FY 15 has been a good year for TTL on all major fronts – order booking, order execution and profitability. The Company achieved a growth of 10% in order-booking, 23% in turnover and a significantly higher growth of 33% in net profit. This is achieved, in spite of a weak domestic market demand and tough competition, due to its increased focus on export market for both product and aftermarket businesses. The Company has successfully expanded its operation in overseas market and views this as a major growth driver. Some of the regions such as South East Asia, East Europe and Central America saw increasing enquiry book, order finalisations and progressing projects compared to the previous year.
Order booking increased by 9% in FY 15 and the total order booking stood at 6.46 billion. However order booking in GETL was lower at 0.72 billion as against 1.82 billion in FY 14. On a consolidated basis, the total outstanding order book as on March 31, 2015 stood at 7.47 billion, which has shown a year on year growth of 5%.
The market for steam turbines up to 30 MW remained at around 700 MW. The demand for the steam turbines has remained stagnant for the past three years. In spite of improved business sentiments and various initiatives by the new government, wait-and-watch approach in order finalisation continued during the year. The second half however saw some improvements in enquiry generation and order finalisations. In FY 15, the Company has maintained its market share at 63%, same as last year. Sugar & agro based co-generation and process co-generation, especially paper and chemical segment, were the main growth drivers during the year under review. On account of subdued demand consistently over the past three years, the competition intensity has also increased which resulted in pricing pressure in the market. The Company has selectively taken orders with extended scope of supplies and this strategy helped in increasing the order booking for FY 15. The total domestic market order booking stood at 3.5 billion, while the domestic turnover remained more or less flat at 3.6 billion.
The export order booking, which gained momentum in the second half of FY 14, continued during the entire FY 15. The current year export order booking at 2.93 billion is a growth of 100% in comparison to the previous year, which is an all time high. The turnover from exports also showed a growth of 75% at 2.64 billion. The Company achieved visibility in over 100 countries through enquiries and these enquiries relate to diverse markets across the globe. The Company’s focus on emerging markets, such as, South East Asia, Africa, East Europe and Central America helped the Company to offset the economic weakness in Europe. The Company also took steps to consolidate its presence in North Africa and South East Asia. Understanding the importance of market coverage, the Company has appointed new agents to increase its in select geographies. TTL has currently, installations in over 50 countries. The year-on-year enquiry book has also grown significantly. Even though a plummeting Euro had its effect on the business, the Company successfully mitigated its negative impact by following a progressive hedging policy with regard to its foreign exchange management.
Over the years, the Company has developed the export business and has seen an encouraging growth and potential. To strengthen its presence in the international market and furthering the relationship with customers, the Company has set up two overseas subsidiaries, a 100% owned “Triveni Turbines Europe Private Limited” based in the UK & a step down 100% owned subsidiary “Triveni Turbines DMC” based in Dubai. The new subsidiaries are expected to enable the Company to focus on the marketing within their respective areas of operations and offer better services to its customers due to their proximity, and also offer flexibility in terms of attracting local talents for sales & services which is crucial for the Company’s international competitiveness and sales strategy. This will also enable the Company to increase its product base as well as the aftermarket business.
The Aftermarket Services team initiates a partnership with customer from despatch of turbine all through the life of the turbine. The nature of aftermarket business is ongoing and it lays the foundation for good references for the future business.
This year has been more challenging with large number of turbines being despatched to different parts of the world including as far as in Central America. The service team has reacted pro-actively and ensured smooth commissioning of the turbines leading to satisfied customers; it will help in building a strong lifetime relationship with the customers.
The Company’s network of service centres is strategically located within proximity of customers and this ensures that TTL engineers reach customers’ site faster, thus reducing down time. This is being further strengthened with physical presence in London and Dubai where TTL proposes to position engineers. This will give confidence to the customers and this locational advantage can be leveraged to secure product orders and long term service arrangements.
The slowdown in the market last year helped us to refocus our energies in making new strategies to connect with customers. This strategy has yielded positive results. Going forward, we will continue to focus on building stronger relationships with customers.
The Company’s foray into refurbishment of other makes of turbines last year in a focused manner has started yielding results, particularly in international markets. There has been a significant growth in business from specific regions and this momentum will be carried forward with substantial growth planned for the next few years.
During the year, the order-booking and revenue generation from this business segment showed significant growth and helped the Company to achieve high levels of profitability. In FY 15, the order-booking grew by 8% while the turnover from aftermarket business grew by 32%. The share of aftermarket sales to total sales increased to 23% in the current year from 21% in FY 14.
The manufacturing facility of the Company is located in lush green campus of 11 acres in Peenya Industrial Area in Bengaluru. It is housed in a 15000 square meters of covered area and is equipped with modern CNC machines and equipments dedicated for machining of high precision turbine components adhering to international quality standards. The CNC machinery includes 4 and 5 axis vertical machining centres for blades, mill-turn centres for rotors and CNC gantry and CNC VTL for casing machining. There are specially designed test beds for in-site assembling and testing of turbines, equipped with remote controlled data acquisition system to automatically monitor the turbine performance while testing. The facility also boasts of high speed vacuum balancing tunnel to carry out precision balancing of all types of rotors. The facility can produce around 150 turbines per year. It is certified with ISO 9001 QMS and ISO 14001 EMS standards and has adopted excellence in operations through practising principles of TQM, TPM, Lean 5S, Kaizen, QCs, etc.
