Why Cheap Power Is Key To Indias Manufacturing Future Govindraj Ethiraj The Core Report

TITLE: TKBXAmfm9i0 CHANNEL: Unknown DATE: ---TRANSCRIPT--- Sugar is changing from being a sugar agri business to a biochemicals organization and that’s the mindset that I see in many promoters because we are talking about ethanol we are talking about CBG we are talking about lactic acid we are talking about sustainable aviation fuel our productivity with regards to cane we we are nowhere close to the yields that a Thailand or Australia will have so where do you see the interventions right now including from US uh TKIL

we will continue to offer the full suite of uh sugar plant equipment but equally we are working towards adding on these technology pieces. So we do offer now ethanol uh distilleries as a solution. The real success for Indian industry will only be when we can become the manufacturing factory for the world. Hi and welcome to the core report. We thank you so much for joining me today. So you know you’ve been telling me that this is a decade of industrials and we’re going to come to what TKIL is and what it was before it became TKL because most people may not know that but tell me about the decade of industrials. Well, it’s a beautiful time to be an industrial company. Uh because where we see India today uh is an economy which is the fastest growing economy and a lot of our growth will be driven by building out core infrastructure and making sure that you know our per capita consumption of various core commodities like steel, cement, power etc. clocks up because that will be essential as we ramp up our manufacturing, as we ramp up our services, as we build out a much larger economy going towards 2047. And all of that growth requires massive investments in the industrial space. So I’m personally really excited, really happy and I feel blessed to be running an industrials business at this point in time uh in the history of our country. Got it. So I’m going to come to what those areas that you focus on are and tell us a little bit about TKIL. Everyone or other people would know Tyson Crop the previous avatar of this company but it’s now uh I mean Tyson which is the German company has sold its in its stake to an Indian uh it’s Indian shareholders and moved out. So tell us a little bit about that transition. So actually it’s been a full circle for us. We started off in 1947 as an Indian entity which then uh partnered up with Buka Wolf which was a leading supplier of sugar equipment out of Germany and then we offered as an Indian entity our stake to Buka Wolf and were majority owned by Buka Wolf for many many years and built a very strong reputation with that brand in the sugar space in uh broad spaces of power and mining. and material handling and then that got acquired by crop. So we became Crop Industries India. After the merger with Tissen, we became Tissen Group Industries India. And of late in recent years, uh Tissen Group as part of their portfolio strategy uh exited from the mining business worldwide through a divestment to another entity and to a certain extent TKIL did not get divested and we became non-core because the parent mining business was no longer there within the group. So we also got divested in uh the middle of uh 2024 to the long-standing Indian shareholders and uh that’s a group of three different entities which which have been there on the board for several decades. So in many ways it was a smooth and natural transition back to Indian ownership. But I would say that journey really changed us as an organization both in the transition to German ownership and the transition afterwards. So being part of a large conglomerate really embedded a certain mindset into the DNA of the organization and really brought very sharply a focus on technology and value creation for customers for which even today we are well known and well regarded in the Indian uh market and also in markets outside of the world because we’ve been exporting for several decades all over the world. Right. and and you’ve been with the company for more than a decade yourself. In its earlier Avdar, you were in the region and then you’ve come back to India and you continue to head it today. Correct. So I joined uh Thisen Crop in 2014 as the head of strategy for APAC then became regional CEO for the region and in 2018 I was always super excited about India and uh I think the economy has been doing amazingly well. So I was very keen to come back and took over the leadership role here in uh 2018 and as MDN CEO in 2019 1st of Jan and since then we have actually grown very very well and I’m very proud of uh what all of us as a team have accomplished. Got it. So now there are four areas or five areas that you really focus on and uh that includes mining and bulk material, cement plants, sugar plants, energy and boilers and new energy. So uh let me ask you first about mining cement sugar these and and you’re really building the machines that make the stuff that we might see finally right it’s it’s it’s not stuff that people or a normal consumer might see because this is all happening somewhere far away inside factories or in distant uh uh in in distant mining locations. So what are you seeing today uh in terms of what’s happening in these sectors uh which also reflects what’s going on in the economy. So it’s a very strange situation. If you look at media in general, there’s lot of talk about uncertaintity of what’s happening in the broader global macro environment. But when it comes