- #JaksonGroup to invest Rs 6,000 crore in 2 years
- Working on a pilot project with #NTPC
Vikas Srivastava in conversation with CMD Sameer Gupta.
For the latest news and updates, visit: http://ndtvprofit.com
- Working on a pilot project with #NTPC
Vikas Srivastava in conversation with CMD Sameer Gupta.
For the latest news and updates, visit: http://ndtvprofit.com
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TVTranscript
00:00 Welcome to NDTV Profit. I am Vikas Srivastava. Today we have with us Mr. Sameer Gupta, the
00:05 Chairman and Managing Director of Jackson Group, which is India's largest or one of the largest
00:10 manufacturers of diesel gen sets. As the world is progressing towards greener energies, Mr. Gupta
00:17 will talk to us or take us through to the green energy business plans and future business strategies.
00:24 Welcome to NDTV Profit, Mr. Gupta. Thank you, Vikas. Thank you so, so much.
00:28 Yeah, so to start with the logical question to begin with would be, you know, how and where
00:34 do you see your diesel gen set business and how relevant would they be in coming years?
00:39 So, Vikas, that's a very interesting question, which you have put. Let me put it this way.
00:47 Diesel gen set business is going to be very, very strong in times to come as well.
00:52 In foreseeable next, I would say after 2050 or so, I don't see an alternate to diesel as a fuel.
01:00 And when I say that, not that alternates are not there, but considering the application of a gen
01:05 set, which is more of a standby or emergency power or a backup solution for that application,
01:12 no other fuel fits in the best, but fossil fuel. And that's a reality currently. And if you look
01:19 at it, even in last three years, despite the fact that, you know, grid supply has improved
01:24 significantly, the sale and the demand of generating sets is strongly, it has strongly
01:30 increased in last three years. And what I foresee over next 10 years, eight to 10 years, very clearly
01:36 the demand is going to continue to grow at least 12 to 15% year on year. And the main drivers for
01:43 the growth are going to be, you know, applications like, I would say infrastructure, say if you're
01:49 doing any kind of construction, be it a building or a road construction, any infrastructure that
01:53 matter, you need gen sets at site for construction. You cannot use any other source of power,
01:59 but a gen set for these kinds of applications. Likewise, rental application, you know,
02:05 likewise data centers where you need backup of N plus one or N plus two, which is driving demand
02:11 for generating sets. So I clearly see this industry growing at a robust 12 to 15% year on
02:17 year for next 15 years. That's number one. Number two, the application is certainly changing. What
02:22 used to be prime power a few years back is now standby power or emergency backup. It is,
02:28 in fact, if you look at it, it is selling like an insurance policy. So from demand standpoint,
02:34 there is no concern. In fact, we recently invested in a new gen set facility in Fulton in Maharashtra
02:41 and our aggregate capacity today, which used to be about 10,000 gen sets a year up to last year
02:47 is now 15,000 gen sets. And we made this investment very recently, keeping in mind that
02:53 the demand is going to continue to grow in coming years. The only change what's going to happen is
02:58 diesel per se is going to get cleaner as a fuel and the technology of engine also, you know,
03:04 is now the gen sets what we have started manufacturing and what is going to be
03:08 mandated by CPC become June, July. It's going to be all CPCB4. And very interestingly, the
03:15 exhaust of a gen set is going to be cleaner than the ambient air in cities like NCR, where EQ,
03:22 AQI touches to 400, 300 remains at 400 for a significant few months. So that is the quality
03:29 of output, which is going to be there, output exhaust, which is going to be there from these
03:34 kind of gen sets, which are going to be totally pollution free. So that's the technology change
03:38 we are going to see. But demand side, to your question, that's going to remain. It's going to
03:43 grow. This industry is going to grow robustly in coming, you know, next easily 10 to 30 years.
03:48 Okay. In fact, that was going to be my next question, where you said that the technology
03:54 will change and it will make the ambient air much more cleaner. And even the exhaust would
03:58 be much more cleaner. My question would be like, you know, what exactly are you going to do in this
04:03 technology? Because diesel as a fuel will continue to be a diesel or fossil fuel, you know. So what
04:08 exactly would we do? Rather it will be done with the fuel or it would be a technology on the
04:14 exhaust side and that will change, you know. So Vikas, I would like to answer this question of
04:20 yours in three different buckets. One is technology on the engine side for diesel.
