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Indian Economic Growth and the Process Industry Ajit C. Kapadia Chairman, Spectra Dynamics Limited June 2008.

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Presentation on theme: "Indian Economic Growth and the Process Industry Ajit C. Kapadia Chairman, Spectra Dynamics Limited June 2008."— Presentation transcript:

1 Indian Economic Growth and the Process Industry Ajit C. Kapadia Chairman, Spectra Dynamics Limited June 2008

2 June 14 … Excellence in Performance … 2 Outline Indian Market Update Indian Market Update Impact of Economic Growth Impact of Economic Growth Process Industry Opportunities Process Industry Opportunities Background of Spectra Dynamics Limited Background of Spectra Dynamics Limited

3 June 14 … Excellence in Performance … 3 Outline Indian Market Update Indian Market Update Impact of Economic Growth Impact of Economic Growth Process Industry Opportunities Process Industry Opportunities Background of Spectra Dynamics Limited Background of Spectra Dynamics Limited

4 June 14 … Excellence in Performance … 4 Indian Market Update Rapidly growing economy Rapidly growing economy Steady GDP growth of 6-8% in the last 5 yrs Industrial growth >10% 1 Large domestic market Large domestic market $ 1.2 trillion GDP 2 (League of Top Twelve) 4 th largest GDP (with PPP) at $ 3.7 trillion 2 Population of over 1 billion Over 50% of the population under 25 yrs of age Process industry: $ 150 billion 3 in sales Sources: 1 The Economic Times (2007) 2 (2005) 3 Capital Market Scoreboard (2005)

5 June 14 … Excellence in Performance … 5 India Market Update 2 % 4 % 6 % 8 % 10 % Economic Growth Rate The early years s – 1980s - Socialistic approach - Public sector monoliths - Smaller private industry The early years s – 1980s - Socialistic approach - Public sector monoliths - Smaller private industry Market reform years - Early 1990s - Open market approach - Rise of private sector industry - Small, mid-sized companies - International companies Market reform years - Early 1990s - Open market approach - Rise of private sector industry - Small, mid-sized companies - International companies Growth spurt years - Late 1990s & Onwards - Rapid economic growth - Private sector gaining dominance - Rush of international companies Growth spurt years - Late 1990s & Onwards - Rapid economic growth - Private sector gaining dominance - Rush of international companies Around 9% Historical Perspective

6 June 14 … Excellence in Performance … 6 Indian Market Update Oil & Gas Oil & Gas Markets reforms from 1990s Rise in active players Refinery Refinery Surge in refining capacity PSU & private enterprise Petrochemicals Petrochemicals Increased activity Several new complexes in queue Chemicals Chemicals Private enterprise coming of age Numerous players evolving

7 June 14 … Excellence in Performance … 7 Outline Indian Market Update Indian Market Update Impact of Economic Growth Impact of Economic Growth Process Industry Opportunities Process Industry Opportunities Background of Spectra Dynamics Limited Background of Spectra Dynamics Limited

8 June 14 … Excellence in Performance … 8 Impact of Economic Growth Growing middle class Growing middle class Fiscal Standards Process industry salaries ~ % increase in 3-4 yrs Inflation steady around 5% Professional Stability Quality of life Increased affordability Lifestyle enhancement Availability of services In Orbit Mall, Mumbai More Mega Store, Vadodara

9 June 14 … Excellence in Performance … 9 Impact of Economic Growth Infrastructure Real Estate Community approach Mega & 2nd tier cities Education Schools Quality & availability International Schools Daycare & after-school activities Universities New Private Universities E.g. Nirma University, Pandit Dindayal University, UPSEG MS University, Vadodara Gurgaon-Delhi Highway

10 June 14 … Excellence in Performance … 10 Impact of Economic Growth Medical facilities Medical facilities Quality and affordability Hospitals & medical institutions E.g. Apollo, Sterling, Bhailal Amin Franchise approach by Manipal Private emergency services Health Insurance Communications Communications Telecommunications Cell Phones – Blackberry, others Privatization & availability Internet Broadband availability & affordability Breach Candy Hospital, Mumbai Telecommunication Improvements