to the industrial space in India, actually this is an amazing time that we are seeing and it is unprecedented growth that I would say all industrials in India are looking forward to. uh if we just take the power sector for example, we are seeing massive investment both on the green side as well as on the conventional side, we are talking about 80 gawatt of thermal power and that comes with consequential investments also on the mining side for coal. If you look at the steel sector, we are talking about more than doubling steel capacity in India. So that comes with investments in iron or mining and the entire ecosystem. uh along with that similarly in sugar we are all aware of the ethanol story and that really transformed the nature of the sector from being a lossmaking industry to being highly profitable and we are now going beyond E20 and talking about E85 E00 yeah we we’ve just launched or seen the launch of an E00 car correct I don’t know where the fuel for that is going to be but there is a car sugar is changing from being a sugar agri business to a biochemicals organization ation and that’s the mindset that I see in many promoters because we are talking about ethanol, we talking about CBG, we talking about lactic acid, we are talking about sustainable aviation fuel. So it’s no longer about a commodity that leads to you know sugar problems or diabetes. So we are talking about a commodity that can really be transformational for industrials right and really also move the needle from uh you know natural resources becoming green sustainable in hard to abate sectors. So we we are going to see that journey continue to play out and India is one of the largest producers of sugar. I mean we are as big as uh Brazil and many people don’t realize it given the scale and size of our industry and I’m going to come to sugar in a moment but uh in the areas that you’ve just talked about what’s your largest uh pie or piece of the pie so today it’s dynamic but as of today as things stand the mining and material handling business is the biggest piece of what we do and within that as I mentioned we are seeing tremendous opportunities And we are one of the leaders in coal handling plants and as I mentioned 80 gawatt of thermal capacity is really uh making the market explode. So there’s more business than anybody in the industry. So you’re uh and and you said that you’re also uh benefiting from the growth in thermal power capacity. So in thermal power plants what all do you do? Yeah. So within thermal power plants there’s the coal handling unit which uh all the inbound thermal coal that comes in has to be processed has to be stored uh has to be fed into the silo. It’s one of the largest and most complex units in a thermal power plant. So we are one of the leaders if not the leader in that space in the country. But also of late we’ve stepped up and we have started offering the full BOP package. So there are two pieces in a power plant. There’s the boiler turbine generator section and then there’s everything else which is called balance of plant. So we have consolidated a whole bunch of packages of which coal handling is the largest piece and we are offering that as one consolidated offering where we’ve got the first couple of orders as well is large orders and we continue to you know progress in that space. And how is that different from what you would have done let’s say 10 years ago? So 10 years ago, I would say we were a little shy to get into full-blown EPC. We were more focused on the product. uh and uh today I would say in contrast we are focused on what the customer needs and we are more flexible especially with the new ownership structure to to cast ourselves in a way that it’s value creating for the customer reducing their risk enabling them uh to execute faster and also for us to be able to dynamically manage all these pieces and high complexity in execution and deliver a seamless this package. So in a way it’s win-win for both sides. The customer gets a reliable partner in their journey and for us it is a significant enhancement in our scope and scale of business. Correct. Uh so the boiler part but you also make boilers. We make captive power boilers. So up to 150 megawatt. So we are not in the superc critical boilers. So your boilers are not in power plants, not in the large thermal power plants, but if you have something up to 150 megawatt, we are actually market leaders or one of the key players in the CFBC boiler space which is a specialized boiler for complex fuels and uh there we are the only Indian player to have our own technology. So and when you say complex fuels you mean so low calorific value fuels of course we can do all the traditional coal and ligignite and petco etc but also we can do washery rejects for example there’s a certain amount of uh biomass blending that we can do so we offer a a CFBC technology offers a lot of flexibility while ensuring good environmental outcomes you know so in a I’m just sticking to power So uh in in a power plant let’s say some of the newer power plants that are coming up what would be your share be of the plant in terms of let’s say work and maybe value. So in terms of work we would be really you know the boiler and turbine package is fairly concentrated. The BP is spread out. So we are really covering a large part of the plant in terms of civil work in terms of erection and so on and so forth. In terms of value, I would say the BOP package would be anywhere between 25 to 30%. Depend on depending on how it