ODMW
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TVTranscript
00:00 Well, on the sidelines of the WEF, we are in conversation with Siddharth Jain.
00:03 He's a regular feature at Davos for, I think, multiple meetings.
00:07 And lovely to understand from him if he believes the India fervor is as strong as last year or stronger.
00:13 And what within all of this are the opportunities that the INOX group is seeking as well.
00:19 Siddharth, great having you. Thanks for taking the time out.
00:21 Nice to have you with me.
00:22 So, I've seen a palpable buzz much like the last time.
00:26 Maybe even stronger and maybe more on the credible front, MOU signs, state governments very constructive,
00:32 corporates very constructive. What has been your experience?
00:35 Well, I echo exactly the same thoughts as you have.
00:40 We have seen in every panel discussion, in every session, India's name is getting more prominent every time.
00:47 Not only on the business front, on the geopolitical front as well.
00:51 India's opinion matters. I think that's the bottom line.
00:55 India matters to the world. From a consumption story, from a political perspective,
01:01 we are seeing chaos in many parts of the world right now.
01:04 Everybody is looking at India as a stable option with a growing economy.
01:10 All our ministers are here, we have a very strong delegation.
01:13 We are looking at 6 to 8% growth over the next decade.
01:17 That's the thought that has been outlined by the government.
01:20 And compared to any other economy on the world currently, we are seeing over 2700 representatives from over 100 countries.
01:29 And in the interactions we see they are extremely excited about the opportunity in India.
01:33 Anything specific that has stood out for you?
01:36 Because as a buzzword, it's generative AI.
01:39 But I hear you say about corporations and participants very excited about the India investing opportunity.
01:46 What has stood out for you out there in that aspect per se?
01:49 It begins with sustainability and especially investment in climate.
01:54 We've just announced and MOU ourselves with the government of Maharashtra.
01:58 We are investing $3 billion in a green ammonia project.
02:01 It's going to be Maharashtra's first green ammonia project of half a million tons.
02:05 So it's a great step forward under the guidance of Prime Minister Narendra Modi's vision for the green hydrogen economy.
02:13 It's going to be 100,000 tons per annum green hydrogen plant followed by an ammonia plant.
02:18 We are obviously going to export a lot of that green ammonia.
02:21 But we are also looking at use cases internally within India.
02:25 So when we talk to people, everybody is interested in the potential of India to become a great player in the green energy economy as a global supplier.
02:35 As opposed to being a net importer, we propose to be a net exporter going forward.
02:41 This is under the part of the unlisted INOX products?
02:45 That's right.
02:48 Now that there is a very listed entity which is a recently listed one.
02:54 So I just wanted to get that clarity.
02:56 Absolutely right. Air Products are partners.
02:58 They are the world's largest manufacturers of hydrogen.
03:01 And they are also setting up the world's largest green hydrogen project in NEOM.
03:05 A 1.2 green ammonia project in NEOM.
03:08 So taking a cue from that, we decided to go ahead with this investment.
03:12 NEOM is fairly prominent on the promenade as well.
03:15 It is.
03:16 Let's talk about that first and then move on to INOX India.
03:21 So what else is happening?
03:23 A $3 billion commitment is spread over how many years? Part 1.
03:28 And what does this do?
03:30 As much as people are talking about private CAPEX not quite coming to the fore.
03:35 And maybe it's not coming in some of the traditional businesses.
03:37 But in a lot of new businesses, data centers, green energy, etc.
03:41 There has been a slew of announcements over the last 12 months.
03:45 Not only that, I would also add the electronics and semiconductor industry.
03:50 Just this morning I was on a roundtable with Minister Vaishnav
03:53 with a host of global executives from the semiconductor industry.
03:57 And they are all extremely excited about the kind of incentives being offered
04:02 by the government of India under the SPEC scheme and the semiconductor policy
04:07 are so enticing that they are all excited to get there.