11 June 14 … Excellence in Performance … 11 Impact of Economic Growth Transportation Transportation Air Numerous new airlines Convenience and affordability Rail Several new trains Online reservation Goods transportation Road Expressway Quadrangle Western Region Mumbai-Vadodara-Ahmedabad Private Bus Services Seamless relocation services Vadodara-Ahmedabad Expressway Various different airlines

12 June 14 … Excellence in Performance … 12 Impact of Economic Growth Services Services Net banking Personal Credit Availability Online payment (Telephone, electricity, water bills) Availability of LPG Cylinder & Pipeline gas (Gujarat) Convenient Petrol Pumps Goods / Entertainment Goods / Entertainment Shopping malls, department, grocery, electronics stores FM Stations, Satellite TV & Radio Multiplexes, IPL, Tourism Infrastructure

13 June 14 … Excellence in Performance … 13 Impact of Economic Growth Not all is rosy Not all is rosy Lagging infrastructure City development and infrastructure Governance issues persist Systems for approvals, regulations Rural development still slow Largely untouched by the industrial development

14 June 14 … Excellence in Performance … 14 Outline Indian Market Update Indian Market Update Impact of Economic Growth Impact of Economic Growth Process Industry Opportunities Process Industry Opportunities Background of Spectra Dynamics Limited Background of Spectra Dynamics Limited

15 June 14 … Excellence in Performance … 15 Indian Process Industry: Operating Co. Large Caps Large Caps Refineries Petrochemicals E&P Activities Pipeline (Transportation, Distribution) Mid / Small Caps Mid / Small Caps Petrochemicals Chemicals Pharmaceutical

16 June 14 … Excellence in Performance … 16 Indian Process Industry: Operating Co. New Opportunities / Development New Opportunities / Development Agro products Bio fuels, Food products, others Coal-based fuels Coal to liquids, gas Hydrometallurgy Cu, Zn, Ni, Co and others

17 June 14 … Excellence in Performance … 17 Indian Process Industry: Engineering Co. Domestic Domestic EIL, L&T, Punj Llyod International International Several: Fluor, Lummus, Bechtel, Aker, Technip, Udhe, … Basic Process work Basic Process work EIL & who? Mid / small companies Mid / small companies Several detail engineering vendors Basic process work?

18 June 14 … Excellence in Performance … 18 Indian Process Industry Opportunities for Engineers Opportunities for Engineers Numerous mega projects (New / Expansions) Refineries: 8-9 Petrochemical Complexes: 6-7 Fertilizer Units: 2-3 Many other large to mid-sized projects Virtually all private companies expanding rapidly Growth in all sectors of the process industry Oil & Gas, Refinery, Petrochemicals, Fine Chemicals, Pharmaceuticals, others

19 June 14 … Excellence in Performance … 19 Indian Process Industry Opportunities Opportunities Resource limitations Training & development Management participation Access to management participation Involvement in strategic and directional activities Participation in organizational growth

20 June 14 … Excellence in Performance … 20 Outline Indian Market Update Indian Market Update Impact of Economic Growth Impact of Economic Growth Process Industry Opportunities Process Industry Opportunities Background of Spectra Dynamics Limited Background of Spectra Dynamics Limited

21 June 14 … Excellence in Performance … 21 Spectra Dynamics Limited Offices in Vadodara (HQ), Mumbai & Delhi Offices in Vadodara (HQ), Mumbai & Delhi Started in May, 2004 Started in May, 2004 Consulting Services Consulting Services Conceptual Design Front-end Engineering Design Limited Detailed Engineering Safety Services Over 50 projects Over 50 projects About 25 technical personnel About 25 technical personnel Spectras Vadodara Office

