Hussain Shariyarr, Sr. Vice President & Business Head, Godrej & Boyce Mfg. Co. Ltd. in an interaction with the Industry Outlook, shares his insights on the evolving role of Process Equipment in oil & gas industry, clean energy generation and more.
The process equipment market is growing at a faster pace with substantial growth rates over the last few years. How do you see this market evolving in India? What are the major factors driving the growth of this market?
India is investing to boost domestic refining capacity to satisfy the demand for refined products and mitigate the cost of imports. India will be investing $90 Bn to boost refining capacity for fuel quality upgradation to BS-VIfuel specification. Over the next five years, the capacity expansion projects announced by all major Indian petrochemical companies will lead to a balanced supply-demand scenario for most of the major petrochemical building blocks. Given the strategic importance of petrochemical intermediates, India is striving to attain self-sufficiency by 2025.
India's refinery & petrochemical industry is gearing up for a sweeping transformation by 2030 to reduce the sector's carbon and environmental footprint. India is expected to double its refining capacity by early 2030 while the Petrochemical Sector is expected to double by 2025. Hence the opportunities for the Indian Manufacturers are abundant. The refining industry has been modernised and upgraded continuously with the indigenous and imported technologies for refining cost reduction and product upgradation
PPLC:Purchase Preferenceto the manufacturers/services providers (linked with LOCAL CONTENT). Another significant development is the introduction of the PPLC allowing only sourcing from Indian Manufacturers up to Rs. 200 Cr for PSU Projects supports and encourages the Indian Process Equipment manufacturers to promote Aatmanirbhar Bharat Initiative.
What kind of change do you see lately in the expectations of customers from manufacturers manufacturing critical process equipment for end-users in core industries? How do you meet these expectations?
Reduced Project Timelines: The overall project execution timelines have come down. Earlier the mega projects which would have a project timeline of 4-5 years are being reduced by 12-24 Months. This reduction in the project timeline has also forced us to challenge our own deliveries for critical equipment.
At Godrej & Boyce, we have a robust supply chain management process with a focus starting right from the early generation of MTOs during Design Engineering, Focus on Indigenous Sourcing, additional care during vendor selection, stricter process controls, emphasis on process improvement, employing skilled manpower, deploying high-end machines with a focus on automation to reduce manufacturing cycle, effective Project Management and reliable logistics support all form part of overall project timeline improvement.
Site Fabrication: Even though this is entirely not a change, an increasing trend for Site fabrication at the Project site is noticed. Due to the increase in sizes of the equipment and emerging challenges due to inland logistics, site fabricated process equipment or final assembly at the site becomes inevitable.
Having manufacturing facilities with self-owned sea-going jetty partly mitigates this risk, but not entirely. We have now realized this challenge and have started focusing on Site fabrication or final assembly at the site. We are also building workforce capability to handle site fabrication.
Modularization: Modular construction involves prefabricating equipment and systems into modules in a controlled manufacturing facility at Vendor Works. Once constructed, the modules are delivered to the production site where they can be installed and commissioned. This approach offers several advantages including a Shorter Project schedule due to reduced Site work, Improved Quality & Safety.
We are exploring the possibilities of deeper involvement into modularization. We have expanded our Dahej Manufacturing facility by constructing an Extended fabrication Yard mainly focused on building Large ODC equipment and Modular fabrication. This extended yard has a dedicated crane with lifting capacity up to 300 MT and height under the hook is 20 m.
How is the company positioned in the Critical Process Equipment manufacturing segment?
Started in 1976, Godrej Process Equipment has been in business for more than four decades. We manufacture the entire range of Static equipment including highlycritical Heat Exchangers, Vessels, Reactors and Columnsfor core industry segments like Oil & Gas, Petrochemicals, Chemicals & Fertilizers, Hydrogen, Power and Water around the world. To date, we have served more than 400 Customers across the globe and have catered to leading worldwide clients including End Users, EPC and Process Licensors and we have supplied more than 3000 equipment to 35 countries till date.
