Boiler maker, Thermax Ltd, is transforming from a provider of equipment and heating solutions to an energy transition company with its foray into biomass and technologies that enable its boilers to run on cleaner energies.
Over the next several years it expects around 60 per cent of its portfolio to run on newer, greener technologies, with focus being on providing solutions rather than just products Managing Director and Chief Executive Officer Ashish Bhandari told businessline in an interview.
It requires “a DNA change in our people in going from a product mentality to a solution mentality,” Bhandari said. “Its one of the toughest changes you can do.”
At the recently held Boiler India event Thermax showcased some of its products based on biomass fuel such as the Greenpac, a universal biograte boiler, Greenbloc a thermic fluid heater and Thermeon, a solid fuel-fired low range boiler meant for small scale industries.
There was also the low-voltage electric boiler Thermotron, which is seeing traction among some large multinational FMCG companies in their overseas operations.
How do you see your transformation from an equipment maker to an energy transition company?
First change for us was to shift the idea from being an equipment or a large engineering company to thinking about what is it that my customers need and understanding their requirements as part of their energy transition journey. So how do I transform myself? By being a key account partner to them. If somebody feels that they need to cut down energy costs, who do they first call – it should be Thermax. To get into many of these newer areas involves some of these newer capabilities that we are building which also comes with risks and variety. And it does not mean just entering new areas. Even in the products that we supply that we consider as our core, we are looking at them very differently. For example in biomass, we could have come in and said here are five biomass related products, but that would only be looking at it as a product company. If you are a customer in any part of India and today you use coal, tomorrow you may want to run biomass.
First thing they want to know, do we get biomass here or not? We have mapped biomass across the country at a very granular level where you could come to us and say my plant is here. I can tell you season by season within a 50 km radius what kind of biomass would be available. Not only that, if you come and say I will set up the plant for you, I will source the biomass and I will operate it for you as well.
I will give you services to change your current plant into one that you need. I will do this as a solution for you, not just as a product. So that mentality shift within Thermax is one of the biggest shifts that we are trying to do. Which means a much bigger investment in digital, services and it means a bigger investment in R&D. And most importantly a DNA change in our people in going from a product mentality to a solution mentality. It’s one of the toughest changes and that is the change that we are going for.
What kind of interest are you seeing in your electric powered boiler, Thermotron?
There is low interest.. it is still 1-2 per cent of our portfolio. But when we launched it, we expected it to be even lesser than that, because in India electricity is still relatively expensive. We thought maybe we will sell one or two and we were thinking of a world which was five years from now. Interestingly, in one year now, we have sold a dozen- plus. The enquiry pipeline has continued to grow much faster than what we expected.
But are the enquiries from India or outside?
Initially it was outside India, in countries such as Bhutan, Nepal, where electricity is cheap. Now we are seeing interest in India from customers in pharma, food and beverage sectors, or an automotive customer for R&D where it may not run all day and where they may just need something that operates 6-8 hours a day. These customers have access to green electricity and don’t care if it is more expensive but want a green solution. The equipment is compact, and it has zero emissions. It is catching traction with a whole set of customers, which has been a bit of a surprise for us as well.
All the new products you have showcased, when will they launch and how will they contribute to your revenue?
Many of these products are already launched and in the market. In the case of biomass ad bio-CNG we are setting up multiple plants right now that are going through final commissioning and execution. Once the plants are commissioned and delivered, the potential is tremendous.
In the case of hydrogen within the next six months, a lot of policy decisions are going to be taken. Within the next 12 months, the first set of larger projects on hydrogen will start to come. I think it will take 2 years or maybe 3 years for some of those projects to get executed and a formal, large hydrogen ecosystem will start to develop.
In the last few years, we have been in a period of growth. I am bullish that almost all the drivers such as energy transition, India’s infrastructure growth, the whole urbanization rush mean we need solutions which consume less water and result in cleaner air, and they are long-term drivers.
In three to five years’ time, how do you see your total portfolio – the newer technologies versus older, traditional boilers?
I don’t know about three to five years, but our estimate is that in ten years, in the roll-up that we did, 60 per cent of what that would look like will be new technologies. That is our aim.