Solar Industries India Limited was founded in 1995 by its founder Chairman Shri Satyanarayan Nandlal Nuwal to produce cartridge explosives. It has grown to become India's largest manufacturer of Industrial explosives and Explosive initiating systems and spreading its presence to Global Markets. The company offers high-quality products and services that are backed by stringent safety standards, a robust infrastructure, and a proven quality management system. Solar's manufacturing facilities span 17 locations across India along with 3 manufacturing units outside India.
Tell us about your global footprint. How do you compare with your global counterparts?
The company has 3 overseas manufacturing facilities. All the three manufacturing facilities are operating smoothly. We have now embarked on an exercise to enhance our international footprint through a plant in South Africa. The plant is scheduled to commence commercial production during Feb 2017.
We are exporting to more than 24 countries with consumers across 42 countries.
We have achieved peer position as a renowned manufacturer and exporter of industrial explosives and accessories in the industry. Our name is being synonymous with quality and innovation. Due to our broad and extensive product portfolio, overseas manufacturing operations and exports, we are competing head to head with the largest explosives manufacturers worldwide.
What is your current market share as compared to your competitors?
We are the market leaders with 23% share in the domestic market and a 55% share in exports of industrial explosives and initiating systems.
What expansion plans have you undertaken in recent times and what are your growth plans for the FY17-FY19 period?
(i) Increasing the capacity of Packaged Explosives and accessories substantially to meet the growing demand.
(iii) We have set up our fourth overseas plant in South Africa which would start contributing to revenues from 2017-18.
(iv) We are the first company in the private sector to set up a plant for the manufacture of HMX required for Defense. We also have facilities for manufacturing of propellants, pyros and igniters required for our missile systems. We aim to supplement India’s indigenous defense manufacturing and to support the nation’s efforts in building ammunition war reserves under the “Make in India” initiative.
Can you highlight a few notable milestones since the genesis of Solar Industries India till date?
|1996||Commenced production of packaged explosives|
|1998||Commenced production of Detonators|
|2000||Commenced production of Bulk Explosives|
|2001||Added Detonating cord, Cast boosters and PETN to our product portfolio.|
Tapped the primary market and listed shares on BSE and NSE.
Commenced exports to overseas countries
|2007||Extended India presence by setting up new bulk plants|
|2009||Emerged as India’s largest explosives manufacturer.|
|2010||Venture into defense segment|
|2012||Set up manufacturing units at Zambia, Nigeria and Turkey.|
Set up manufacturing facilities of HMX and Propellants.
Commenced manufacturing of 3-layer shock tube.
Commenced commercial production of electronic detonators.
Introduced underground Bulk Explosives.
|2015||Commenced supply of HMX and HMX compounds.|
Set up facilities to manufacture Warhead fillings, Pyros Igniters, Propellants for Pinaka Mark-II.
Set up manufacturing facility in South Africa.
Please provide a breakup of business in terms of domestic and international?
70% of our business comes domestic sector and balance 30% from the international sector.
What is your projection on revenue growth for the next 3 fiscals?
We foresee a growth of 20% each year for the next 3 years.
What are the unique initiatives and policies implemented by the government that provide an added impetus to Solar Industries India's growth plans?
Make in India
The government has accorded the highest priority to “Make in India” for boosting the economy and creating employment to its young population. Moreover, India is heavily dependent on imports to meet the defense acquisition requirements. About 70 per cent of the capital acquisitions for equipping armed forces are met through imports. Therefore, one of the focused areas for “Make in India” is defense industry that provides support to the national security in addition to creating employment. Thus “Make in India” programme in defense sector is extremely relevant with the twin objectives of creating employment and bolstering defense preparedness to strengthen national security.
DPP focusses on institutionalizing, streamlining, and simplifying defense procurement procedure to give a boost to ‘Make in India’ initiative of the Government of India, by promoting indigenous design, development, and manufacturing of defense equipment, platforms, systems and sub-systems. ‘Make’ procedure has also been refined to ensure increased participation of the Indian industry. Enhancing the role of MSMEs in defense sector is one of the defining features of DPP. Cutting down permissible timeframes for various procurement activities, and institutionalizing robust mechanisms to monitor for probity at various stages of the procurement process, are the cornerstones of DPP.
- As per estimates by the Government of India, coal demand in the country is expected to be in the range of 1.5 billion tones by FY2020.
- The government had launched the "Power for All" campaign in April 2015, under which it plans to provide affordable power to all houses by 2019.
- In FY 16, CIL was operating 430 mines. In its roadmap, CIL has planned to achieve 908 MT from 535 coal mines in FY 2020. Thus, CIL’s total number of operating mines will increase at an average of 26 per year till FY 2020.
- SCCL is the second major coal producer in India after CIL. In order to meet the government’s vision of 1.5 BT of coal production in India, SCCL is required to produce 100 MT of coal by FY 2020.
- In FY 2016, SCCL has produced 60 MT of coal, while it has set a target of 10% growth rate this year and reach to an annual production of 66 MT. If it keeps increasing their production by same rate for the next four years, it will reach very close to 100 BT production in FY 2020.
- In the last decade, there have been reforms across wide spectrum of real estate issues such as land acquisition, regulation to protect customer interests, opening the doors to foreign investors, and the introduction of REITs.