04:10 We as INOX Air Products are the supply chain partners
04:13 for the electronics and specialty gases and chemicals
04:17 which are required to make these semiconductors.
04:20 The first investment under this policy has been done by Micron.
04:24 And we are partners with Micron.
04:25 And Micron has already broken ground.
04:27 And we've already established the supply chain for all their needs.
04:31 So we are seeing, apart from green energy and climate-related sustainability actions,
04:37 semiconductors being a big area of focus this time around in India as well.
04:43 Okay, that's interesting.
04:44 And yesterday I think Foxconn made an announcement of tying hands
04:48 with the HCL group as well in order to do this.
04:50 So there are some palpable announcements happening in and around.
04:52 Absolutely. Foxconn has made a large announcement in Karnataka.
04:56 We've partnered with them.
04:57 We are supplying them in their Chennai facility
04:59 and now in their upcoming Karnataka facility as well.
05:02 We'll be supplying them.
05:03 And so we are here to support all these large global investors
05:07 to come in and set up capacity.
05:09 We're showing them we can do it in record time at great prices,
05:12 affordable for the Indian market.
05:14 In some sense, I'm just trying to understand,
05:17 there is a lot of talk of India GDP, India business is doing well.
05:20 Is there a bit of a JCO effect that could come into select businesses?
05:25 Because when you talk about the kind of supplies that you are doing
05:29 and the kind of investments you are making,
05:30 it's not something that we've heard too often from your group as well per se, right?
05:34 The size that I'm talking about.
05:35 Is there a bit of a JCO effect to this?
05:37 You know, we're just excited about being the largest industrial gases company in India
05:42 and having the opportunity as the GDP grows in 6 to 8% over 10 years,
05:49 you can see a multiplier effect.
05:51 In manufacturing, gases grows at 2 times GDP.
05:55 So a historical 50-year average.
05:58 So if the gas industry is going to grow at 15 to 17% for the next 7, 10 years,
06:04 you can imagine the amount of focus that's required.
06:07 And we always invest ahead of schedule.
06:10 We never invest after the demand comes.
06:14 We always invest ahead of the demand.
06:16 That's been the fundamental difference about Enox Air products
06:19 and why we've been successful.
06:21 Okay. So that's on Enox Air.
06:23 Now talk about Enox India as well.
06:25 A lot of talk about how technology advances at a very rapid pace out there
06:29 in the cryogenic businesses.
06:31 You've recently listed, you've tasted success as well.
06:34 Tell us about Outlook 2024.
06:36 Sure. First of all, we're very happy with our listing.
06:39 It was a great success.
06:41 We're very thankful to all our 2.5 lakh investors who came in.
06:45 In terms of technology, the holy grail of cryogenics is liquid helium.
06:50 And we're happy to announce that we have established and developed
06:54 our India's own indigenous liquid helium container,
06:58 which only three other nations have been able to do.
07:01 No one else has this, and we have been able to develop it indigenously.
07:05 Now that, as I mentioned, is the holy grail of technology in cryogenics.
07:09 So more than a new technology, it's the application of cryogenics
07:14 that is really increasing.
07:16 What is our strength?
07:17 Our strength is design, engineering, manufacturing, and installation
07:22 of these complex cryogenic and vacuum systems
07:26 in different applications globally, whether it's marine,
07:30 whether it's potentially submarine, on the road,
07:35 in various applications.
07:38 We are now doing small, mini LNG receiving terminals
07:43 in different parts of the world.
07:45 We've done one in Scotland, one in Antigua,
07:47 and we're talking to many other people.
07:49 So the strength of-- it's not just our technology,
07:54 it's how you apply that technology, which really matters.
07:58 And we're getting great traction from our global customers
08:04 who want to invite us to do more complicated projects.
08:08 Now even in the scientific community,
08:12 we've supplied very complex systems to the world's largest fusion project
08:18 at ITER in France.