The Company has also embarked on an ambitious expansion plan to increase the manufacturing capacity of the turbines to 350 per year. It has acquired a 24 acre land in Karnataka Industrial Areas Development Board (KIADB) Industrial Area, Dobaspete, near Bengaluru and has started construction activities of the new facility. This is designed to be a benchmark facility for turbine manufacturing equipped with most modern shop floor, R&D facility and Learning Centre.
The Company continues to focus on product development in order to maintain its global competitiveness. Its state-of-the-art R&D centre, which is approved by the Department of Scientific Industrial Research of Government of India, is dedicated towards development of technologically superior designs that deliver high performance and meet international requirements. During the current year, 12 new compact and high efficiency models were developed. The Company’s product line is being restructured in modular family to achieve lower cycle time of development. Reaction technology is being extended in select sizes and applications. Value Engineering is being employed to achieve compact footprints. The Company has also initiated efforts on complimentary product lines.
The Company has been steadily upgrading and improving its steam turbine designs for optimal performance to meet increasing power solution requirements from international and domestic customers. The management of Intellectual Property (IP) portfolio is therefore critical to secure the technological inventions of the Company. The Company ensures that IP team gets involved right from the planning and conceptualization stage to the final design and development of products. Over the years, the Company has developed a comprehensive IP strategy for creation and protection of long-term IP assets. The Company has been constantly undertaking patent and industrial designs filings in various international markets which reflect the Company’s focus on the global market. Currently, the Company has filed patent applications and design registrations in India, Europe, South East Asia and the U.S.A. In the coming years, the plan is to file patent applications and design registrations in new international markets to complement the expanding global reach of the product market. During the year, the Company has made 21 IP filings and so far the Company has 113 filings in India and 29 filings in foreign countries. A substantial number of Intellectual Property Rights have already been awarded to the Company in various jurisdictions.
Efficient & robust supply chain is one of the critical success factors of the Company. A well-defined purchase policy provides guidelines for procurement function covering all aspects. The emphasis is on cost control, quality, timely delivery, consistency and transparency. It provides an even playing field to the supply chain partners. The Company shares its annual business plan, market dynamics, new product development and expectations with the supplier partners. This helps them to realign their business with the Company. With growing export market, the supplier partners are encouraged to enhance their capacity so as to reduce the lead time and raise the quality standards to meet the global benchmark. In this process, the Company is working closely with the supplier partners and provides training to improve their manufacturing process and reduce rejections. There is a strong realisation and acceptance of ‘Zero defect’ and ‘Do it right the first time, every time’ concepts by the supply chain partners.
Existing supplier partners are periodically re-assessed through a third party agency in order to ensure that the quality standards are maintained and the technology is upgraded in line with the requirements. For new suppliers, well crafted qualification process is in place along with EHS requirements. All the supplier partners are governed by strict code of conduct and non-disclosure agreements.
The Company has successfully managed the input costs by value engineering in the designs and materials, developing new cost effective supplier partners and sourcing raw materials from the cost effective countries across the globe.
At TTL, products are designed, manufactured and commissioned in accordance with the international quality norms such as API, ASME, AGMA, NEMA and IEC among others.
The Company has implemented a process based approach to build quality in products & services offered to the customers.The Company is ISO 9001: 2008 certified with sound quality management system integrated throughout the organisation.
TTL ensures that its network of suppliers and dedicated sub-contractors also comply with these standards through QAPs and Standard Operating Practices to maintain comprehensive quality control of turbine and its auxiliary systems. The products also comply with CE/PED Mark Quality Certification as per European norms.
The Company has adopted Zero Defect approach to quality which is supported by tools and techniques like Visual Management system, root cause analysis followed by CAPA , DMAIC, Kaizen, QIP, SQDCM and a rigorous Customer Complaint Resolution System.
“Kaizen” movement was started in the Company in 2010 to inculcate a culture of continuous innovation and improvements throughout the organisation involving people at all levels. The movement continues to provide significant benefits in productivity, quality, cost and EHS. TTL regularly participates in All India Kaizen events organised by CI-TPM Club of India and has bagged several awards. TTL has also been consistently improving its performance in the CI-Exim Bank promoted Business Excellence award process.
The skill development effort is critical for the Company at the current juncture with its focus on the International market. TTL believes that employees are one of its most valuable assets. Therefore, employee development is crucial to Company’s realisation of its long-term mission. There is an emphasis on skilling, re-skilling and up-skilling of the employees. The Company helps its employees to keep abreast with the evolving technologies, processes and techniques. The Learning Centre contributes equally towards customer training programmes mainly in aspects of operation and maintenance of steam turbine generator islands.
