Q: Could you tell us more about ISGEC Hitachi Zosen. Why did you establish this joint venture?
Ans : Our aim was to expand the footprint of the group so that we could move up the value chain for process equipment and to increase our customer base.
Q: What factors did you consider in selecting the coastal town of Dahej as a manufacturing location?
Ans : Backed by a strong commitment by the state government, it was a rapidly developing industrial belt at that time. We have all witnessed the huge development since.
Q: How has the COVID-19 pandemic and the lockdown affected companies in the process equipment segment in India? How has ISGEC overcome the challenges?
Ans : Like the rest of the economy, this segment has also taken a hit. ISGEC is a professionally run organisation with extensive safety protocols in our routine working. Due to the pandemic, we implemented strict additional COVID-19 related protocols and we regularly monitor the precautions as well as the health of all our employees. We have helped them as much as we can.
Mr Sanjay Gulati is the Managing Director of ISGEC Hitachi Zosen Ltd (IHZL), which is a joint venture between ISGEC Heavy Engineering Ltd and Hitachi Zosen Corporation of Japan. The company is one of India’s major manufacturers of process equipment for refineries, the Fertiliser and petrochemical industries, and it has a global customer base.
Hitachi Zosen is part of the 135-year-old Hitachi Corporation based in Osaka, Japan. ISGEC has a history of 85 plus years. It is a diversified heavy engineering company with interests in process equipment, EPC for power plants, boilers, sugar plants and related machinery, air pollution control equipment, mechanical and hydraulic presses, castings, contract manufacturing and trading.
The joint venture brings together the state-of-the-art technical and engineering skills of Hitachi Zosen and the manufacturing expertise of ISGEC. It operates out of ISGEC’s manufacturing facilities at the port town of Dahej in Gujarat, India, giving it easy access to the global market.
The joint venture, with personnel from India and Japan, is actively supported by both ISGEC and Hitachi Zosen, in all its activities, including design and marketing.
Mr Gulati joined ISGEC as a bachelor trainee in 1989, having gained a Bachelor of Industrial Engineering from Devi Ahilya Vishwavidyalaya, Yamunanagar. He has since risen through the ranks and has held various important positions in the company, including as business head of ISGEC’s process equipment division. He took over as the managing director of ISGEC Hitachi Zosen Ltd in April 2012. Under Mr Gulati’s leadership, the company has grown to be a market leader in the process equipment segment.
Mr Gulati was kind enough to share his thoughts with us on his company, the current market for the process equipment industry and how he sees the future.
Q: How is your manufacturing output split between domestic and export sales?
Ans : The proportions oscillate with the market conditions in India and overseas. Having said that, we try to keep a decent composition of export and domestic revenues, as permitted by the market demand.
Q: Currently, in which countries are the project spaces that IHZL is focused on growing? What do you think about the domestic potential?
Ans : Currently, there has been a reduction in demand from almost all regions owing to low crude prices as well as deflated demand, in general, for all products. The implementation of new projects will be contingent upon the duration and intensity of this pandemic.
Q: Do you think that, in this segment, there is a likelihood that the sizes of the equipment you manufacture will get bigger since companies may want to transport completely assembled units from your manufacturing facilities? Therefore, do you see an increased demand for specialised transportation equipment, such as modular trailers, and the need for multimodal transport in India?
Ans : The government of India is already in the mood to push for multimodal transport to improve logistics while decreasing logistics costs, which at present are close to 14–16% of GDP, a very high figure compared with other developed countries and China, where it is in single digits. I feel the logistics industry should address the challenges. If the impediments in transportation can be overcome, cargo volumes are likely to rise.
Q: Do you see an increased need for coastal transportation in India? If not now, when?
Ans : I feel there is already a latent need for this given the restrictions in road transportation. However, the demand is also a function of cost and the availability of coastal transport options.
Q: What are IHZL’s growth plans?
Ans : As we all know, we are living in very uncertain times. We are proud to have earned a good name for ourselves in our journey thus far by providing cost-effective quality solutions and timely deliveries. We will continue to strive to do even better. What happens is contingent on the market conditions in the near future.