From urban development to unique commercial projects and even humanitarian emergencies, Aggreko brings its expertise and equipment to any location, from the world’s busiest cities to some of the most remote places on earth. The company offers chillers, cooling towers, air-conditioners, air handling units, heat exchangers and accessories in a range of sizes for an enviable breadth of applications. Shobhit Taneja, General Manager, Aggreko India commits to outgrow Aggreko’s end-markets and hints on entering newer sectors in an exclusive chat with Supriya Oundhakar.
How has Aggreko’s Cooling business in India evolved over the years? What are the cooling solutions offered by the company?
The market in India is evolving as many industries and end users become increasingly aware of the benefits of renting cooling equipment from a specialist temperature control provider. Sectors like manufacturing, petrochemical and refining, food & beverage, pharma, fertilizers, mining, events, and facilities management are among those that have reaped the rewards of rental. When it comes to the case of mature markets, customers realise renting helps them retain their capital for much-needed operational activities, as there is no heavy investment needed for outright purchase of equipment.
They can also get their operations up and running much quicker, often within weeks or even days, which helps start generating profits earlier, and maintains production. And there is a safety aspect too. In mines, for instance, we can get temperature control equipment where it is needed fast, so miners can continue working at ambient temperatures, or to maintain their accommodation facilities. We are turnkey providers, so we take care of everything – from planning, through installation, operating, monitoring, maintenance and finally decommissioning, so we give that peace of mind. We also generate power, using a variety of available fuels, so we can also provide the power for cooling equipment, if needed. Our equipment is made to our own specifications, and owned by us, so we know exactly what it can do, which means we can create bespoke solutions for customers, based on their unique needs.
However, traditionally India has favoured outright purchase. I am sure that it will take time to change this tendency, but many are already seeing that tying up their capital and waiting months for their own equipment to arrive and then for it to perhaps spend time sitting idle and taking up space on their property, is all unnecessary.
That’s why, we have our strong cooling portfolio, and we have chillers, cooling towers, air-conditioners, air handling units, heat exchangers and accessories, in a range of sizes for an enviable breadth of applications – both in process cooling and space cooling. All are owned and operated by us. These equipment are modular and mobile, which means they are all purpose-built for rental, so it is easy to transport, and quick to install and commission. These solutions are crucial during turnarounds, seasonal spikes in temperature, performance improvement, pilot testing, maintenance outages, seasonal demands, emergency failures in permanent set-ups, early project commissioning, delay in delivery of permanent cooling equipment, etc.
Our cooling solutions for over half a century, are making us the longest running business in these services. We have strong presence in all core industrial sectors including O&G, mining, manufacturing, petro-chemicals, fertilisers and other bulk chemical manufacturing to name some. Our specialised solutions in both Temperature Control (TC) and power are suitable for all industrial segments like food and beverage, manufacturing, mining, oil and gas and events etc. Also, data centers are a current growth area where TC leads an active role.
What are the trends in the Indian rental HVACR market? What transformations have you witnessed in the cooling market over the years from a rental perspective?
The rental market in India is highly fragmented and fiercely fought though it is still at a nascent stage, with respect to the US or Europe. With many customers getting awareness on buy vs rent model, rental concept is picking-up, indeed. Also, the economic impetus by the government is at a good momentum from 2015 till now.
Due to the nascent stage, we are in, there is clearly a lack of awareness coupled with the capital equipment mentality in India which restricts the fast development of TC services in critical sectors such as petrochemical and refinery,manufacturing, commercial, construction and events. So, while these sectors possess a lot of latent demand, it takes a lot of customer education initiatives for reaping the full benefit of our TC offerings. Buy vs rent conundrum is still active in India unlike the developed world where rental options have more acceptance in general.
From our own experience of entering the India market in 2009, we could see that the acceptance of TC solution is growing year on year. The penetration is at a rather low rate given the capital equipment mentality and vast geographical spread out. However, the good news is the market is evolving at a faster pace and the buy vs. rent mindset is changing. We do not expect this to completely change favourably overnight; consistent efforts are required and it is on.
The fact that Aggreko has successfully gained long term and repeat customers gives us self-reliance that the TC services has a place in the Indian market but at the same time we are conscious that further penetration is essential at this stage of business. To illustrate a few cases where our TC capabilities were proven, are like the critical process cooling jobs in refinery and petrochemical setup, the need for augmenting the existing cooling during summer, managing capital expenditure constrains or pilot testing. Such local experience gives us the confidence that when it comes to the TC solutions a proven player like Aggreko has customers’ trust. And, as long as this need remains critical in our key sectors, we are confident that Indian market would eventually embrace the rental TC services.
Aggreko India is equipped with a comprehensive suite of air conditioners, chillers, cooling towers, air handlers etc. How do you see the demand for your products in India?
Aggreko India has always experienced steady growth in demand in tandem with the growth in the end markets. Even when economies warm down, we have stayed insulated from external economic pressures. This is partially due to a fact that when Capex approvals delays or even get postponed, rentals are largely not affected.
There are so many differentiators, many of which I have already discussed. They include our best-in-class equipment that is designed and built to fit our rental model, to our exacting standards. We own and maintain our fleet, which runs on a variety of fuels, to match the resources available in different regions, whether that is gas, diesel – including HFO – and even renewable energy sources supported by diesel. We employ and train experts in their fields, who operate and monitor our fleet. We also employ a local workforce wherever we can. We have an extensive network of depots and service centres around the world. Our people are knowledgeable and passionate about what they do and how they do it. We pay attention to detail and work in partnership with our customers to understand their business and their challenges, however unique they may be. And we never standstill, which means we are constantly innovating, bringing in new equipment and looking at way to bring power in the most cost-effective and efficient ways. All of these things have helped us become the global market leader. As far as sectors are concerned, we deal with many. We helped one of India’s leading underground coal mines with a flexible cooling package so the company could continue extraction, after high temperatures kept tripping its coal cutting shearer machines. And when a smelter company needed interim cooling towers urgently to supplement their faulty existing ones, our team worked round the clock to engineer a complete cooling tower system within eight days. Data centres are a current growth area where TC and power are needed. This sector is growing quickly and grids are struggling to keep pace with the demand for additional capacity.
What you plan for your business in 2020?
When it comes to cooling, Indian HVACR industry is about 3 billion USD currently based on our internal research. Growing infrastructure-based developments, technological advancements and increasing tourism are expected to positively influence India HVAC market over the next five years. Moreover, extreme climatic conditions, rising disposable income, growing construction activities in both commercial and residential sectors coupled with various government initiatives aimed at improving energy efficiency are some of the other major factors expected to boost India HVAC market during short term. Aggreko is already a market leader in India. In line with market growth Aggreko is expected to further consolidate its position by strengthening its business in its key sectors. Aggreko India is planning to foray into newer sectors such as data centers as well.
