with Lalit Shingal, Managing Director, Enereff Engineers
You founded Enereff in 1994. Why was the time right then to start such a company, and what did you set out to achieve?
By 1994 I had already put in more than 18 years with Engineers India Ltd. (EIL). I had a very good time with them, and learnt a lot. I still consider that Engineers India was a lovely platform to get the knowledge base right – at that time I wanted to see if it was possible to practise what I had been preaching: rather than staying in a company for my entire life, I wanted to take it to the next level, found my own company and enter one particular market niche. I did not come from a business background, so coming from a service class background I obviously wanted to start small.
The biggest challenge was to take those first few steps on my own. I was approaching the same clients that I had been working with at EIL – the biggest worry for me was whether they would receive me and respect me without the EIL name behind me! It was difficult in the beginning, but I was very clear that we needed to be able to provide absolutely quality service, and this strategy was eventually successful.
Amongst EIL’s diverse engineering disciplines there is general engineering and speciality engineering. The department that I was in was the Heat and Mass Transfer Division, which was a specialised division of the organisation and had a lot of overseas engineering collaborations. I was fortunate to be exposed to a variety of working relationships with different types of people and different technologies. At EIL there was reasonable flexibility, and I was fortunate to get good seniors who gave me a relatively free hand. I was able to imbibe not only engineering, but also collaboration skills whilst working at the company, which meant I was able to tackle the other aspects of running a business such as Enereff: not just the engineering side but also interacting with people and getting knowhow from within the organisation and outside. By 1994, I felt comfortable that I would be able to do something on my own.
When was it that you spotted the right niche to go off on your own and start Enereff?
In my time I went through various groups within the Heat Transfer Department. The last group in that department was the Fired Heaters. Fired Heaters are a system: it is not just equipment specific design. That is where I realised that the bounds of awareness and knowledge were helping me understand a system. After I had put in a couple of years in the Fired Heaters group, I felt a little better equipped to be able to branch out and do something.
How did the business grow after you founded it? Where did you find that you were getting the most business?
In the area we were operating, PSUs were the only companies involved in India. To work with a public sector company as an engineering consultancy is not easy. We need a PTR – a previous track record. How do you build one of those when you are a new company? We were very fortunate in getting Indian Oil’s Haldia Refinery to give Enereff its first few jobs. Of course, our first job came from a private company called Tamilnadu Petroproducts Ltd, and that really helped us. The second job we got was from Indian Oil Haldia, and after this the first few jobs were done for that Refinery. So that built up Enereff’s PTR, and once one of the refineries of IOCL had accepted us, there was less resistance with the second unit of the same company: acceptance was a little smoother, faster, better, as they have seen our work. So at this point it is not just an ex-EIL guy saying ‘I did this when I was at EIL’: it was Enereff that has done it. So the Enereff name began to get accepted and work started to flow in.
How has the business for you changed since 1994? In terms of technology, there have been leaps and bounds, and I would imagine that the industry probably looks very different today to when you started. How have you come to terms with that aspect of the business?
The area in which we operate is essentially designing energy guzzling equipment. We work with Fired Heaters, which use fuel, and fuel means energy. Energy savings are a direct result of a more efficient equipment in this area. Whatever energy I save means a straight saving for the operating company.
So the change in technology as regards energy conservation in our area of operation has essentially revolved around making equipment and designs increasingly energy efficient. There are two ways to do this. One involves the design aspect; the other is the hardware aspect.
In order to stay at the cutting edge of the design aspect, we continue to upgrade our technology, we continue to get more people in who have the appropriate experience; we buy good software and we also develop our own. The skill sets are there. We are not starved of that.
Do you believe that the Indian refining industry has changed dramatically in the last few years, and if so, in what way?
As far as Enereff is concerned, the largest change in the refining industry has essentially been the size and the complexity of the materials due to the types of crudes being processed, which are getting heavier and more sulphurous.
The problem that we are tackling now is that for a long time we have been dealing with Fired Heaters of around 80% efficiency. Today we are talking about 91% calculated thermal efficiency, at least. This means very close monitoring of the excess air in the flue gases, in our designs we are including new equipment such as high efficiency Burners, better refractory design, different types of heat recovery equipment, online flue gas monitoring and a lot of other instrumentation.
We are doing some six or seven Fired Heaters for the new IOCL Refinery at Paradip. These are Enereff’s largest projects so far. The moment Paradip comes onstream India will be net exporter of finished petroleum products. This has always been the plan: Paradip is a coastal refinery, designed for ease of export.
Another major change has been the size of Indian Refineries. Today we talk of processing over 9 million tons/ annum of Crude in a single Refinery. This has enabled Refiners to install a lot of equipment that would otherwise have been non-viable economically.
What kind of opportunities is that going to give Enereff as a company?
By March or April of this year, when our current projects will be completed, we will no longer have to worry about Enereff’s PTR, having worked on Furnaces all the way from 0.5 million kcal/ hr to 200 million kcal/ hr. Having done the entire gamut of all types of furnaces, we are now thinking that our next step should be to do more projects with multinational companies. Enereff can provide quality, cost effective solutions in the area in which we are operating, and this should provide us with a crucial edge in the international field.
In some ways, if India becomes a net exporter of petroleum products it is not good for me because I want refineries to be built in India: this is my fiefdom! But this means that now the company has to prove itself outside India, for which I am game. With our expertise and our track record, we should be able to garner more overseas work.
India has traditionally been regarded only as a back office for engineering consultancies, but Enereff aims higher from that as a design consultancy. India has been good at back office work, giving very cost effective answers for almost every large engineering consultancy in the world. However, we would like to get into at least somewhere where we can contribute more meaningfully in undertaking challenging assignments and providing appropriate engineering solutions.
Do you find it difficult to build that brand as an Indian company?
Not really. It is just that the initial stage is daunting. However once you have earned your wings, things are easier. In our area of operation, with limited competition, it is relatively easier to build on your previous successes and get recognition. In general globalisation has helped the world to know about Indian capabilities. Today I feel that India has surpassed the stage where we are only useful as a back office. I don’t think there is much left to be explained or much left to be shown to the people who matter in those big organisations, whether India can deliver or not. India does deliver.
So how are you going to approach Enereff’s internationalization?
We are already getting enquiries from overseas – Australia and Singapore. We are building on this base. We propose to be a little more proactive in the Middle East, because I find that a number of Indian companies such as Essar and ONGC are already going to the Middle East to build refineries. Once Indians start going there, then with them goes the whole paraphernalia of support services – so we can tag along there to obtain work in our area of specialistion.
Enereff’s motto is that the company is ‘not just the thinkers of the present but the builders of tomorrow’ – so let’s talk a little bit about tomorrow. If we were to come back and see you in five years, what would you like to have achieved?
By that time the company will have also diversified into the power sector. Again it is India specific, but then that is the way it is! When the world is coming to India, why should I hunt elsewhere? Power is a big issue for India: they say that currently there is a 15% peak load shortage, but in reality this could be much higher. I feel that power is something that the Chinese took care of very effectively – three years, 100,000Mw every year. India didn’t do that. We are still talking about 68,000Mw in five years, and we end up doing 35,000Mw. We hardly achieved 50% of the projected target, which anyway gets set too low considering the actual potential and the optimum growth of the country.
You may call coal a bad energy source, but this country has this resource in abundance. Regarding nuclear energy, we can talk about it until we go blue in the face, but it is going to take another fifteen years before one can see any concrete results. I feel that thermal power is where the future lies, and for Enereff it is a natural step from our existing skill and knowledge base. If you think and dream big, you should have an excellent follow through and this could be a fitting area to diversify.