In FY 15, training to employees was dedicated on the theme “Continuous Improvement”. Since TTL’s core competence rests in designing customised products as per customer’s specifications, it has started a training programme called “Design, Review, Verification & Validation Programme” for its development & engineering officers, who conceptualise, design and deliver the product. These learnings are put to use in design and manufacturing of products and services. Further, as part of Quality Improvement process, all workmen, who are directly involved in manufacturing, are periodically taken to an operational power plant, to give them exposure on the life cycle of our product. The Company also continued with “Advance Product Knowledge Up gradation” programme for its customer care engineers.
The Learning Centre in association with Supply Chain, Production Planning and Control & Quality Assurance organised training programme for all vendors and their employees under the “Supplier Quality Improvement Programme (SQIP)”, as part of ‘Continuous Improvement’ training adopted by TTL.
Computer Based product Training (CBT) module is an effective comprehensive self-learning aide on turbine technology developed by the Learning Centre. CBT module was upgraded during the year in order to cover recent changes in technology and processes.
A total of 1,930 man days were dedicated for the employees in training for the year, which is significantly higher by 18% in comparison to FY 14. Similarly, 7,458 man days of training (20% increase year on year) were provided to the Graduate Engineer Trainees before being inducted into their relevant departments.
Environmental management systems of the Company are certified in line with ISO 14001 Environmental standards. The Company is a zero discharge facility. It has elaborate processes in place for ensuring health of the people. All equipment are designed, used and maintained to ensure safety of equipment as well as the people who use it. The EHS performance is reviewed on a periodic basis and deviations are addressed through a detailed root cause analysis and corrective-preventive action methodology. Employees are regularly given training on EHS. They are also engaged in EHS through celebrations of National Safety Day functions, participation in EHS committees and conducting EHS audits.
TTL expects the economic & business environment of the country to improve in the coming year. The impact of all major economic & business friendly policies initiated by the government should start yielding results and are expected to translate into demand generation, starting of investment cycle and re-vitalisation of the domestic market. Overall economic growth coupled with industrial and manufacturing growth should drive the demand for the steam turbines. Even though, FY 15 saw a good enquiry pipeline getting built up, conversion of the same into order-finalisation depends on the signs of economic activity taking place on the ground which the Company believes should start happening in FY 16.
The Union Budget for FY 16 has recognised the urgency for infrastructure growth and a slew of measures have been introduced. A National Infrastructure and Investment Fund is proposed with a corpus of 200 billion to establish Special Purpose Vehicles that would encourage corporatisation of infrastructure projects, bring in efficiency and take them off the Government balance sheet. In addition, tax-free infrastructure bonds would be issued for the road, rail and irrigation sectors. This will have a cascading impact on the generation of demand for industrial products.
In the international market, the Company expects to strengthen its presence in many markets by focused marketing approach. Having achieved a good visibility in many markets and made in-roads into new markets, the export business during FY 16 should register good growth. However, with Euro and Japanese yen depreciating against dollar, the Company anticipate certain degree of competition in exports especially from European and Japanese manufacturers. The Company is adequately geared to face any such competition and expects to make its presence felt into many more markets across the globe. Africa being an unexploited market is also a key focus market for the Company. The Company will concentrate in entering new geographies and increasing its agent network in FY 16.
After achieving good growth in FY 15 in the aftermarket business segment, the Company is focused to grow this business both from a domestic market and international market perspective. The international structures will help the Company to achieve this objective and in the coming years, this segment should show good traction in terms of turnover and profitability.
GE Triveni Limited, a joint venture with General Electric is a subsidiary of the Company. GETL is engaged in the design, supply and service of advanced technology steam turbines with generating capacity in the range of above 30-100 MW.
GETL offers products, manufactured to international standards of quality and reliability, with best in class efficiencies. The flange to flange turbine is manufactured competitively at TTL’s Bengaluru world class facility, and the complete project is executed by GETL in accordance with GE’s procedures and processes which include certification of suppliers, adherence to environment and other standards.
GETL started FY 15 with a good carry forward order book and has achieved significantly higher turnover in the current year. Similarly, the JV also recorded net profit for the first time, which is expected to improve in the coming years.
Order booking in FY 15 was subdued due to sluggish industrial activity resulting in postponement in order finalisation. JV strengthened the marketing efforts which have resulted in the build up of a healthy enquiry pipeline. However, the delayed order finalisation has resulted in lower growth than estimated. GETL has booked orders worth 0.72 billion in FY 15. With a strong carry forward order book at the end of the year, GETL is expected to execute significantly higher orders and achieve significantly higher turnover in FY 16. The order booking in FY 16 is expected to be strong, particularly with the backlog of the previous year.
GETL will commission steam turbines for a power plant in the cement sector, a sugar co-generation plant in India and a power plant in the fertiliser sector in Indonesia in FY 16, adding to a steel plant already in commercial operation for last two years. These will improve its reference list in different sectors.
Triveni Turbine Limited
12-A, Peenya Industrial
Area, Bangalore, Karnataka
- 560 058, India