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Interview

with B. Prasad and A, Chairman & co-founder, Basheeruddin, Furnace Fabrica (India) ltd

20.09.2011 / Energyboardroom

Mr Basheeruddin and Mr Prasad, you have co-founded Furnace Fabrica in 1974. What have been the key milestones in the company’s development since its establishment?

The company was established in 1974 by Doctor Prasad and me, and it was a privately held limited company until 1994. Initially, we were mostly in fertilizers and ferrous and non-ferrous areas. We started to invest in the oil and gas (O&G) industry only in the late 1990s.
Today, we are targeting India as well as the Gulf Region. We have operations in Saudi Arabia, in Qatar and in Morocco. We also have Indian contracts signed with Tunisia, Turkey, the Congo and Zambia.
Looking at the order book, 40 percent of our contracts come from India and 60 percent outside of India.

Our Associate Companies (Controlled Subsidiaries) are :
 Pacific Refractories Ltd
– Established in 1994 with works in Bhilwara (Rajasthan, India) with technical collaboration from Premier Refractories Inc., USA
– Has full fledged production, testing and R&D facilities for various grades of Insulation Bricks, High Alumina Castables, Low Cement Castables, Ramming Masses and High Strength Mortars among other products
– Acquired another refractory unit in Wankaner (Gujarat), India with the view to expanding its production base for Fire/Insulation bricks to cater to the emand in the market
– Developed/produced several indigenous refractory products which were being imported into India
– Application in industries like Cement, Iron & steel, Petrochemicals, Fertilizers, Refineries etc..
– Key feature is that we can design and supply the refractory as per the requirement.

 Polyceramic Industries Pvt. Ltd.
– Established in 1986 with works in Panvel (Maharashtra), India
– Manufacturer of complete range of chemical resistant cements and refractory products
– Offers corrosion protection solutions to core industries in India and abroad
– Key supplier to our turnkey Sulphuric Acid Plant offerings

What is the importance of O&G for the company?

Today our interest in O&G is in a particular field. We are looking for jobs in various sectors – EPC contracts, sometimes concession contracts. We have today more than 500 engineers in our company. Apart from the Mumbai head office, we also have offices in Kochi and in New Delhi.

How has the company absorbed the economic crisis in the last couple of years and how have you performed lately?

By the grace of god there were no issues for us with regards to what was happening elsewhere in the world. We had only been slightly affected by the foreign exchange fluctuations as our operations are both international and Indian. We have incoming and outgoing money but there was no significant impact from the world economic recession on our business.
In India we have queries coming in and we are involved in various projects. Even today, we had just received an order from Jaipur, in Rajasthan, for a zinc plant.

In India do you see international presence as a threat or opportunity specifically in EPC?

We do not see international competition as a threat. By coming here, international companies are bringing something, such as money or technology.
In India, people believe only in the contracts. For anyone coming to India, there will not be let down; there will always be a job to do.
Our culture in India has always been to invite people to come and work. We are open also because it helps us in turn.

In the downstream sector, even though India is already contributing to 4% of the world refining capacity, players are adding refining capacity to develop India as a world refining hub. What are the implications for FFIL?

We look forward to finding more and more avenues in the days to come because of the increased expansion. The sector is booming and we look forward to a good future in the oil sector area for us.
In addition to this, we are one of the few international companies with experience in dismantling refineries for reconstruction, not for scrapping. We are able to dismantle, rebuild, and also expand refineries. Our capacity is unique in that respect.

Being an Indian company, does that help in establishing a strong relationship with the PSUs?

It makes no difference for the PSUs whether you are Indian or foreign; all that matters is what you bring to the table.

How are you establishing yourself as the partner of choice for projects happening in oil and gas?

We successfully completed expansion projects for Hindustan Petroleum Corporation Limited (HPCL). Now we are executing a sulphur recovery unit for the same client.
We are looking forward to the expansion plans of BPCL. Mr R.K. Singh, C&MD of BPCL said in his interview on behalf of BPCL that they are going to expand the Bombay refinery. We expect to get a major chunk of the business from that refinery. We completed the expansion plans of the Haldia refinery as well. In fact, we were the first company to build the second hydrogen reformer at the Indian Oil Corporation refinery, with a capacity of 94.62 MMKCal/HR.

We are also working for the Paradip refinery, for three acid coolers with anodic protection design. Many companies will find it difficult to meet the stringent requirements. There were only two bidders. One was from America and we were the second. We beat them out on the price, which is often one of the main criteria in India, considering it is a highly price-sensitive market.
We have also been qualified by the Nuclear Power Corporation, and amongst 23 companies we were one of the few to pre-qualify. So we are looking for major business in the nuclear power sector as well.

Furnace Fabrica India Limited (FFIL) has its own fabrication facilities since 1994, and has also more recently added Begg-Cousland ltd. UK, to your empire. To what percentage of your capacity are you operating? What does the order book look like at the moment and how is this affecting your expansion strategy in terms of capacity?

As you see we are only a medium scale company. Our expectation of growth is definite. We have established a large fabrication shop – about a 15,000 square meter area built – in the port of Kandla. We can import anything and export anything freely, and we can also compete with international bidders. Recently we acquired Beggs-Cousland ltd.UK, a pioneer in filters, demisters, Johnsons screens etc. For Indian Market, we are setting up state of the art workshop at Talaoja, Navi Mumbai.

We also have a tie-up with Alstom Energy in Germany, for the design of the heat recovery backup system. That is one of the areas where we can be very strong in tendering for any backup oil facilities. We are a small company but the facilities we have are now enormous. In-house we have a good design and engineering setup.

How do you brand yourself: as an Indian company or an international company?

Both ways. In many countries you have to have a local approach to the market. For instance, in Morocco, we are seen as a local company for the sake of securing contracts. We must spend the local currency, open a local bank accounting, use local manpower and local equipment.
In Zambia we have a local company as well. We have purchased some land and we already have established a manufacturing facility; there are plants and a workshop. We have a country manager in Zambia who looks after the local operations.

What is your assessment on FFIL’s capacity to capitalize on India’s large resource pool of highly qualified specialists, and exporting Indian engineering excellence in a way?

We have a policy where every year we look for engineers on campuses. After two or three years of training we can use them for our projects. In this way we have a resourceful manpower.
We have technical collaboration with Outotec Technology, Germany for sulphuric acid technology .Currently we are building world’s largest sulphuric acid plant of 3500 TPD for Sterlite Industries Litd. We are building sulphur handling plant of 6000 TPD at Morocco. We are building sulphuric acid plant of 350 TPD & 200 TPD capacities for Grasim Industries. In fact, we have time tested technology backed up by Outotec, Germany. As per this technology, we have built many sulphuric acid plants based on smelter off Gases and raw sulphur.

What is your vision for the O&G market in the years to come and your ambitions to grow the company both in India and overseas?

We have great expectations for FFIL. The opportunities in the market place are there we are always discussing among ourselves what the best way to grasp these opportunities is. We talk about our new policies in engineering and other developmental areas. We have developed all the capabilities in-house to be part of India’s growth, in all the departments – mechanical, electrical, installation and design, for example.

In a real sense we are doing a turnkey job.
There are not many companies like FFIL in India – apart from those that have higher volumes perhaps – having such diverse interests and working in all directions.

What is your final message to the readers of OGFJ?

Today, Indian capacity is huge and Indian quality is premium. When you compare 25 years ago to today, Indian quality is now as good as Europe. We are competing in international markets worldwide. We are spreading our arms out slowly to other countries because we can pool our capacity.

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