Gyanesh Chaudhary, MD and CEO of Kolkata-based solar panel manufacturer Vikram Solar, says the company generates profit from its global operations. He says Indian OEMs (original equipment manufacturers) in the sector are suffering because of cheap imports from China. In an interview, he says the government should protect the interests of domestic manufacturers, and talks about the company’s expansion and fund raising plans.
There is a buzz that you are looking to raise funds for expansion. Can you talk about it?
We have plans to invest up to Rs 1,000 crore over three-four years to expand our module manufacturing capacity from current 0.5 GW to 2 GW by 2019. We also have plans to enter cell manufacturing and reach a capacity of 0.5 GW by 2018. In terms of revenue, we are eyeing to touch $1 billion by 2020.Vikram Solar is in talks with the governments of Rajasthan, Andhra Pradesh and Haryana to expand its panel manufacturing capacity. To fund the expansion, we might look at selling equity to either private equity funds or even the capital markets.
How was the year 2015-16 for Vikram Solar financially?
The company reported a revenue of Rs 900 crore in 2015-16, a 50 per cent jump from the sales reported a year ago. Net profit was Rs 50 crore in 2015-16. Our profit came from international operations as our Indian business is not generating profits yet.
What have been the recent projects that Vikram Solar has closed?
Vikram Solar has commissioned over 130 solar projects till date. We are currently working on some prestigious projects like 130 MW plant for NTPC in Rajasthan and 50 MW in Madhya Pradesh.
The past few months have been exciting as we completed many esteemed projects. We constructed, commissioned and installed the largest rooftop solar plant at an Indian airport. It’s a 2 MW solar plant at Netaji Subhash Chandra Bose Airport in Kolkata. We commissioned another airport project – a 750 KW plant at Calicut Airport. Some of the other projects include a 10 MW plant for SECI in Jodhpur, 46 KW rooftop in St. Xavier’s college in Kolkata and a 5 kW plant in Kalighat temple in Kolkata.
Can you discuss your expansion plans in terms of revenue and capacity?
We are working towards expanding our module manufacturing capacity from current 0.5 GW to 2 GW by 2019. We also have plans to enter cell manufacturing and reach a capacity of 0.5 GW by 2018. In terms of revenue, we are hoping to touch $1 billion by 2020.
Do you think Indian solar industry will continue to remain profitable given the recent low bidding and the SunEdison setback?
Going by the current rate of bidding, Indian solar industry cannot churn profit. There have been widespread concerns on the low bidding. But, the market has already seen correction and tariffs are expected to normalise further in a few months. What needs to be noted is that lower cost should not be synonymous with inferior quality. If that happens, it will not be healthy for India’s solar future.
Do Indian manufacturers face threat from Chinese OEMs?
Producers in China get the taxes that go into their production refunded when exported. Besides, they have a low borrowing cost of about 2 per cent, whereas it is 9-11 per cent for us. There needs to be a strict policy in place to control dumping of cheaper imports that hamper the overall quality and balance of the market. Quality standards need to be defined to ensure reliability and bankability of solar projects. The time is right for solar panel manufacturers to re-engage with the Centre and seek an anti-dumping duty.
What will be the major challenges for India to achieve 100 GW in the next 6-7 years?
A general conducive environment for solar has to be created in the country to fully realise these targets- in terms of financial incentives, encouragement to domestic manufacturing, technological know-how, low-cost business models, skill development, uniform policy and regulatory framework. In addition to this, setting up proper infrastructure, evacuation system, special incentives for solar projects, prompt and fast land allotment are also required.