Established in 1981, Pune based Desai Electronics Pvt Ltd is a leading manufacturer of plastic film capacitors in India, with a turnover of Rs 370 million in 2010-11. It is the first Indian manufacturer to get UL certification for X2 capacitors. Under the guidance of its managing director, Vikram Desai, the company has become the largest manufacturer of fan regulator capacitors in India, with a 65 per cent market share. In a chat with Srabani Sen of Electronics Bazaar, Vikram Desai speaks about the potential of the Indian capacitor market and the company’s future plans.
EB: With the unveiling of the National Manufacturing Policy and the Draft National Policy on Electronics, will the manufacturing of components in India get a boost?
Manufacture of components in India will definitely get a boost with the implementation of these policies, but it depends on when and how they get implemented. India already has the capability and the technical knowhow to manufacture world class passive components (with the exception of ceramic capacitors). The implementation of these policies would eliminate the disadvantage suffered by the Indian component manufacturers and give the required incentives for investment. The government could give a kick start in many other ways to increase the demand for locally manufactured components.
EB: What do you believe will help India reduce its dependence on imported components?
Since most of the components are imported from China, our government should give incentives to Indian manufacturers, so as to maintain a level playing field in terms of cost of finance, power, land and other infrastructure. This is especially applicable for components where world standard technology already exists in India, but due to lack of investments in the installed capacity, components are imported. Plastic film capacitors are a classic example.
EB: What is the current demand for capacitors in India?
We see a demand for about 3 billion plastic film capacitors in 2012.
EB: Which sector in India do you see the demand for plastic capacitors coming from?
Major demand for plastic film capacitors comes from the lighting industry. Each CFL has between four to six capacitors, depending on the wattage of the lamp. All electronics ballasts that go into tubelights also contain four to eight plastic film capacitors each. And, for the next 5 to 10 years, CFLs would be in use on a large scale. In future, even if LED lighting replaces CFLs, they would still need a power supply, for which capacitors are required, although fewer. Other sectors generating a huge demand include automobiles, TVs, other home and office appliances, and energy meters. Telecommunications and set top boxes are emerging sectors that will significantly add to the demand for capacitors.
EB: Are you only into plastic film capacitors or do you plan to manufacture other types of capacitors as well?
Right now, we do not plan to manufacture any type of capacitor other than plastic film. These types of capacitors have good demand in India, and almost two-thirds of the requirement is still being imported. Ceramic capacitors, aluminium electrolytic capacitors, etc, are also being imported on a large scale. So there is tremendous scope for capacitor manufacturers to expand their capacities.
EB: What is the demand for Indian capacitors in the export market? In which countries is the demand more and why is it so?
India exports capacitors, but not in a big way. Major exports are by multinationals with manufacturing facilities in India. Other Indian manufacturers also export capacitors in niche markets.
The maximum demand for capacitors comes from China where most of the electronic goods are assembled.
EB: What are the global technological trends in the capacitor market, and where does India stand in relation to them?
Plastic film capacitor manufacturing is a stable technology and India is well in sync with the technological trends. India is capable of manufacturing high end capacitors, but the volumes are too low to justify manufacturing. Globally, it is expected that the capacitor market may shrink by about 5 per cent in the next five years. While on one hand, the global market for CFLs is pushing up the demand for capacitors, on the other hand, the demand from other sectors is going down.
EB: Please share some details about your new products. Technologically, how advanced are they?
Last year, Desai Electronics got UL approval for its X2 (EMI/RFI suppression) capacitors. Technologically, that puts us at par with the best available internationally. We make all types of plastic film capacitors in polyester and polypropylene dielectric. We manufacture capacitors for fan regulators, where we have almost 65 percent share of the Indian market. We offer fan regulator capacitors with safety features which are now becoming an industry standard. We manufacture capacitors for the lighting industry where we have made serious inroads. Our X2 capacitors are used in home and office appliances industry. We also manufacture capacitors for automotive and energy meter segments. We also market inductive capacitors.
We are well known for our consistent quality, reliable deliveries, competitive prices, friendly services, cost effective management and innovative designs.
EB: What challenges do you face while manufacturing capacitors in India?
While competing with the imports from China, the major challenge we face is low manufacturing capacity and price constraints. Another challenge is the need to import all raw materials because there is very little local manufacturing of the raw materials required for plastic film capacitors. This increases our manufacturing costs. Foreign exchange fluctuations also affect our business.
EB: What solutions do you suggest to resolve these problems?
The government should support the industry with incentives to offset the high cost of finance, power, land and infrastructure to enable local manufacturers to increase capacity.
EB: What are your future plans? Do you intend to expand your facility?
We have a world class facility for manufacture of 200 million capacitors per annum. We plan to double our installed capacity in 2012-13. We see a tremendous opportunity for growth in demand for capacitors in India and also for exports.