is structured. So certain things can be clubed with the boiler package and some may not be clubed. So depending on that it could be as high as even 40% in some cases. And those are contracts that you are presently working on. Yes. Right. In various forms. Okay. So let me come back to the mines now. So what’s changed in a mine? I mean, we all have images of what mines look like and you know, they’re fairly I’m assuming the technology or some parts of it go back maybe even centuries, but what’s changed? A lot and not a lot. So, let me contextualize that for you. So, firstly, mining is one of the largest emitters globally of greenhouse gas greenhouse gases. So, we are at in the range of 7 to 8%. And a lot of it is driven by the way mining is done. Especially in India, we have a lot of truck and shovel based mining approaches. Now the future of mining is actually input crushing and conveying and greater mechanization because not only does it you know allow you to improve efficiency but also it allows you to electrify the operations and move out of diesel. And when you electrify you definitely have the opportunity to have green power or whatever power that you can source. And if you are in a situation where you also have a cold washery then you could actually take those washery rejects which are an environmental hazard at that point in time and convert power out of that and run the whole operation in a self-contained mode. Uh to give you some perspective when you take a truck uh and you move it from point A to B when it comes back from B to A it’s empty. So your overall operational efficiency is nothing more than 30 35%. Otherwise you’re moving the dead weight of the truck or an empty truck back and forth. If you have a conveyor that efficiency goes up to 80%. So it is much more efficient from a power consumption or power or fuel consumption perspective. And equally as I said if you’re electrified you can really make it green. So definitely that’s one area where we see a lot of possibilities uh with regards to the future and also uh there are new trends in terms of blast free mining. So we are already uh partnering with Noen and Witkowitz in the Czech Republic to offer a special machine for with certain cutting forces you can actually eliminate blasting in certain situations entirely. So which makes it very very exciting because blasting is one of the limiting factors because every time you do blasting you have to shut down other parts of the operation and also you have to be very conscious of habitation and not impact adversely those around you. Whereas if you have blastree mining you can actually run a seamless operation and is that happening in other parts of the world right now or even in India for that matter? So in India we have continuous mining in naval where we have a lot of bucket field excavators shiftable conveyors and I think that they were one of the earliest movers in this uh regard but that’s with lingite I think we have a lot of catching up to do on the conventional coal mining side and open pit mining side and bear in mind I think once you bring technology into mining operation you would have seen in the press every time we have monsoon there’s a 20 30% dip in coal production and then suddenly you have these news about this thermal plant has only 2 days of coal supply left and we could have a power outage. All these kinds of stories come out. But if you have uh technologydriven mining, you could have sustained operations, hazard-free operations, safer operations, same throughput no matter the weather and the conditions. And so actually your ability to sustain and get better economics from the mining setup goes up dramatically. So that’s interesting. So uh I know that India has fairly good coal reserves. So that’s not a problem. We have the coal. So what you’re saying like when we for example experience shortages at the thermal power plants, the reason is not because we’ve run out of coal but we are sort of falling short in our ability to mine it efficiently. See I mean if you have a heavy monsoon shower at a mine, your speed of truck movement goes down dramatically. In some cases has to be shut down for safety reasons. And these are right reasons. But if you have a conveyor based inpit crushing solution then irrespective of the weather you can continue moving your material out of the mine. Right. Okay. Let me come to sugar because sugar and ethanol and and and it’s the the example or the phrase you use is biochemicals. Do not think of it as something you put in your Yeah. something you put in your tea but think of it as a biochemical industry. So what does that mean in terms of what’s going in? I mean I visited a sugar plant maybe uh about eight or nine months ago. I think this was offseason but it was fairly primitive. I mean from whatever I could see but I didn’t see the distillery side of things and there was one next door but I’m I’m sure a lot has changed within that. So it’s one space where I feel there’s a lot of disruption waiting to happen both on the downstream side and the upstream side. To put it in context, when you look at our productivity with regards to cane, we we are nowhere close to the yields that a Thailand or Australia will have. So there’s a huge potential for us to improve yields and get more cane and more production by that’s on the farming side. That’s on the farming side. Equally, our process of getting cane is again truck based. Yeah. And very inefficient. Yeah, I mean they all come and dump it in one big