04:26 So there, like I said, we are now, we have already, the industry has moved to CPCB4,
04:34 which is an industry standard mandated by CPCB or by the law, where the changes are done on the
04:41 technology of the engine primarily, which makes this engine suitable to give exhaust, which is
04:49 very, very clean. So that's on the engine technology. At the same time, quality of diesel
04:54 as a fuel in terms of adulteration, et cetera, et cetera, has also improved significantly. So
04:59 these are two parts as far as diesel or technology of the gen set is concerned.
05:04 Second, thirdly, I would say, you know, we have been hearing a lot about hydrogen. I'm sure
05:08 you would have also heard or read about it. Hydrogen is another fuel, you know, we work with
05:15 Cummins as we are aware, we are partners to Cummins and Cummins has been investing heavily on
05:20 technology. They are among the first company globally who have introduced a hydrogen internal
05:26 combustion engine where instead of, you know, fuel, diesel being a fuel, the fuel is going to
05:31 be hydrogen. And once this hydrogen, which is a green hydrogen, these gen sets, these engines
05:38 are going to be totally pollution free, zero pollution for that matter. And the only constraint
05:44 today, if you ask me is broadly, I would say, you know, the technology part of it or the stability
05:51 of technology part of it, infrastructure part of it, a system to distribute green hydrogen
05:57 or to have green hydrogen dispensers all over the country. That's what's the limiting factor,
06:03 maybe cost economics. Once these are in place, which to my mind will take anything between five
06:08 to 10 years, it's kind of work in progress. A lot of pilots, by the way, are coming in
06:13 as we talk because we are working on a project with NTPC where we will be producing green hydrogen
06:20 using electrolyzer. And this green hydrogen is going to be then dispensed for commercial vehicles
06:26 into buses. This is a, although it's a pilot project being done by NTPC, but then over the
06:32 next five to 10 years, these technologies will stabilize, the cost curves are going to come down.
06:37 And that's when we see, you know, this will gain popularity, this concept overall will gain
06:43 popularity. Right. I mean, there are very interesting questions that come out of it or
06:47 emerge out of it. You are talking about using hydrogen as a fuel for gensets. So what is the
06:54 kind of timeline you would give for this kind of technology to be adapted in India? And also from
06:59 the cost point of view, one, you said that dispensing agents aren't there right now.
07:03 The other would also be cost. So by when you think that would be more feasible, wherein
07:08 company like Jackson would be using it? So because my guess is, as I said, a lot of
07:15 pilots are happening, a lot of R&D work is happening, technology of electrolyzers per se,
07:22 electrolyzer, fundamentally speaking, it's a component which converts water, which splits
07:29 water into two atoms, which is hydrogen and oxygen. And if the energy used in electrolyzers
07:35 is green, the hydrogen so produced is called as green hydrogen, which is emission free. That's
07:40 the very, very fundamental today. In last three or four years, a lot of electrolyzer manufacturers
07:46 all over the world, including China or Europe or India or US for that matter, they have come.
07:52 But the technology has yet not stabilized in terms of efficiency, in terms of even power
07:59 consumption of the electrolyzers, so on and so forth. So my guess is what we were hoping as
08:04 industry two years back, that technology is going to stabilize by 2030 or so. My guess is it's not
08:10 going to happen before 2025. Between 2035 to 2040, time frame to be very, very practical.
08:17 In my mind, what probably solar was in 2012, where a cost of solar power used to be close to 10
08:25 rupees a unit, that's what green hydrogen is today. But there is no other alternative. We
08:31 are talking of a net zero transition. We are committed as a country to be net zero by 2017.
08:36 I think why only India? The world has no other option but to pass it in green hydrogen. But this
08:42 journey is going to take anything between five to 10 years. After five years, we will start seeing
08:48 moves. But then stability won't come before next 10 years, because technology is not there,
08:54 infrastructure is not there. There are challenges of storage. There are challenges of transportation
08:58 of green hydrogen. So once all these things are in place and the cost curve starts coming down,
09:04 that's when adaptability of green hydrogen is going to be a lot more there. Isn't it clearly
09:12 not before 2035? Also, give us some more details about your green business plans,
09:18 because we have read a lot about your renewable plans. You also plan to enter into battery storage,
09:24 module manufacturing capacities you are setting up. So take us or take our readers or our viewers
09:31 through your plans in this green energy business. So coming to our green business,
09:37 one is that on the distributed energy side, we are in the solar rooftop. We have about 60,000
09:45 of our customers who have been using our gensets over the last 75 years. These customers, we are
09:49 offering solar rooftop solutions. And within a short span of last four to five years,
09:54 they are amongst top five solar rooftop companies in the country. That's one. Number two,
09:58 we are also in the manufacturing of solar modules. Our plant is based in Greater Renoida.
