In 1977, Alcon started manufacturing axial and lug terminal type aluminium electrolytic capacitors for the Indian entertainment electronics industry. Alcon has now shifted its focus to power electronics, which includes capacitors for AC drives, UPS systems and inverters, conduction cooled capacitors for high frequency induction heating equipment and plasma generators. The company also manufactures a large range of high CV screw terminal type aluminium electrolytic capacitors and film capacitors. Its range of film capacitors includes direct mounting snubber capacitors for IGBT modules as well as axial and box type capacitors. A new range of capacitors for resonant circuits and DC link capacitors are now a part of the company’s manufacturing programme.
In addition, Alcon manufactures a large number of custom designed capacitors for windmill and solar inverters, and for defence, telecom, industrial electronics, welding and pulse magnetising equipment. Capacitors for some of these special applications often require long life, high reliability characteristics with temperature ratings up to +105°C, all of which are well taken care of by Alcon.
In a conversation with Srabani Sen of Electronics Bazaar, Anup Sachdev, managing director and chairman, Alcon Electronics of Nashik, Maharashtra, hopes that the required amount of investments will be made in the infrastructure sector to ensure that the government’s new policies are a complete success in transforming the manufacturing scenario of India.
EB: With the unveiling of the National Manufacturing Policy and the Draft National Policy on Electronics, will the manufacture of components in India get a boost?
The National Manufacturing Policy and the Draft Electronics Policy sound ambitious and if they are implemented within the timeframe envisaged, it will be most commendable. They will make a positive impact on the Indian economy since the target is to create more than 125 million jobs over 10 years. They will definitely change and transform our country into an industrial power house. I only hope that the required amount of investments will be made in the infrastructure sector to ensure that the National Manufacturing Policy and the Electronics Policy are a complete success. To ensure that Indian industry is successful and competitive, in terms of manufacturing costs, the government must find ways to reduce interest rates. This will enable industry to make extensive investments in state of the art capital equipment and will make it competitive with similar industries located elsewhere in the world.
EB: Can you share some solutions that could help India to reduce its dependence on imported components?
To increase investment in the electronics component manufacturing sector is the only way forward. However, at the current high rates of interest on capital (term loans and working capital funds), Indian industry would not be competitive with imports. In Taiwan, for example, the maximum rate of interest for long term and working capital funds is 2.8 per cent, while in China it ranges between 6.1 to 7.05 per cent. Also, land for industry must be made available at reasonable prices just like it was available some years ago in approved and developed ‘industrial areas’.
EB: What is the demand like for capacitors in India?
I can only give you data on our range of capacitors. For screw terminal electrolytics the demand is about 1.25 million capacitors per annum. For film capacitors, I am afraid I still don’t have an accurate estimate of the demand in India. For film capacitors our focus is on exports because the Indian user base for IGBT snubbers, DC link capacitors and high frequency capacitors for induction heating is still very small.
EB: Is there a good demand for Indian made capacitors in the export market? In which countries the demand is more and is there any specific reason for this?
The export market for our range of capacitors is very large. According to our estimates, even if we grow 10 times larger, our total production would be considered negligible with respect to the demand in the world market for our range of products. Countries where the demand is now huge and is still growing are China, Germany, Finland, France and South Korea, to name a few.
EB: What are the global technological trends in the capacitor market?
DC link capacitors and all types of capacitors for induction heating will witness major growth since they are energy efficient and will lead to energy conservation in the long term. However, the raw materials used in these are primarily non-ferrous metals and petroleum based products, which are subject to frequent price escalation. In this context, the trade off between energy conservation and product costs will always be a challenge.
EB: Please share some details about your new products.
We are now introducing DC link capacitors and high frequency capacitors for induction heating.
EB: What are the challenges you face while manufacturing capacitors in India?
Most of the raw materials required for our range of capacitors (aluminium electrolytic and film capacitors) are imported. We find that we need to import about 66 per cent (by value) of our raw materials. Hence, the biggest challenge is not only to procure the best quality at the best price but to anticipate the rupee conversion rate with respect to major international currencies like US dollar, Euro, Japanese Yen and so on. Maintaining reasonable stocks of raw materials is another challenge.
EB: What solutions do you suggest to resolve these challenges?
If one talks of the ‘ideal’ state of things, we would like to have all raw materials manufactured locally and at the most competitive prices. But this is obviously wishful thinking. Considering the fact that most of our raw materials are imported, clearly, high inventories need to be maintained. Hence, substantial investments (fund) are locked up for this purpose. With the high interest rates in India, we add a lot to our cost of operations because of this factor. Hence, a lower cost of working capital is necessary for the capacitor industry.
EB: Technologically, where do Indian capacitors stand in the global market?
For the range of capacitors we make, we use up-to-date technology comparable to any in the world. It is for this reason that our exports comprise about 35 per cent of our annual sales. We export to countries like the US, Germany, Italy, UK, Spain, Norway, Sweden, Denmark, South Africa, Turkey and even ‘price conscious’ China.
EB: What are your future plans? Do you intend to expand your facility?
We have been growing at the rate of about 20 per cent per year over the past three years. We expect the rate of growth will slow down this year because of the economic crisis all over the West. We plan to expand our export business to about 50 per cent of our annual sales. We are at present modernising and adding to our plant and machinery, and I expect that this process will continue. A company like ours must remain internationally competitive and up-to-date with respect to our product range, quality and price. To ensure this, continuous investments in modernisation and expansion of the manufacturing facility is essential.
