TEMA India, the first to computerize designs and drawings of shell and tube heat exchangers, is one of the leading manufacturers of shell and tube heat exchangers not only in India but also in the rapidly growing globally conglomerate in the engineering sector. The company has invented the “shrink fit” technology on channel barrel and has a proprietary design and manufacturing process of screw plug heat exchangers. In an email interaction, Haresh Sippy, Managing Director, TEMA India, shares TEMA’s achievements as well as future plans in the process equipment manufacturing field.
How have the shell and tube heat exchangers market evolved in India? What are the key trends in shell and tube heat exchangers as per the end-user sector in India?
The growth of shell and tube heat exchanger market is coupled with the growth of Indian energy sector. India, to sustain energy demands, imports 80 per cent of crude oil and is the third largest importers of crude. This crude after it is imported has to be refined, so what holds the key is growth in the refining capacity of India that will further boost the shell and tube heat exchanger market — to be precise the process equipment industry and market. Going by numbers in 1998, India’s refining capacity was 62 MTPA, over the years the refining capacity grew by 67 per cent till 2011 and going by the projections, by 2017, we will have a refining capacity of around 310 MTPA. This means a growth of 500 per cent in our refining capacity compared to that in 1998. Since 1998 several new refineries have been set up, existing refineries have expanded, and thus it provided the much required boost to India’s process equipment industry.
In addition, there is an increased focus and efforts in the fertilizer sector, so all the process plants in the sector give an additional demand of heat exchange equipment. Already this year’s activities are in an advanced stage for Chambal and Indo-Gulf projects.
The irony is that even after this steep increase in our capacities, we are unable to meet the energy demand of our nation. There is definitely a need to augment our refining capacities which will further boost the shell and tube exchanger industry. The environment — sociologically and politically — doesn’t favour setting up of nuclear power plants, and the renewable energy solutions seem to be distant far. Therefore, we expect the demand for the conventional energy to continue and in turn affect the market positively for shell and tube heat exchangers.
TEMA designed and manufactured 39 exotic heat exchangers for Petrobras P74 project — the first Indian company to do so. How has the deal added value to the TEMA legacy?
The key differentiator in the FPSO Petrobras project is that the equipments are of complex metallurgies. In the FLNG projects, the materials are mostly of the carbon steel metallurgy, but in FPSO project, the metallurgies are INCONEL, Super Duplex and Duplex. The exchangers are used in low pressure to very high pressure applications. The tubing requirement is also unique as the diameter of the tubes ranges from 12.7 mm to 25.4 mm. These equipment are used on an offshore platform, and hence a special inspection and certification by DNV is mandatory, including the engineering approvals. This is in-line with TEMA’s tradition of being a trendsetter. Personally, it gives me lot of satisfaction and is testament to our organizational capability to handle exotic metallurgies.
Tell us more about your patented screw plug exchangers.
The screw plug design lost its significance to a large extent after the catastrophic failure of high-pressure screw plug enclosure in Japan and subsequent failures that were witnessed time and again in several parts of the world. TEMA India, a licensee of M/s Struthers at one time for screw plug exchangers, conducted an in-depth research programme to bring key changes in the design and made it fail safe and maintenance free.
We executed an extensive structural analysis, using finite element techniques, to arrive at the need of an “Added Steel Ring” on the threaded portion of the enclosure to evenly distribute hydrostatic pressure load over the channel body. This helped us develop a relatively thin design of the channel with consequent reduction in size and weight of the exchanger.
Known worldwide for our patented Added Steel Ring technology, we supply tubular exchangers with the screw plug closure system for the most demanding and critical high-pressure applications in hydrocrackers, hydrotreaters and desulphurization units of refinery. This unique technology with screw plug enclosure offers following exceptional safety and maintenance advantages over other conventional exchangers with breech lock enclosures:
- Use of Added Steel Ring prevents bell mouthing of the threaded portion resulting in fail safe operation
- Enhanced performance by use of latest kammprofile gasket technology for reliable leak proof sealing
- Small sized bolting to enable very quick dismantling for in-service inspection and cleaning
- 25-30 per cent reduction in fabrication and in-service maintenance costs
- Up to 10 per cent reduction in weight for ease of handling at site
In conclusion, using our screw plug provides higher production efficiency with ease of maintenance and reduced downtime in service.
PM Modi’s “Make in India” initiative has turned one this September. How successfully has this initiative been helping India become a global manufacturing hub?
The government’s “Make In India” initiative aims to increase the share of manufacturing to 25 per cent from the current 12 per cent of GDP and transform India into a global manufacturing hub by 2022. This is expected to result in the creation of 100 million jobs and drive social upliftment of unemployed youths. Under the initiative, the government has announced several steps to improve the ease of doing business in the country and attract foreign investments.
However, there are still too many hindrances to conduct business in India. For instance, with no clarity on GST implementation, we see less manufacturing investments to flow into India. Similarly, manufacturing in India continues to be crippled by issues, such as shortage of coal, inability to acquire land and tax disputes. While the provisions under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013 are expected to drastically decrease time and cost to acquire land, it is necessary to rationalize the act and set up land banks that would assist projects involving acquisition of large land parcels.
At the time when developed countries like the United States are renewing focus on reviving manufacturing, “Make In India” is not just an initiative but a national imperative that is required to keep pace with global growth. Transforming this vision to reality requires a concrete roadmap that will support not just the manufacturing of today, but also of the future. To ensure the country’s place as a global manufacturing powerhouse, the government, industry and civil society must work together to restore investor and public confidence in “Make In India”.
India, as the World Bank reports, now ranks 130 out of 189 countries in the ease of doing business. What are the things going right for India in doing business?
Much has been said about India improving its “Ease of Doing Business” rankings to 130. In an economy where investment was stagnant for over 4 years, it can hardly be termed as good news. For the government who has set the target of moving to the top 50 positions in terms of ease of doing business in about 3 years, this is perhaps a case of too little too late.
However, if we analyze the report, India has done best in complex areas such as innovation and business sophistication while faring poorly in the more basic and more fundamental drivers of competitiveness, such as health and primary education, higher education and training, technological readiness and labour market efficiencies, among others.
In order to make country further competitive the government has initiated several programs such as “Make in India”, “Digital India” and “Skill India” to increase manufacturing base in country and raise productivity. This will not only improve competitiveness but will also help move the country up the value chain so as to ensure more solid and stable growth.
Having said that, the government should also focus on easing the existing labour market rigidities which obstruct the growth of labour-intensive industries. The government also needs to simplify the country’s business environment and reduce bureaucratic cost of doing business to foster an environment of support and clarity.
Where do you see the India in general and TEMA in particular by 2020?
With reforms being the focus of the current government, there is a positive sentiment across the world about India being a global investment hub. The institutional investors and others see a lot of potential for growth. Recent bilateral deals with Germany, UK and Japan stand testimony to it. We can expect a constant 7.5 per cent growth in the next 5 years.
As India progresses, I want TEMA to be a global leader in the process equipment manufacturing field. We have set a target of achieving a turnover of around of Rs.1,000 crore in the next 5 years. The strategy for expansion is deeper market penetration in the existing markets and developing new markets. In the emerging markets, there is huge potential for developing new technologies and products. We intend to seize this opportunity. As part of our diversification strategy, we plan to undertake small to medium turnkey projects that are heat exchanger predominant.