22 June 14 … Excellence in Performance … 22 Location -Vadodara Strategic position at Western India Central to the process industry corridor 1.9 million residents Rapidly developing 2 nd tier city Mumbai 442 km Delhi1039 km Chennai1266 km Kolkata1893 km Distance to major cities Vadodara GUJARAT INDIA

23 June 14 … Excellence in Performance … 23 Location - Vadodara Process Industry Corridor Process Industry Corridor Oil & gas Refinery Petrochemicals Fine chemicals Others Refinery, Petrochemicals Chemicals, Pharma & Fertilizers Engineering & Construction Oil & Gas Vadodara Mumbai Delhi Calcutta Hyderabad Bangalore Chennai Jamnagar Traditional Center of Activity Traditional Center of Activity Alembic Pharmaceuticals 1907 Sarabhai Chemicals 1943 IOCL Gujarat Refinery 1965 GSFC 1970 IPCL Naphtha Cracker 1978 GNFC & Other 1980s

24 June 14 … Excellence in Performance … 24 Location - Vadodara Maharaja Sayajiraos City Maharaja Sayajiraos City Education Culture Safety Medical Facilities Cosmopolitan Internal distances Quality of life Quality of life Availability of organized retail Groceries: More, Spencer, Reliance Fresh, others Malls: Seven Seas, Vadodara Central, others Affordable Real estate Prices at 35 – 100 $/ sq. ft. Rail, Air & Road connectivity Western railway hub Proximity to Ahmedabad airport Infrastructure Not stretched like most other Indian cities Laxmi Vilas Palace Vadodara Central Mall

25 June 14 … Excellence in Performance … 25 Location - Vadodara Cost of Living Cost of Living Food, Home, Education, Transportation, Health care Estimated numbers Estimated numbers CityCost of LivingAverage Salary Vadodara$ 100 Houston$ 294$ 344 Calgary$ 307$ 352 Abu Dhabi$ 266$ 248 Delhi$ 176$ 116 Mumbai$ 182$ 116 Pune$ 144$ 106 Bangalore$ 169$ 112

26 June 14 … Excellence in Performance … 26 Promoters Ajit Kapadia Ajit Kapadia MS Chemical Engineering, Louisville, KY 1963 Career Highlights 1963 – 1970, Process Engineer, Girdler and Fluor Inc, in USA 1970 – 1984, Process Engineer & Dept Head, Union Carbide & EIL 1984 – 1987, Director Planning, GAIL 1987 – 2003, Startup President & Managing Director, HOEC KG Tuli KG Tuli Founded Paramount Limited in Vadodara, India Leading Indian EPC Contractor for Waste Water & Effluent Treatment Plants Air Pollution Control Systems 200+ personnel, 270+ Major Projects Executed, 10+ Countries

27 June 14 … Excellence in Performance … 27 Company Highlights Leading private sector process design company Leading private sector process design company Key people: years of international process engineering Over 70% of the projects in the FEED area Domestic & international Several Repeat customers Since inception during the last four years Since inception during the last four years Average annual growth of about 90% About 50 projects since inception 25+ Customers 25+ Customers Medium-sized and large Indian players Some International players in India Overseas Projects

28 June 14 … Excellence in Performance … 28 Company Focus Company Focus Process engineering leader in & around India High-end process-centric work Challenging and developmental projects Management Style Management Style Professional work environment Agile & flexible to customer / market needs Employee-oriented manner of growth Supportive and warm management Company Focus & Management Style

29 June 14 … Excellence in Performance … 29 Key Personnel Outline Mr. A.C. Kothari, Technical Director M.S. Chemical Engineering, Texas Tech Univ., 1981 Over 27 yrs in Process Engineering 8 years in Houston, with Halder Topsoe & John Brown Mr. Jay Kapadia, Executive Director M.S. Chemical Engineering, Univ of Houston,1995 Over 13 yrs in Process Engr & Adv Process Solutions 11 yrs in Houston, with Honeywell, Fluor & Invensys