thing. And yeah, I see. So the more the cane stays without, you know, the more the time between harvesting and crushing of the cane, the more losses you have because the cane gets drier and drier after it’s been cut. Typically in mature best-in-class operations, you would have cut to crush in hours. Our cut to crush is in days. So imagine the amount of sugar we are losing because of this inefficiency. So that’s the upstream side and and there’s some but there’s a regulatory angle in that as well right I mean not really I think to whom farmers can come and who to whom they can sell you have a designated farm now you have to be efficient in moving your cane from the farm to the mill if you’re going to take days you’re going to lose sugar in between because the cane is drying out so there’s a massive opportunity there in unlocking value on the other side on the downstream side it’s equally really incredible what can happen once you have a sugar plant with you. Uh because as I said I think we’ve all seen the ethanol story but the rest of it is just unfolding as we speak. So CBG I think is a definitely a growing space and we will see a lot of action in that space. You’re talking biompressed bio gas. Yes. Yeah. But why why would you link that to sugar? So because with sugar waste you can actually feed it into a CBG plant. But there are other equally or perhaps even more value adding paths where if you go down the path of lactic acid then you’re getting into bioplastics with polyactic acids and significantly enhancing the value you can generate. Uh if you go down the path of SAF which is sustainable aviation fuel and by the way the world has mandated including India that we going to start blending and we are producing some SAF here and there. Yeah hardly anyway. I mean it’s like a drop in an ocean. it doesn’t move the needle but the real disruption will happen when we get more and more of such units to start producing SAF comparatively. So the UCO route is uh you will never get the volumes you need via the UCO route, right? But there are the UCO route used cooking oil. Okay? Because our uh you know our sweet shops will never give you the restaurants want to exploit the you know uh cooking oil till whatever time. uh but definitely this allows us to produce SF at scale and that’s where we have to work towards uh as an industry and as an as a country to bring that into the equation and with that I think not only profitability will go up dramatically for the sugar mills but also the sustainability quotient and the impact we will have from a crude imports perspective will you know start moving the needle right so you talked about uh one is of course the the time that’s uh uh it takes to bring the cane or the cut cane to the factory uh and then it gets crushed. Uh so where do you see the interventions right now including from US uh TKIL? So we will of course be more focused on the technology side we have been a very prominent post crashing post crashing so right from receiving the cane onwards. So once the cane is unloaded we have the cane unloaders and there on we take it and make the whole sugar. So you make the cane and lotus as well. We do that as well. Okay. So of course we will continue to offer the full suite of uh sugar plant equipment but equally we are working towards adding on these technology pieces. So we do offer now ethanol uh distilleries as a solution. We offer CBG through our partners and we are very close to active collaborations for lactic acid and uh SAF which will be in the market very soon. So with that I think we will be able to demonstrate a path a very viable and economically attractive path to sugar mills to really become these biochemical hubs. Right. So today obviously a lot of sugar factories are producing ethanol as well and there are distilleries alongside or they transport them to distilleries. So where are the gaps that you’re seeing? I mean I’m talking about the big gaps that you’re seeing today and would your uh work involve retrofitting or building new or how would that go? Well actually I think the wave one of the story has played out today. We are in an environment where we are over supplied with ethanol. So it’s really uh important to get into E85, E00 and get the flex fuel vehicles into the road because once we have the demand side sorted then I think again we will come back to the supply side with the sugar mills and build out the next phase of growth with uh ethanol and that will also be good because it’s going to be green fuels that we will have on the roads which is produced in India. I mean you don’t have to import the code. uh so I’m really excited and very positive and bullish about what’s going to happen over the next 2 or 3 years and uh that will be very disruptive also uh for the sugar sector but also in the transportation and and uh given our sugar capac just to sort of add to that again I mean given our current sugar capacity uh and our ethanol output capacity uh while you’re saying that there is an over supply of sorts uh the technology to go further downstream does not exist exist or only exist in some places. So we are we are fully prepared. So we are just waiting on what I when I say exist I mean functioning in sugar plants in India today. Oh yes. So you know we can definitely uh add more capacity on because you said SAF is still very small. Uh CBG of course we I know that we’re doing a fair bit correct and lactic acid I’m not sure. Yeah. So lactic acid is just in its very nent phases. So is SAF. But