-How is the Indian HVAC&R market evolving?
The evolution process in the HVAC&R industry has been slow and steady during the formative years due to taxation structure and an elitist tag attached to it.
However, the rationalisation of duty structure, increasing disposable incomes, focus on increasing efficiency & productivity et al have led to a quantum jump in air-conditioning needs & requirements from all conceivable segments.
Latest & innovative technologies are being introduced and available in the market for users to consider in their applications.
Similar domino effect is also seen in the refrigeration, albeit at a slower pace due to varied applications and target segments.
However, HVAC&R market is poised for further growth with the advent of new and innovative technologies, end user demands, challenges in refrigerant changeover, which no doubt will open up new avenues in our industry.
-What are the underlying forces that are accelerating the growth of this industry in India?
Similar to any other industry, HVAC&R industry is driven by technology, norms from regulatory agencies and demands from end user segment. Following are the major forces driving the changes viz:
- Technology: with the introduction of new technologies and push from manufacturers & consultants, few end users are keen to adopt innovative designs, which will ultimately benefit them in terms of performance & energy efficiency. Technologies like variable speed & DC compressors, oil free VFD driven compressors, EC motors, PLC based controls, BMS systems etc., have made deep inroads into day to day applications within the industry.
- Energy efficiency: With soaring energy prices, it is increasingly becoming critical to use energy efficient components and systems to reduce the overall operational costs.
- Refrigerant phase-out: India being a member and signatory of the Montreal and Kyoto protocols, has been adapting to change over to new and substitute refrigerants though at a slower pace, due to extended deadlines of the HFC refrigerants.
- Star ratings: Labelling of appliances especially for air-conditioners by BEE is a good initiative towards attaining energy efficiency norms. This should be gradually extended to refrigeration equipments to ensure overall parity in the industry.
-What are the very prominent challenges in this industry at present in India?
The challenges faced by our industry are manifold, However, below are some which are critical for the sustenance of growth in the coming years:
- Lack of skilled manpower: there is serious dearth of young engineers who want to pursue their careers in HVAC&R industry. Efforts should and are being made by corporates in association with academia to bring awareness and potential about our industry.
- Training: there is a dire need to ‘learn, unlearn & relearn’ at all levels of skilled workforce on new technologies, systems & procedures, best practices etc., to ensure optimised systems and trouble free operation.
- Standards: For air-conditioning, there are well defined governing rules from ASHRAE, ISHRAE, IGBC etc which governs major project design and execution. Unfortunately, due to diverse applications within refrigeration segment, common standards & guidelines are missing.
Efforts are being made by industry bodies to introduce guidelines & compliance thereof, which brings a sense of standardisation on project scope, design and implementation.
-How are these challenges being addressed internationally?
Industrialised and developed nations are ahead on the learning curve, and are the front runners in terms of developing and adapting to new technologies. The business modus operandi, scale and skill sets being different, Indian counterparts always have to take a leaf out of their experience and adapt that to local conditions, which hitherto is being effectively carried out by MNCs operating out of India.
-What is your opinion on the Paris agreement (COP 21)?
COP 21 is an ongoing international platform aiming to stabilise and reduce harmful effects of greenhouse gases on the environment. Climate change is a hot topic all across the globe with countries experiencing abnormal weather patterns during the past few years. India as a developing nation and a key emerging market, has been able to influence its position in the forum, and procure benefits & relaxations to the HVAC&R industry based on local needs & challenges in adopting and switch over to new technologies. We can still continue to expect time lag in adoption of new refrigerants considering shift to new technologies by industry users at large.
-What steps should be taken by the Indian HVAC&R industry to lower power consumption?
As elaborated earlier, new innovations & technologies are available in the product portfolio of various organisations, which result in overall improvement in reducing energy bills to the end user. I assume it’s the continuous joint effort from producers & consultants in educating & specifying to clients on their projects, which will garner required attention toward energy efficiency.
Secondly, in the refrigeration side of our industry, basic system norms & guidelines are critical to ensure efficiency & efficacy of the systems proposed. Steps & initiatives are already taken up by ASHRAE, ISHRAE, AAR etc to bring adherence to norms. However, adherence to norms & strict compliance to the expected is the key to success.
-What kinds of products are you providing, especially supporting the ‘Make in India’ movement?
Well, FX group has always been into import and distribution of diverse AC&R equipments, mainly from reputed European principles. The ‘Make in India’ programme initiated by the Modi government, entails start of green field projects for manufacturing or assembling considering India as a hub and potential to export to neighboring SAARC & ASEAN countries. We have informed our principals, who don’t have presence in Asia, about this golden opportunity, considering the immense potential the local market has in terms of refrigeration needs.
Considering capex investment with facility outside their home country, calls for due diligence and SWOT analysis – before they consider India as a favourable destination for local manufacturing as well as an export hub. We will have to adopt a wait & watch attitude before favourable investment comes to India.
-What kind of support is necessary from the government to boost the growth of the Indian HVAC&R industry?
The HVAC&R industry in India has grown by leaps and bounds in the past couple of decades. Air-conditioning today is no longer a luxury, but has become an absolute essential for cleaner environs and boosting productivity.
However, on the refrigeration side, and especially Cold Chain from farm to fork level, there is immense scope considering wastage of products both at production & distribution level. While immense strides have been taken in this direction both by the government and industry bodies, the scale and quantum leap in growth is yet to be observed. There is still lot of unorganised activities and standalone units, which is not still providing the necessary impetus to the segment.
Govt does provide support in terms of subsidies etc, however it has a trickle-down effect in the segment. Either there are project delays, loan approvals not forthcoming or business scale not favourable etc., which is an impediment in the growth process.
The regulatory agencies should ensure speedy process for timely project take-off, thereby ensuring overall improvement in food quality and reduction in energy consumption.
-How are you supporting phasing out of HFCs through your company’s products?
HFCs even though don’t pose any danger to the depletion of ozone layer, they are potent greenhouse gases, which affect climate change. Europe and other industrialised nation are the frontrunners in this endeavour, and already have products in their baskets suitable for natural refrigerants. Finally, availability of refrigerant both for manufacturing and service, shift from current to alternate refrigerants, the cost associated toward this transition, which technology is best suited for our localised conditions etc., are some of the contentious questions being posed by the industry. Users will drive the way industry would move forward to a cleaner and greener environment for future generations.
-What is your message to your existing and potential buyers?
I strongly believe and advocate on the following two pronged strategy:
- Long term view: many projects in cold chain are being looked at short term view, which dilutes the whole essence of the end application. This myopic approach leads to lot of heart burns when either the produce is not of the expected quality or projected returns are abysmally low.
- Total cost of ownership: today unfortunately most of the projects are executed based on capex cost. Opex cost is given a blind eye. As the idiom goes ‘penny wise, pound foolish’ approach leads to drain in resources to all stakeholders in the value chain.