- With rising per capita income and urbanisation, the demand for real estate continues to be robust,
- Under the ambitious "Housing for All" by 2022 scheme, the Government of India will be constructing 2.95 crore houses in the rural areas.
- India would require about 11 crore housing units on a pan India basis by 2022 to achieve the above vision.
- Government plans to spend nearly Rs. 81,975 crore over construction of one crore houses in the first three years of the Pradhan Mantri Awaas Yojana- Gramin.
- Road construction in India has accelerated to an all-time high pace of 22-23kms per day. The current pace is a thrid more than the previous best of 15km per day achieved in 2012.
- Shri Nitin Gadkari is confident that an ambitious target of 45kms per day will be touched soon.
- The government has already awarded contracts worth Rs. 1.8lakh crore.
- NHAI expects to award projects worth Rs. 1lakh crore for constructing about 6,500km of highways in the current fiscal year.
- The overall budget of the highway ministry has also seen a 31% rise in 2016-17, to Rs 57.976 crore from Rs. 44,225 crore in 2015-16.
- The government will award road construction projects worth Rs. 3 lakh crore by end of fiscal year 2017.
- The government is focusing on accelerating road construction and has taken a number of steps to double the pace at which highways are built in the country.
- The Government of India plans to award 100 highway projects under the public-private partnership (PPP) mode in 2016, with expectations that recent amendments in regulations would revive investor sentiments in PPP projects in the infrastructure sector.
- The Government of India has made a record allocation Rs 221,246 crore (US$ 33.07 billion) for several infrastructure projects in Union Budget 2016-17, which is expected to provide significant boost to Indian infrastructure sector.
- The Government of India is planning to boost regional connectivity by setting up 50 new airports over the next three years, out of which at least 10 would be operational in next year.
- The government plans to invest over Rs 7,000 crore (US$ 1.04 billion) in FY2016-17 to develop its network in the north-eastern region for better connectivity.
- The Securities and Exchange Board of India (SEBI) has allowed Foreign Portfolio Investors (FPI) to invest in units of real estate investment trusts (REITs), infrastructure investment trusts (InvITs), category III alternative investment funds (AIFs), and also permitted them to acquire corporate bonds under default.
- Government of India plans to launch the National Infrastructure Investment Fund (NIFF) with an initial corpus of at least Rs 40,000 crore (US$ 5.87 billion).
What are your expectations on GST and how will it be beneficial to Solar Industries India?
Advantages of GST
1. The compliance cost will come down considerably as most indirect taxes will be replaced by GST.
2. Evasion of tax will drop considerably as input credit would encourage tax compliance.
3. Checks at State borders will be eliminated which slows down movement of goods and result in increased turnaround time of vehicles.
4. Interstate sales - all subject to litigation as in commodities like explosives we are moving goods to warehouses near consuming points and deliveries from there attract the relevant state sales tax whereas the originating state demands payment of Central sales tax causing endless litigation and increases the cost of goods to end users.
5. Manufacturers like us will stand to advantage as we become more competitive as GST would address cascading of interstate sales tax etc.
Walk us through the developments in recent years of the company and also the contribution of the company towards the defense sector in India.
The company since inception have been focused on growing with the economic growth and development of the core industry in India. Keeping pace with the growth in the coal sector the company has set up 23 Bulk plants in proximity to major coal mining areas to meet their day-to-day requirement of explosives and as a result of today the company plants spread over various mining areas in the Country and is poised to increase our locational advantage as new mines and expansion of mines are slated to achieve the ambitious target of 1.5 Million Tons of Coal by the Coal Ministry.
The spurt in demand of infrastructure development with the Govt. of India’s avowed plan of providing housing for all by 2022 and planned to construct 2.95 cr. houses for weaker sections which should spurt the demand for Cement, Steel and aggregate. Further, the Road Ministry have ambitious plan of achieving road construction of 50 KMs a day with four Laning of major Highways, providing connectivity to ports and development of airports, we see a substantial increase in demand of packaged explosives and hence we have increased our capacity at our packaged explosives plant and have the largest capacity available at a single location in the World.
The company is also seized of all environmental impact which blasting operations would create, hence have invested substantially in developing newer initiating system like Non-electric delay detonators and Electronic detonators to mitigate environmental damage.
With our successful operations of overseas plants in Zambia, Nigeria, and Turkey, we have now set up a Unit in South Africa and the coming years would increase our overseas footprints in other economies as well.
Our aim is to supplement India’s indigenous defense manufacturing and to support the nation’s efforts in building ammunition war reserves under the “Make in India” initiative.
With our vast experience in handling explosive substance and energetic materials, we have created notable infrastructure and facilities to manufacture critical high energy materials, propellants and pyro devices required by the defense and para-military forces.
We have set up India’s first state-of-the-art technology based plant to manufacture high energy materials such as HMX and HMX-based compositions. This will be an import substitute for meeting regular and surged requirements of Ordnance Factories, Defense PSUs and DRDO. With the creation of facilities for filling of Rockets, War Heads, Air Bombs, Mines, Torpedoes, among others, we are in a position to undertake production of a large variety of Ammunitions. We have also signed an MOU with the Government of Maharashtra to install world-class facilities to produce Bi- Modular Charge Systems (BMCS) – a vital artillery equipment that propels shells to distances of over 40 kms, fully integrated rockets and the new generation of hand grenades.