Mr. Ratanlal Mardia, MD, Nissan Copper
“We have created a company, which is less cyclical and more diverse.”
Nissan Copper started its first copper pipe unit at Umergaon in September, 1991. Nissan manufactures copper rods/Section/flats, Copper Ingots/Billets Bars, Copper Wire Bars, Copper Strips and Copper Pipes catering to FMCG, OEMs and construction industry. Nissan manufactures tubes starting from melting of scrap/Cathod. These copper components are mainly used in switchgears/panels, radiators, refrigeration, electric appliances, connectors, heat exchangers. Nissan's high standard quality products have enabled it to accredit the ISO 9001:2000. The company is supplying its products for the projects of well known companies in the Air conditioning and Refrigeration, Engineering & Gas Application industry and few of them are Eletrotherm India Ltd., Blue Star Ltd., Voltas Ltd., Siemens Ltd., Hindustan Copper Ltd., and Nutech Construction Pvt. Ltd. Etc. Over a period of 16 years, Nissan has established its reputation and reliability in the market. With long experience and accumulated technology, Nissan ensures, all the products of the company confirms with all the major specification and customer requirements.
Mr. Ratanlal Mardia joined Nissan Copper Pvt. Ltd. as Director in 1991 and was appointed as Managing Director of the Company on 28th October, 2005. He is the younger son of Mr. Shantilal Mardia, the Non Executive Chairman. Ratanlal Mardia is a Commerce Graduate (B.Com) by qualification. He has wide experience in Copper industry & marketing. After completing his Graduation, he was involved in the family business for two Years in Jain Metals at Mumbai. His strengths include financial and commercial expertise and also takes care of the administration of the Company.
Anil Mascarenhas of India Infoline speaks with Ratanlal Mardia who says, ?We have created a company, which is less cyclical and more diverse.?
What kind of future do you foresee for the industry?
Growing industrialization and strong infrastructure investment scenario have resulted in increasing demand for copper products. Also Ozone Depletion Controls through Montreal Protocol, Global Warming and Energy Efficiencies are expected to be important growth drivers for the demand of copper products in air conditioning industry.
Increase in disposable incomes, changing aspirations and rising affordability are brighter areas for the white goods market, which is one of the major users of copper products.
Overall due to strong future of the user segments the outlook of copper products also looks positive.
Brief us on your expansion plans
We are planning to develop our products in Refinery, Petrochemical and Power sector. Post expansion we will manufacture copper tubes of bigger dimension, which are used in Petrochemical industries and Oil Refineries. There is tremendous requirement of copper tubes in these fields.
The proposed expansion would aid to help improve average order size and gain entry into export markets. NCL is planning a major expansion, which not only includes capacity additions but also production of value-added products which will help enhance the client list and open up exports markets.
Copper products, mainly comprise copper tubes, pipes, wire bars are basic inputs for supply and conservation of power and heat. Robust growth in industrial and infrastructure investments, leads to a demand push for copper products.
NCL is an established player in the copper products segment which includes copper pipes, tubes, ingots, coils, wire bars, etc.
How do you plan to fund your expansion? How much have you tied up with banks?
We have crossed sales of Rs.612mn as on till 30th Sept ?06. We plan to fund our expansion through loans. The State Bank of India has already appraised our project and sanctioned a fresh limit of Rs250mn. for the new project. The company plans to raise Rs350mn (Rs 250 million via IPO and the rest from SBI). The price band of the equity shares is fixed between Rs33 and Rs39. The issue opens on December 4 and closes on December 8.
Which are the sectors you cater to?
We have created a company, which is less cyclical and more diverse. This was done with the introduction of new products, which enabled us to be better positioned to be a leader in the markets we serve. We cater to a wide range of sectors including the following:
? Petrochemical & Oil Refineries`
? Power Generation & Energy Distribution
? Chemicals & Fertilizers
? Atomic Energy, Space Research & Defense
? Electrical, Electronics & Telecommunication
? Ship Building & Automotive Transport
? Machine Building & General Engineering
? Air Conditioning & Refrigeration
? Water Coolers & Deep Freezers
? Food Processing & Interior Decoration
? Hardware, Fixtures & Fittings
? Writing Instruments & Office Accessories
? Domestic Gadgets and Home Appliances
What is pushing the demand for copper?
The importance and demand of copper products are growing due to properties like superconductivity and higher recycling rate. Copper has wide-ranging applications in transportation, electrical, electronic, consumer & general products, construction, industrial machinery & equipments. Nissan fully understands the need to supply its materials in accordance with customer requirements, while ensuring stringent quality checks and time bound schedules.