08:20 So we are making extremely complex helium pipeline systems
08:24 for this project.
08:26 And similar to that, there are other projects coming up in Germany,
08:29 such as FAIR, the CERN project in Switzerland,
08:32 which is expanding as well.
08:34 So yeah, we're very excited about partnering with all of that.
08:37 Is there a mode that you have which enables you to bag all of these,
08:40 and will it continue to benefit you in the times to come?
08:43 Absolutely. Our mode is 30 years of experience,
08:46 30 years of building on our technology, perfecting manufacturing,
08:50 and ensuring that it lasts and it continues for--
08:53 it runs successfully for 20 to 30 years.
08:56 So we have over 400 engineers in-house.
08:59 We understand the most complex codes and standards
09:04 because we deal with nuclear codes, pressure vessel codes,
09:08 which vary from country to country.
09:11 We have certification. Our shop is certified
09:13 by various governments across the world.
09:17 So that certainly is our mode.
09:19 Okay. And I heard you use the term small-scale--
09:23 - Excuse me, I heard you say LNG. - LNG, yeah.
09:25 Now, India is a large importer, current and potential as well
09:29 for the rest of the decade. What's happening in India?
09:32 So we have six import terminals in India currently.
09:35 And so large-scale LNG means when it comes in the massive ships
09:39 and is gasified into pipelines.
09:42 But those same terminals also have a truck-filling bay
09:47 so that wherever a pipeline--
09:49 let's say there's a customer who's off-grid,
09:51 who's not connected to the pipeline,
09:53 and there are thousands of such customers,
09:55 and they want to decarbonize, they want to reduce the CO2 emissions,
09:59 they then come to us to deliver liquefied natural gas to them,
10:03 which we pick up in trucks and deliver to them.
10:06 We set up a regasification station within their premises
10:10 because they're off-grid.
10:12 Is this business expanding rapidly in India?
10:14 Absolutely. It very much is.
10:16 Everybody is looking to move from diesel and HFO
10:20 into a low-CO2-emitting fossil fuel.
10:23 Till such time, hydrogen really becomes competitive
10:27 and comes down to the, you know, $1 or $2 per kg,
10:30 but that's a decade away.
10:32 So it sounds very exciting.
10:34 We are probably in the silent period,
10:36 so I won't dwell you to specific numbers,
10:38 but I'm just trying to understand--
10:40 at Davos, people talk about longer-term goals.
10:42 Let's say five years is a long term in the current volatile world.
10:46 What are the goals that you're setting for INOX India
10:49 over five years in terms of either the pace of growth,
10:51 the kind of return ratios, what have you?
10:54 Historically, we've grown at 20% a year for the past five to seven years,
10:59 and we hope to continue that growth over the next five years as well.
11:02 We are seeing our inherent core strength of India
11:06 is not only a competitive manufacturing,
11:09 but our ability to offer customized solutions to the world.
11:13 The product in which we are is not a standard product.
11:17 You know, they're very complex end-users for it.
11:21 So I certainly see INOX India, or INOX CVA,
11:26 becoming a dominant player globally in the cryogenics field going forward
11:30 over the next five years.
11:31 Okay. With the growth rates maintained or maybe improved,
11:34 and return ratios also looking better, I presume?
11:37 Well, we've always had very healthy return ratios.
11:40 We hope to maintain the same return ratios as well.
11:43 And any other listings from the group before we wrap up?
11:46 No, I think that's enough for now. One was last month.
11:49 We, of course, PVR INOX is listed as well,
11:52 and that's doing very well as well.
11:54 We already have two listed entities in the group.
11:56 Touch wood. Okay. Well, wishing you all the best for the remainder of your stay here.
12:00 But thank you so much, Siddharth, as always, for talking to us.
12:02 It's always a pleasure. Thank you so much.
12:04 Thank you so much, and viewers, thanks for tuning in.
12:06 [Music]