10:03 Our current capacity is 1.2 gigawatt. And we intend to, we are committed to now make investment to
10:10 take this capacity to 2 gigawatt, as a matter of fact, 2.2 gigawatt with a cell manufacturing also
10:17 of 1 gigawatt. So that's something what you are going to listen or hear very hotly over the next
10:23 three to six months. This is a committed investment, which we are going to make into
10:28 manufacturing of solar cells along with solar modules. So that's the second piece.
10:32 Our third piece is our solar IPP business. We have signed IPPs. PP is worth almost 1 gigawatt,
10:41 primarily with SICs and NTPs and HPCs of the world. And these are all going to come up in Rajasthan.
10:48 We have a solar park there. And this is going to be close to approximately 4,500 crore of
10:54 investment, which we are going to make over the next two years. And this doesn't stop here. This
11:00 is just a beginning. We intend to now get into round the clock part, where it's going to be
11:04 hybrid solution, which is going to be solar plus wind plus batteries. In fact, I will very happily
11:13 share that we have one of the strongest design teams, backup teams in the country, which probably
11:20 very few of our competitors would be having. That's the value we bring on the table,
11:27 in-house design capabilities and in-house execution capabilities. I think to our
11:31 feather, we have this feather on our cap of delivering projects before time. That's the
11:36 reputation we have for our green energy business. It's a new outfit called Green Energy
11:42 Private Limited. And in this company, we are also doing solar EPC projects, both in India and
11:48 Middle East and Africa. And we are also getting into green hydrogen or green molecule business,
11:56 not hydrogen per se. We are doing some pilots with NTPC in this company, though, but green
12:00 molecule business. Not only this, we have also invested in the manufacturing of electrolyzers
12:07 in our Greener Norda plant, which is part of Jackson Green again. Our current capacity is
12:12 just about 100 megawatt. As demand goes up, as technology stabilizes, we are going to focus
12:18 more on this. This is the future, not immediate future, though. But yes, we are pretty confident
12:24 that demand for electrolyzers, both in India and overseas, is going to be pretty high five years
12:29 from now. Then we are also into manufacturing of ethanol, grain-based ethanol and bio-CNG plants.
12:38 Our two plants of ethanol, one is going to be in Madhya Pradesh, which is going to get commissioned
12:44 within the next seven days. Trials are going on as we talk. That's a 150-KLPD plant. Second plant
12:49 is in Rajasthan, which is going to get commissioned two months from now. That is 170-KLPD.
12:55 So this is ethanol, which is again a renewable fuel, green fuel. Then two plants of bio-CNG,
13:03 one in Balaghat, other in Karnataka, is what we have signed up for. Balaghat is going to be
13:08 based out of... It's in Sadat scheme, which is where we have tied up with BPCL. Karnataka,
13:17 we have tied up with the Gas Authority of India for selling the bio-CNG. Not only this,
13:23 recently with the government of UP, we have signed an MOU for putting up 10 bio-CNG plants instead of
13:29 Uttar Pradesh. We are scouting for land at the moment. Basically, we are just figuring out
13:34 the availability of feedstock and basis that we are going to be freezing the locations.
13:40 I think two of these locations, we will be signing up or buying the land within month of May.
13:46 That's what the plan is. But in next one to two years, we are going to come up with
13:51 two plus 10 bio-CNG plants as well. That's the overall plan what we have for our green business.
13:58 That's a massive plan, which you are planning to come up with in couple of years.
14:03 What is the kind of CAPEX you have planned for these projects?
14:07 And if you can give a timeline for them as well.
14:10 Vikas, I'll go one by one. Let's talk of solar modules first. It's going to be in two phases.
14:19 CAPEX is going to be about 1000 odd crores, out of which 500, we will end up investing
14:25 within next two years itself. Coming to our solar IPP, as I said, we have already signed
14:31 PPS worth almost 1 gigawatt. This is going to be investment worth 4500 crores. Within two years,
14:37 we will be making investments and we continue to bid for more projects. I don't want to share the
14:46 number, but we have strong plans even going forward for our IP business. Coming to electrolyzers,
14:53 which is about 100 megawatt capacity, that's not a big investment. It's about just 100 odd crores.