Since 2004, Godrej Process Equipment has been growing at a rate of more than 8% CAGR. The business is one of the world leaders in fabricating static equipment for process industries and is largely export-oriented. We have supplied critical and complex equipment across all continents. Recently, the company has commenced a new world-class manufacturing facility in Dahej, Gujarat. It expanded its footprint internationally by acquiring Yuba® &Ecolaire® licenses in the Power sector and has international offices in Tulsa & Bethlehem in the USA.
Our continuous focus on Manufacturing excellence and upgrading our Processes & facilities made us the first company in India to be accredited with the U3 Stamp. We were also the early adopters of using ESW Electroslag Strip Cladding in India. Also, we were one of the first Equipment manufacturers in India to start using the NDT Techniques like TOFD & PAUT. Our journey toward excellence has been continuous and we have also recently set up a World-class Lab setup in Dahej which is NABL accredited.
The oil & gas industry makes use of complex specialized equipment across the entire supply chain. From extraction to transportation, to refining and beyond, oil & gas operators & OEMs are challenged to engineer equipment for success across a wide range of applications. How can manufacturers help them address these challenges with their products?
Oil and gas operators and equipment manufacturers design equipment that can withstand extreme operating conditions such as high temperatures, high pressures, corrosive, and abrasive particles.Each equipment used in this industry is customized and uniquely engineered for specific requirements. Process Equipment manufacturers must rely on the Engineering prowess and know-how in the Design & Manufacturing of critical Process Equipment along with International Codes and Project specifications, acting as guidelines.
During the Design stages, we use Thermal Design to optimize the size of exchangers and Finite Element Analysis for analyzing Designs which are not addressed in Code, Special Geometries, and Transient Load Conditions & Variable Load conditions. We utilize customized fixtures based on the criticality of the job that ensures productivity and safety. For Example, the special fixture arrangement for manufacturing LABLEX ® Breechlock exchangers, Helixchanger® Exchangers, or handling any overweight jobs and complex geometries, etc.
As the process parameters become critical, exotic metallurgyis used in the Equipment. Equipment manufacturers look out for ways to improve their capability to handle challenging metallurgy. Godrej has more than 1900 qualified welding procedures including materials like Zirconium, Nickel Alloys, etc. which helps us in handling any critical metallurgy.
With increasing Project capacity, the size of the equipment has also increased substantially. Critical Process Equipment manufacturers need to have a high-end manufacturing workshop for large ODC equipment. Our Dahej Manufacturing facility is a world-class manufacturing facility appreciated by our Global clients which also has an under the hook height of 16 mtr.
Advanced NDT techniques like TOFD & PAUT are increasingly used and we are gradually moving towards avoidance of Radiographic examination of weld joints which eliminates exposure to radiation and also increases productivity. While Logistics becomes a challenge in some cases, we also propose dispatch of equipment in sections and the final assembly of the equipment at the site.
Where do you see the market for critical process equipment in the near future?
We are evidencing a trend toward Renewable energy projects including the setting up of new Solar & Wind Power Projects globally. This growth mainly will contribute to the Net-Zero targets set up by every country.
Hydrogen is emerging as an alternate fuel which could have a long term impact on the energy sources. Green Hydrogen is expected to be a future energy source; however,Blue Hydrogen can be seen as a stop-gap arrangement till Green Hydrogen becomes competitive.
In the near future, the oil and gas & Petrochemical industry will be the main core for the Critical Process Equipment. With the current trends, Demand for Oil is expected to peak around 2028 and gradually dip. Globally the overall new Grassroot projects have gradually dropped. Around 80% of Refinery projects are expected in India, Asia Pacific, and Africa. The global Petrochemical demand is expected to double by 2045 from 350,000 MT to 650,000 MT and nearly half of the projects are expected in India & Asia-Pacific region, followed by projects in the Middle East and Americas. The demand for LNG will continue to grow and is expected to peak around 2040 from 360 Mn Tonnes to 700 Mn Tonnes. LNG projects are majorly expected in North America followed by Africa & Asia Pacific.
