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| 'Nuclear power generation a distant dream' | | Q&A: M S UNNIKRISHNAN |
| Kaustubh Kulkarni / Sep 26, 2009, 00:43 IST |
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 Energy and environment solutions provider Thermax Ltd has projected a drop of up to 25 per cent in revenues in the current financial year. The company, which generates most of its revenues from power plant equipment, expects to post lower profits as well. Chief Executive Officer and Managing Director M S UNNIKRISHNAN spoke to Kaustubh Kulkarni about the company's future plans and what he sees ahead in the Indian power sector. Edited excerpts
Thermax has already projected a drop in both top as well as bottom lines for the current fiscal. What are the primary reasons and how do you see the situation changing?
Right at the beginning of the year, we saw a number of orders being cancelled by our clients. A few others were put on hold. The credit crunch factor also affected our business over the last two quarters. Hence, we have given a projection of lower revenues as well as profit. The third quarter of 2008-09 was the worst, while the last quarter of the same financial year saw certain improvement in the business. The inflow of orders is picking up slowly.
Which segment is seeing a pick-up?
We are receiving orders primarily from the energy segment and the same will continue to grow. Captive power generation and sewage treatment plants are two other major areas that are showing improvement. We have also received orders for our circulating fluidised bed combustion (CFBC) technology boilers meant for large-capacity energy plants.
Where is this business coming from? Are you looking at drawing business from newer geographies?
India remains our primary business location and major orders are still coming from the domestic market. The energy sector in India is going to rise and, hence, concerns regarding the environment too would increase.
However, we have adapted a de-risking approach towards business development. So we are looking at business opportunities from the developing world, like China, South-East Asia, the Middle East region, Africa and South America.
Issues like climate change and exchange of carbon credits must be on your mind...
A clear and clean mechanism to generate energy raises concerns of climate change, for obvious reasons. This provides us an excellent opportunity. We are into the business of intellectual capital and we are poised to handle it. Hence, we are developing products that adapt to climate change. We also create products that mitigate climate change and we convey information and knowledge about possible climate change with regard to certain products to our clients.
Nuclear power generation would soon evolve as a major segment in power generation. How is Thermax looking at this segment?
At this moment, nuclear power remains a distant dream for India. Unless and until the 123 Agreement (the Indo-US Civilian Nuclear Deal) is operational, the nuclear power technology import from US and other countries would remain limited. Also, the segregation of civilian applications from defence applications should be done and the government has to pass the Limited Liability Act for nuclear power plants.
All this will take a long time. Also, India will have market opportunities in thorium-based plants and not uranium. Thermax remains a dependable power plants solutions provider in this segment as well. We are already seeding investment in research and development of technology required for nuclear power segment.
Which crucial issues need to be dealt with before India sets up nuclear power plants?
Human safety and security of nuclear power plants are the most crucial issues that need to be tackled before setting up nuclear power generation units. If nuclear power reactors are not secured, there would be chaos and unrest. Hence, the security cost of these power plants would be an altogether different subject. India will have to spend heavily on this aspect of nuclear power generation.
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