these are the industries of the future. Over the next decade, you will hear a lot about both of these and that will be as I said very transformational for the sector. But equally what I’m saying is we are at the cusp of a wave two in ethanol as well once we have a robust uh pool of you know flex fuel vehicles which can take E85 E00. So if I were to ask you to take a step back now and you know when you look at this all of this playing out as an energy spectrum uh where do you see the the big action and what can we or how should we be guiding this from a policy point of view? So the energy uses converging in in one way or the other. I mean I could be using uh uh induction cooking which is electricity or I could be using gas which could be either LNG or LPG. One comes from a refinary, one comes from an oil field. Correct. I think the energy mix in India is going to get very interesting from a source of energy perspective. So of course you know we we have the traditional spaces we’ve talked about coal thermal power we have uh solar and wind which are well established but equally we are moving towards coal gasification. So you will have gas coming out from coal fields which will feed into fertilizers and various other industries. uh you will have green hydrogen definitely in the mix and that is a space which is also going to see explosive growth and equally we are talking about significant nuclear capacity so with SMRs and uh large nuclear plants so this mix is that an area you’re in we are also looking at that space we’re looking at that space I I have nothing to share at present but we are in conversations so all of this mix is really you know projecting a very very vibrant ecosystem with diversity in sources and also a very good combination of base load power versus fluctuating power that we see from solar and wind and that’s important to have that mix to balance your grid as well. So I do see this will be a beautiful 10 15 20 years ahead given the mix of technologies and the possibilities that we but which are the areas that need the nudges uh whether it’s a policy nudge or a capex nudge I mean if we are to you know I mean the fact is uh as we speak we’ve hit peak power demand at 270 gaw and that was what we had of course projected but it’s clearly straining the grid and we don’t have enough evening power we have enough or surplus daytime power so things are not still fully in place or the way we should we would hope it to be well few things one is I see demand as a very selfcreated number you know if manufacturing went from 13% to 26% as share of GDP that demand will suddenly zoom up the important thing is to provide power at competitive rates to industry so if we offer it at three and a half 4 rupees you will see a lot of power intensive industries suddenly becoming very competitive out of India and that will then boost demand as well as economic output for India and outside India. So demand I don’t worry about I think that will come up as the supply is robust and competitively priced. Now on the supply side to your point on what needs the nunch definitely one area where I see a lot of possibilities is green hydrogen already if you see the pricing trend we’ve gone from talking about 500 rupees to 400 rupees to I think the latest bid we’ve hit is around 275 rupees and by the way through our PCR technology we are able to offer the lowest price as well. So what I’ve been trying to tell everyone is that it’s a chicken and egg story in green hydrogen. On the one hand you don’t have enough green hydrogen or hydrogen as a fuel and on the other side because the fuel is not there the usage of hydrogen is not picking up. So my suggestion and I’ve put this before various policy players is you know your cost of green hydrogen is high because your RTC cost is high. Round the clock green power is costing you around 4.6 6 rupees a unit. Whereas if you look at um off the grid if we can offer RTC at 3 rupees or 4 rupees then suddenly uh you will have much more competitively priced gray hydrogen. Some part may be green, some part may be gray but it will give you a critical mass of hydrogen supply which can then be used to trigger an ecosystem of hydrogen vehicles. We’ve just launched uh a green hydrogen train or a hydrogen powered train. We have hydrogen powered buses which the OEMs are now ready to offer into the market. But we need more fuel in the market, right? So let’s worry about green as step two. Let’s first make sure that we have the pumps where hydrogen can be delivered. We have a supply chain which is feeding that hydrogen in. And then it’s an easy switch to move from gray to green. Got it. But uh what’s the pathway looking like this? I mean we are currently building let’s say EV charging stations and while we’re obviously achieving some momentum we’re still lagging what we think we need to achieve much higher levels of electrification or comparable to let’s say some European countries even proportionately. So where I mean how would you then uh allocate resources if you had to between you’ve talked about ethanol, you’ve talked about hydrogen now and of course we’ve got electrification which itself is growing. Well it’s it’s a question of strategic priorities. The biggest challenge I see with the EV ecosystem is that for batteries you’re dependent on a very limited set of countries who will supply the batteries to you. And that I think is as a country of India size and scale. I mean if we were a tiny country of 10 million people I would say who cares