30 June 14 … Excellence in Performance … 30 Key Personnel Outline Mr. D.P. Joshi, General Manager, Engineering B.E. Chemical Engineering, M.S. University,1973 Over 35 yrs in Design, Engineering & Project Execution About 10 yrs of overseas experience in Gulf Dr. U.K. Dutta, Senior Consultant Ph.D. Chemical Engineering, Loughborough Univ., U.K. Over 40 yrs in Process Design, Training &Management Senior mgmt positions held in various organizations

31 June 14 … Excellence in Performance … 31 Consulting Services Conceptual Design Conceptual Design Front-End Engineering Design Front-End Engineering Design Detailed Engineering Support Detailed Engineering Support Safety Services Safety Services

32 June 14 … Excellence in Performance … 32 Conceptual Design Commercial Technology Selection Commercial Technology Selection Identification of available technologies Techno-commercial analysis Viability for Indian conditions Payback period & Sensitivity analysis Spectra Technology Solutions Spectra Technology Solutions Ammonia Separation & Recovery Solvent Separation & Re-circulation LPG Recovery from Natural Gas Get the right technology for your needs !

33 June 14 … Excellence in Performance … 33 Process Engineering Services Process Engineering Services Pre-design Phase Feasibility Studies & Cost Estimation Design Phase Lab / Pilot Plant Scale Up Process Simulation Studies Heat Exchanger Design & Analysis Studies Complete FEED Package Development Equipment Engineering Operational Phase Utilities / Energy Optimization & Integration Plant Debottlenecking /Improvement Services Front-End Engineering Design

34 June 14 … Excellence in Performance … 34 Detailed Engineering Management Project Co-ordination & Management Project Co-ordination & Management Coordination among engineering disciplines Project progress monitoring & reporting Coordination with Client Technical Assistance for Procurement Technical Assistance for Procurement Detailed Equipment Specifications Quotes from Vendors Technical review of vendor documents Discipline Engineering Management Discipline Engineering Management Piping Design Instrument Engineering Electrical Engineering Civil / Structural Design & Engineering Leverage our promoters resources / associates

35 June 14 … Excellence in Performance … 35 Safety Services Conducting / Leading Safety Studies Conducting / Leading Safety Studies HAZOP HAZID HSE Options Selection Safety Layout Reviews Fire Protection Analysis Safety Audits QRA / Consequence Analysis Studies Emergency Escape, Evacuation and Rescue Analysis

36 June 14 … Excellence in Performance … 36 Software Packages Process Simulation PRO/II®: Premier Process Simulation Package VisualFlow®: Flare Network Simulation and Analysis INPLANT®: Utility Systems Simulation and Optimization DATACON®: DCS Data reconciliation for H & M Balance Heat Exchanger Design & Simulation HTRI®: Premier Heat Exchange Design & Analysis Package Hextran®: Heat Ex Network Design / Optimization Life Cycle Asset Information Management Comos® PT: Integrate Engineering Documents & Data

37 June 14 … Excellence in Performance … 37 Select List of Customers

38 June 14 … Excellence in Performance … 38 Summary Quality of life Significant improvements in recent years Accessibility & affordability to goods / services Type of work Process-centric differentiator Challenging & developmental work Growth Management participation Economic development in India Strategic & management participation

39 June 14 … Excellence in Performance … 39 Call to action Quarterly e-newsletters Quarterly e-newsletters Indian process industry and Spectra Engage in the technical advisory board Engage in the technical advisory board In formation phase Interaction & participation on specific issues Invitation to visit Vadodara Invitation to visit Vadodara Visit Vadodara & its lifestyle Visit Spectra Office

40 June 14 … Excellence in Performance … 40 Strength and Capabilities Chemicals & Pharmaceuticals 55% Refinery & Petrochemicals 25% Fertilizers 5% Oil & Gas 10% Others (Metals, Paints, etc.) 5% We cover a wide spectrum of market segments!


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