The production capacity is fully adapted to supply materials and deliver a range of copper related products in the form of strips, rods, tubes, sheets, plates, bars, wires.
The production operations are conducted deploying strict values, applying careful planning and implementation in a structured manner to deliver all of what is required to achieve the desired results and compliance of requisite parameters
Can you give us an idea of the range of your clientele?
Our list of clients is a diversified one. Our Client list includes Electrotherm India, Blue Star, Voltas, Siemens, Carrier Aircon, Hindustan Copper, etc. which belong to a variety of sectors, from air conditioning & refrigeration to engineering and gas applications.
What is the advantage of expansion at Silvassa? What are the benefits you get there?
The Silvassa plant is entitled to fiscal incentives and low power costs. The plant enjoys sales tax benefits for a period of 15 years and income tax benefits for a period of 5 years u/s 80IB effective April 2003. Power cost at the plant is also very low, at Rs2.56 per unit.
What kind of growth do you expect in the user segments?
We see robust growth at 25-30% CAGR in air-conditioning market and decent growth of 10% CAGR in the refrigeration market rover the next 2-3 years. Room AC market is expected to grow by 18-20%, while the growth of Central AC markets is pegged at 30% in FY07. Refrigeration market is also expected to show a decent performance of 10% growth in FY07.
Also there are immense opportunities available in solar water heating systems in the heater segment. From what we understand, the potential market for solar heaters would stand at 1mn units by 2012.
Could you elaborate on existing and future opportunities for the copper industry?
Copper is one of the major inputs for the infrastructure industry that includes power, construction, and ship building and telecommunication sector. Increasing investments in basic infrastructure has led to a simultaneous rise in the demand for allied sectors like automobiles, white goods market and the luxurious goods segment. Riding on the wave of the economic boom, which includes strong industrial and infrastructure investments, the future of copper products industry is shining.
Is there a demand-supply imbalance in the sector?
Yes there is an imbalance as demand outstrips supply. Total copper tube requirement for the use of air conditioning, refrigeration, heat exchanger, plumbing, heating for electrical connectors, geysers, railways, defense and other industries in India is in excess of 35,000 tpa, while manufacturing capacity (both organized & unorganized sectors) is approx. 10,000 tpa only.
Energy conservation too throws up some opportunities. Tell us more about it.
Conservation of energy is an important feature of the solar water heating system, which is best suited to the needs for Indian consumers. Potential market for solar water heating system is believed to be 30mn square meter collector area. The solar water heater market in India is about 1mn units by 2012.
To produce the solar collector (a device that extracts the energy of the sun directly into a more usable or storable form), copper tubes and copper absorber sheet are considered as major inputs, while the cost of collector is about 30% to 40% of the system cost and the absorber panel costs about 50% of the collector. In India around hundred manufacturers of the solar water heating systems are estimated with well established manufacturing base. Estimated requirement of copper as input to produce estimated 30 mn square meter solar collector:
Construction industry, which includes housing as well as hotels segment are the important customers of solar heaters. Conservation of energy is an important feature of the solar water heating system, which is best suited to the needs for Indian consumers. Potential market for solar water heating system is believed to be 30mn square meter collector area. The solar water heater market in India is expected to reach about 1mn units by 2012 and in India there are approximately hundred manufacturers of the solar water heating systems with a well established manufacturing base. The Construction industry, which includes housing as well as hotels segment, forms an important part of the clientele for solar heaters.
To produce the solar collector (a device that extracts the energy of the sun directly into a more usable or storable form), copper tubes and copper absorber sheet are considered as major inputs. While the cost of collector is about 30% to 40% of the system cost, the absorber panel costs about 50% of the collector.
And what about Heat exchangers?
Heat exchanger is a device, which transfers the heat from an area of higher temperature to lower temperature. These heat exchangers are mainly used in Power Plants, Fertilizer, petroleum, Petrochemical, Steel and other Industrial Plants. Copper tubes have major relevance for the exchangers from performance, cost, as well as delivery point of view. Almost 80% of the cost of heat exchangers can be accounted for by the tubes.
HE&F (Heat Exchanger and Fabrication) division of BHEL plans to enter into a MOU/Rate contract with the reliable and quality manufacturers of these copper tubes to meet the ever increasing demand of the customers.
What would you say are the entry barriers to the industry?
The entry barriers can be summed up as follows:
? Cost structure
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