15:00 Each bio-CNG plant we are talking about, we have already signed 10, we have signed an MOU with
15:06 government of UP. It's going to be around anything between 50 to 70 crores each plant.
15:11 The two ethanol plants, one which, as I said, is going to be commissioned within this month,
15:15 that is at a CAPEX of 225 crores, each of these plants, one in Rajasthan, other in Madhya Pradesh.
15:23 That's broad what's happening. All these investments I'm speaking about will happen
15:28 within this year to next year. Within 24 months from now, starting now, these investments will
15:34 happen. So close to 5,500 to 6,000 crore rupees in next two years. Easily, we can say.
15:41 Okay. Also, as far as this setting up or increasing, doubling your capacity in
15:48 module manufacturing, does it have anything to do with the re-imposition of ALMM that
15:53 government has reintroduced now? How is this re-imposition going to help domestic manufacturers?
16:00 So ALMM, I think, first of all, to my mind, it was very important for ALMM to come from
16:08 country's point of view, from being self-reliant, from energy security. Of course, we are going to
16:14 create lots of jobs. And at the end of the day, we already have close to 37 gigawatts of capacity
16:22 in the country. So what are the plants which are going to come in India on the solar side?
16:30 I think we have sufficient capacity already available in this country. Not only this,
16:36 huge commitments have been made. And assuming even 80% or 70% of those plants come in,
16:41 this country is going to have a capacity of nothing short of 60 gigawatts of solar modules
16:47 within the next two to three years, which means not only our own domestic requirement,
16:53 we are pretty well poised, or this industry is pretty well committed to even serve export
16:59 requirement. So I think ALMM, coming to your specific question on ALMM, I think that was the
17:06 right thing to do. There is every merit in ensuring that plants which are coming in India use modules
17:14 which are made in India. And of course, we as a country should be very proud of it.
17:19 Okay. Like I was talking to a couple of manufacturers from outside India,
17:24 they said that the capacity that we talk about of 37 gigawatt, this is likely to come up, say,
17:32 in two years' time, because right now the operating capacity is only around 12 to 14 gigawatt,
17:38 which is way less compared to what India's requirement would be, say, 25 to 30 gigawatt
17:43 if we have to achieve our 300 gigawatt capacity by, say, 2030. And also the other thing is that
17:50 the panels that we manufacture in India, as far as the efficiency is concerned, is way below
17:56 compared to what we get from, say, China or from other countries. So right now there is a shortage
18:01 of these kind of panels also in the country. So do you think that Indian manufacturers are
18:06 focusing on utility-grade kind of panels in India? Like, big players like you might be,
18:11 but what about other players who are coming up with a plant of, say, 200 or 100 megawatt
18:16 and setting up in the country? So we have a couple of perspectives. One is,
18:21 very clearly we have the capacity. 37 gigawatt is the current capacity, which is ALM, ALM,
18:29 ALWM approved. So there is no question of this capacity coming up. So one can probably debate
18:35 whether it is output is 70 percent or 80 percent. That could be a matter of debate. But this is not
18:42 the debate that capacity is not there. And this capacity itself is enough to serve the domestic
18:49 demand. If you look at it, last year's number, the solar IPPs or the total demand, total solar
18:56 power plant which came in India was close to, I think, 12 gigawatt, which is far lower than the
19:02 capacity what we have. That's number one. Number two, talking of quality, I don't think we are
19:08 inferior by any standards. We are manufacturing modules and without naming the name of the
19:14 competitors, we have bought competitors' modules, we have tested competitors' modules. Degradation
19:21 of Indian modules, and I'm confidently talking about Jackson Modules for sure, is far more lower
19:29 than what we have from other brands which are perceived, I would use the word perceived to be
19:38 lot bigger companies or lot bigger brands. So I just want to agree to this that Indian module is
19:45 not having that quality. Anyways, if you look at it, because we are, by and large,
19:51 we are importing the cell. So the efficiency and the quality of a module actually will be dependent
19:57 on the raw material, what you are using. Apart from currently, I would say 50 percent of the
20:02 raw material would be close to make in India, which includes EVA, backsheet, glasses, etc.