but we are a large country and we can’t have absolute dependence or significant dependence on one particular geography or country for our supply of batteries. That’s never a good thing. And to build an entire industrial ecosystem with that premise is a very risky bet because it’s the same kind of exposure we had on crude and now here we are with a major supply 90% exposure. Yeah. Right. So I’m more bullish on going down the ethanol route for transport, going down the green hydrogen route for transport because it is something that we do out of India and it is a supply chain and ecosystem that we can control and build out ourselves and we self-reliant and India as a geography has huge potential. Imagine if we have a thriving green hydrogen ecosystem there is tremendous export potential. Let’s try and imagine a country like India exporting green hydrogen to the world from being a net power importer to being a net power exporter or fuel exporter. That will be a paradigm shift for inhibiting factors is cost isn’t it? I mean whether it’s for uh hydrogen or for ethanol for that matter. It’s not clear if I’m going to be running E00 cars what is the cost of fuel going to be versus it’s a very mileage conscious country as we know. Yeah. Yeah. We are mileage conscious but I think we have to look at the bigger picture. Because when you buy crude or when you buy a battery, a certain part of the value is outside the country. Now if you are doing ethanol, you’re actually helping the farmer to begin with. You’re helping helping your own industrial ecosystem. all that uh economic output is resident in the country that is generating employment that is generating uh positive uh impact on the local economy and I think somewhere we’ll have to and of course the balance of payment side of it as well you’re not buying with dollars or some other currency in an international market so I think the strategic aspect is equally compelling and the cost will come down with scale but and you’re saying that we subsidize like for example example hydrogen I know maybe more people would be wanting to produce it if they could afford to so I mean so let me give you the economics of it uh there’s a commercially available car the mai which runs on a 5 kg tank for let’s say more than 500 km I think the latest generation does even much better I mean I sat in a hydrogen car in Scandinavia I think yeah so I mean I’m talking about the first generation right so you’re doing about 1 kg does 100 km So let’s say 1 kg of green hydrogen costs you 450 rupees. The latest is 275 rupees a kg. So at 450 you’re 42 rupees a kilometer. What’s the cost of per kilometer with diesel? You’re talking about 9 or 10 rupees. Even if I take the taxes out, you’re just about at par with you know even if taxes are 50%. No, but I I think on the consumer side I think it makes sense. What I’m saying is economically you’re viable today from a consu consumer’s point of view. uh I’m asking from a producers point of view when you say 275 rupees per kilogram what is the capital cost and scale at which you’re producing that and are and how many companies in India can or are affording to do that so that’s what I’m saying if I don’t know the answer no you it’s a very valid question and what I’m saying is we have to start somewhere you can’t say that I don’t have the manufacturing capacity today and therefore I will not do it rather I would say here’s is how much we are going to do and then I can guarantee you there will be dozens of players who will set up enough capacity to feed the demand but today you don’t even have the hydrogen cars who are going to consume it and that’s the first excuse for saying what will we do with all this green hydrogen right or hydrogen in general no maybe I mean in the context of electric for example Marauti was a late entrant into electric or Suzuki was a late entrance because they felt that India is still a uh let’s say fossil fuel or petrol-based economy but they’ve changed their mind and they’ve launched electric now because they can see the ecosystem now building up and maybe there are incentives as well but let me come to uh uh the cost of power and you that’s an interesting point just to close the point on that it’s also a very urban thing but India is vast as a economy I mean you will never be able to build out very quickly charging a charging infrastructure which covers the length and span of the country I mean And what would be the issue? I mean everybody has range anxiety. Yeah. You drive out of Delhi or Bombay and then you’re suddenly scared you know where you’re going to get your car charged. That’s the reality today. Hopefully it changes in the coming years. Got it. So uh you made an interesting point about the cost of power. You said that if we were if we could let’s say reduce the cost of power to industry by 1/3. Your argument is that everything can change. the entire dynamics of production, scale, exports, everything can change. Absolutely. And I believe that very very strongly. If we were to make a list of industry in India today, many of my customers I visit I ask what’s your cost of power? Very often I get the answer it’s 8 rupees or even 12 rupees and that is insane because cost of captive power generation is uh three and a half rupees, four rupees if you’re a little careless. So that’s a straight out 50% or 60% reduction in your cost of power. Who wouldn’t want that? And what would be the impact of that on your economics? And equally, I think if we are to move the needle on our share of manufacturing from 12 to 13%. We’ve done something really amazing with the FDAs. We’ve really created a path to those markets. But then we also have to realize it’s not just tariff avoidance that will get us there. We also have to have a move uh towards uh quality which the industry has to work on and equally we have to look at factor costs. So power should be the most competitive in India. Steel should be the most competitive in India. Your raw materials should be most competitive in India and skilled manpower to be able to do it. And that’s where a lot of focus needs to come in. Now having opened up the path to markets power which is 2x 3x of what it should be makes no sense. If you look at steel uh we have very limited production of uh steel sections or forms which meet uh or comply to European or US norms unlike China which uh which has a lot of steel according to those norms. So standards I mean we make to Indian standards and I don’t know why do we have to have uh we can have an Indian standard but it can be made consistent with European and US standard to allow us to have rebranding and rebadging based on the demands of the industry. But that sounds like a simple fix or sometimes the simple things are the hardest to fix and for some strange reason nobody is focusing on that. Okay, because we have not really re-imagined ourselves as an export powerhouse. Our policy and framework was designed to protect India from imports and therefore we created standards which the others would find difficult to match and push into India. But the current economic environment and policy thrust has changed. We want to be competitive going out and therefore we must make sure that raw material availability in India is competitive and consistent with quality standards that match global standards because you can’t expect a theme to source competitively out of Europe or China when an Indian supplier with standards could easily supply that to him and I mean that’s the power question once again. So obviously I think and you mentioned this earlier as wellmemes cannot access or cannot set up captive power. They have to access grid power. They are the guys who are going to be paying the most all the time. But the large guys obviously even traditionally have set up captive. Every steel plant sets up a captive uh power plant as well. Data centers today will set up power captive including in renewables. So could that balance be uh I mean could there be some balancing out that’s happening or you feel that the gap is still too large and grid power is really going to be I mean the cost of grid power is what’s holding us back it is definitely holding us back and also reliability of that powers cost and reliability both I mean why should anyone have captive power if you have low cost high quality grid power the whole issue is we don’t have it so I’m a strong voter for that but as a government one thing thing that could be done is when you are building out these industrial parks is to put a lowc cost power unit there and say it will generate for the ecosystem for the industrial ecosystem that we’re establishing and it will sell at a fair price and not you know trying to cross subsidize one segment and inflating the cost for industry because ultimately that hurts the economy. So we should aim for the lowest and most competitive cost of power for Indian industry and that should be a mission mode exercise and also as I said you know all the other factor costs we should try to clean up but this is something that you feel is maybe easier to very doable compared to other things which will be a slow burn or a slower burn unfortunately we don’t have the luxury of time I was just reading something in the says that you know the demographic dividend for India will start flattening out after 2040. We are talking about 14 15 years and that’s important to not waste time thinking about these issues. We just have to roll up our sleeves and get it done at light speed. Got it. Uh last few questions. So this is really looking ahead and I I want to split this into two parts. Uh you’ve talked about all the industries you work in. uh we didn’t touch upon cement as such because that’s also another energy guzzling industry but also growing industry and and growing industry and uh but and but that’s a localized industry you can’t import cement and neither can you export cement you have to produce and consume in some cases can be done uh exports or imports both okay but we’re not seeing much of that right now because we need a lot of it in India got it so uh how are you seeing uh the the outlook for broadly for manu ufacturing in the context of the factors of production that we are in control of or not so much in control of and what are the some of the uh risks or the downsides that we could be or focusing on or should be focusing on. That’s on one end. Second is u uh you said you talked about skills. How do you make this whole sector or uh this whole uh area more interesting and exciting for all these engineers who are going to be in any case maybe looking for alternatives thanks to AI and so on. So both are very interesting questions and I’m very passionate about both of them. So firstly you know when we look at the demand side of it I think India is at a absolute sweet spot given the kind of growth that we are seeing and the sustained and expected growth momentum we will see over the next 10 15 20 years in the country. So we are really blessed as Indians to be living in this part or this