20:08 But cell primarily still 70 to 80 percent is being imported, where now in next two, three years,
20:14 to your point, in next two, three years, we will see cell capacity coming in. So that's which does
20:20 make sense. But we are no way inferior to the quality. Quality of Indian modules is as good
20:25 or even probably better than what we see globally. No second thought about it.
20:31 Yes, good to hear that. And third point, one more added point,
20:35 this industry will consolidate. So you are talking about the capacity of 100 megawatt,
20:40 200 megawatt, 500 megawatt. To my mind, volumes will have a role to play. To my mind,
20:46 unless and until you have a capacity of anything between one to two gigawatt bare minimum,
20:50 the advantages of economies of scale to that manufacturer perhaps won't be available.
20:57 So the consolidation, yes, that I agree, consolidation will happen. And yes,
21:02 any company who is committed to larger quantities will be able to deliver quality.
21:06 Right. And one more thing, you also are present in this infrastructure space,
21:12 you know, transmission space. So can you talk about that? And also, if you can give a breakup
21:18 of revenue collection, you know, generation from each of your segments, and if you can
21:23 give a future projection also for coming years. Sure, because talking of infrastructure business,
21:30 again, in our infrastructure business, we are doing EPC projects, but we don't want to be a
21:35 pure play EPC company, even in our intra business. So we are doing currently RDSS projects, lots of
21:42 them, we are doing substations for PGCI, we are doing metro, we are doing rural electrification,
21:48 we are doing transmission distribution, we are doing water distribution. We are also doing,
21:53 we did one hospital in Gorakhpur five years back. We have recently won a hospital project in
22:00 Maharashtra as well, which is a reasonably big job for us. That's by and large on the EPC side.
22:08 And we are also now bidding, have started bidding over the last six months for projects like smart
22:13 metering projects, where it's going to be an annuity model, we are bidding for TBCB projects,
22:19 already identified four of them in next three months itself, we are going to be bidding for
22:23 them. We also applied for a data center, we have been allotted one in Greater Northern,
22:28 you're also exploring of getting into data centers. But what I'm trying to make is that
22:34 on our intra business, we are going to be working both on the EPC side, as well as owning assets.
22:41 And coming to the breakup, as I said, this year, we have clocked revenue close to 6000
22:45 odd crores, out of which approximately 1800 comes from our distributed energy business, which is
22:53 essentially gensets and solar rooftop customers. And from our module manufacturing, it's about
23:01 close to 850-900 odd. From our green energy business, which is essentially I would say,
23:09 solar EPC, as well as green molecules, it's close to about 2200 odd crore.
23:14 From our intra business, this year it is close to about 1000 odd crores. And this totals to
23:21 approximately 6000 for this year. The next year projection, the ongoing year, which started on
23:27 1st of April, again 6000 easily. And that's a very pessimist view, we will do at least 8500
23:37 in this ongoing year, which can actually cross. But as I said, it's not an optimist view.
23:42 Our DG business and solar rooftop business is poised to grow by 20%. We are hoping to do
23:48 more than 2200 odd crores from 1750 last year for our distributed energy business,
23:54 which is essentially generating sets, solar rooftop and BIS. For our green energy business
23:59 from 2200, we will be close to 4500 this year. For our intra business from 1000 this year,
24:08 we will be close to 1600 in the ongoing year. And for our solar module business,
24:14 we are going to be close to 1200 from about 850 odd this year. Plus two plants of our
24:21 ethanol are going to get permission, which will add to another revenue of probably 400-400 odd
24:27 crores depending on how fast we stabilize and ramp up the capacity in these plants.
24:32 So this will total to approximately anything between 8500 to 9000 in the coming year.
24:42 So that's where we stand. And having said this, these two years were exceptionally good years for
24:48 us. For the next three years, our plan, our strategy is to grow. We will not be doubling,
24:55 this kind of, it will not be easy for us to retain this kind of growth. But yes, decent 15%
25:00 growth is what we are forcing for next three, easily for next foreseeable three years. I think
25:05 the energy transition space, what we are into, this is the time, this is the window to make an
25:12 impact. And thankfully at Jackson, we have the right ingredient, the right team, right experience,
25:18 right support from all of our stakeholders, including bankers that we are able to unleash
25:23 the opportunity which is lying right in front of us. So that's broadly what the plan is, Vikas.
25:29 Okay. Wish you all the best, sir. Thank you very much for talking.
25:32 Thank you very much for talking to NDTV Profit.
25:36 Thank you. Thank you so much, Vikas.