phase of India’s economic growth because that’ll benefit everyone. But the the challenge here is that if we are not focusing on competitiveness, if we are not focusing on quality, we will create products that will serve the Indian market but will fail to measure up when we want to export. And the real success for Indian industry will only be when we can become the manufacturing factory for the world. And that has to be the aspiration. And sometimes I feel the robust Indian market makes people complacent. So we really need to say and force ourselves to say that yes India is going to be great but we want to make sure I am selling 20 30 40% of my production internationally so that I am benchmarked against the best in technology. I’m ex accepted and regarded with regards to quality and competitiveness. Unless we do that, we are also doing a disservice to our Indian economy because we’ll be selling poor quality stuff at high prices just because we are on a protected island that doesn’t help even the Indian like for example two wheeler manufacturers have a good mix uh of exports and and so similarly with four-wheelers as well correct and I’m coming from a very capital goods perspective right so the machine manufacturers the hardcore capital goods industry needs to really you know tune So that I think is really the challenge because a large domestic market which is quite comfortable and you you know people outside may struggle to compete for various reasons of market access, understanding of the market etc. makes people complacent and that is really the risk that I see for the Indian economy. Second, I think we really have to look very very hard. 12 13% of uh GDP is nothing to be proud of. We really have to build the muscle in manufacturing and put it at 25 even 30% of GDP and that will be truly transformational for our country if we achieve that and we have no choice. We must do it because without that I don’t see us becoming a developed country. So that really has to be an important part of it. Now coming to why people should come to this industry. I think we’ve done a tremendous disservice in how we have gone about representing ourselves on campuses. Uh we’ve had a situation where even civil, mechanical, all the classical skilled engineers who are going down the IT path for a better better future. But today I would say this is one of the most exciting spaces. You’re looking at multi-deadal growth. You’re looking at cutting edge technology. you have the responsibility to make the world green and achieve help India achieve net zero by 2070 and uh you have Indian manufacturers trying to go outside and conquer the world uh I would say this is the most exciting part of the world today uh from from an economic and personal career perspective and and you would say for example you know when I look at let’s say when a young engineer maybe looks at China there’s robotics happening there is uh AI physical AI happening So you I mean I’m sure we are also seeing parts of that in India today but those are the things maybe which will excite people uh in that generation. So do you see those kind of opportunities and where if so? Absolutely. And I think the the success in the future will be for those in our you know we I sometimes I say we are still living in a dinosaur age in terms of you know what we are doing but the real success will come to those who adopt AI who adopt robotics who really go up the technology and innovation curve and try and disrupt conventional industrial stereotypes and that’s where I think it becomes really exciting when people think about careers and opportunities and uh I believe it’s going to happen more and more in India because given the way we are growing some of the smaller and midsize companies will also scale up and we’ll then have the financial muscle to start doing these things right and just to sort of yeah go ahead so I’m quite optimistic right no so just to round up and we started talking about mines uh and mines is as you said some things have changed and some things have obviously not and maybe for centuries but that’s also an area where there’s a lot of let’s say autonomous vehicles and uh and I’m sure application of AI as well. So I don’t know if you want to want to share some thoughts on you know how the sort of the oldest kind of uh kind of manufacturing is also seeing maybe the most contemporary input. Absolutely. I think we should see what Australia has done with autonomous mining. uh they have autonomous trains. So they have really gone up to a level of technology adoption which no one could have imagined 10 15 20 years ago and that could be a very interesting template but where I think India has to find the right balances between employment and also you know uh bringing technology into it. So where it comes to safety, quality, productivity, definitely technology should come in but we also have a social obligation to make sure we generate jobs and so we have to find our own balance. I don’t think uh copy paste will work. We have to look at the Indian context and make sure that we are adopting technology and yet using people and skills to compensate. Uh and that actually is an advantage because Australia had to do it because they didn’t have enough labor but we do have a lot of people. So we can actually have a greater degree of freedom as we adopt technology. Right. Right. That’s a good note to end on. Vic, thank you so much for joining me. Such a pleasure. Thanks for having me. Go in Q. Love the conversation. Thank you.