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

Indian Economic Growth and the Process Industry

Ajit C. KapadiaAjit C. KapadiaChairman, Spectra Dynamics LimitedChairman, Spectra Dynamics LimitedJune 2008June 2008

Apr 10, 2023 … Excellence in Performance … 2

Outline

Indian Market UpdateIndian Market Update

Impact of Economic GrowthImpact of Economic Growth

Process Industry OpportunitiesProcess Industry Opportunities

Background of Spectra Dynamics Background of Spectra Dynamics LimitedLimited


Outline






Indian Market Update

Rapidly growing economyRapidly growing economy Steady GDP growth of 6-8% in the last 5 yrs Industrial growth >10%1

Large domestic marketLarge domestic market $ 1.2 trillion GDP2 (League of “Top Twelve”)

4th largest GDP (with PPP) at $ 3.7 trillion2

Population of over 1 billion Over 50% of the population under 25 yrs of

age Process industry: $ 150 billion3 in sales

Sources: 1The Economic Times (2007) 2http://www.cia.gov/cia/publications/factbook (2005) 3Capital Market Scoreboard (2005)


India Market Update

2 %

4 %

6 %

8 %

10 %

1950 1980 1990 20001960 1970

Eco

no

mic

Gro

wth

Rat

e

The early years- 1950s – 1980s- Socialistic approach- Public sector monoliths- Smaller private industry

The early years- 1950s – 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 Historical PerspectivePerspective


Indian Market Update

Oil & GasOil & Gas Markets reforms from 1990s Rise in active players

RefineryRefinery Surge in refining capacity PSU & private enterprise

PetrochemicalsPetrochemicals Increased activity Several new complexes in

queue ChemicalsChemicals

Private enterprise coming of age

Numerous players evolving

Oil & Gas - No. of Active Players

0

4

8

12

16

1990 1995 2000 2005

Refinery - MMPTA

0

40

80

120

1990 1995 2000 2005

Petrochemicals - KTP Ethylene

0

400

800

1200

1990 1995 2000 2005

Chemicals - Player > $ 500M

0

20

40

60

1990 1995 2000 2005


Outline






Impact of Economic Growth

Growing middle class Growing middle class Fiscal Standards

Process industry salaries ~ 300-400% 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



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



Medical facilitiesMedical facilities Quality and affordability Hospitals & medical institutions

E.g. Apollo, Sterling, Bhailal Amin Franchise approach by Manipal

Private emergency services Health Insurance

CommunicationsCommunications Telecommunications

Cell Phones – Blackberry, others Privatization & availability

Internet Broadband availability & affordability

Breach Candy Hospital, Mumbai

Telecommunication Improvements



TransportationTransportation 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



ServicesServices Net banking Personal Credit Availability Online payment (Telephone, electricity, water bills) Availability of LPG Cylinder & Pipeline gas (Gujarat) Convenient Petrol Pumps

Goods / EntertainmentGoods / Entertainment Shopping malls, department, grocery, electronics

stores FM Stations , Satellite TV & Radio Multiplexes, IPL, Tourism Infrastructure



Not all is rosyNot 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


Outline






Indian Process Industry: Operating Co. Large CapsLarge Caps

Refineries Petrochemicals E&P Activities Pipeline (Transportation, Distribution)

Mid / Small CapsMid / Small Caps Petrochemicals Chemicals Pharmaceutical


Indian Process Industry: Operating Co. New Opportunities / DevelopmentNew Opportunities / Development

Agro products Bio fuels, Food products, others

Coal-based fuels Coal to liquids, gas

Hydrometallurgy Cu, Zn, Ni, Co and others


Indian Process Industry: Engineering Co. DomesticDomestic

EIL, L&T, Punj Llyod InternationalInternational

Several: Fluor, Lummus, Bechtel, Aker, Technip, Udhe, …

Basic Process workBasic Process work EIL & who?

Mid / small companiesMid / small companies Several detail engineering vendors Basic process work?


Indian Process Industry

Opportunities for EngineersOpportunities 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


Indian Process Industry

OpportunitiesOpportunities Resource limitations

Training & development Management participation

Access to management participation Involvement in strategic and directional activities Participation in organizational growth


Outline






Spectra Dynamics Limited

Offices in Vadodara (HQ), Mumbai & DelhiOffices in Vadodara (HQ), Mumbai & Delhi Started in May, 2004Started in May, 2004 Consulting ServicesConsulting Services

Conceptual Design Front-end Engineering Design Limited Detailed Engineering Safety Services

Over 50 projectsOver 50 projects About 25 technical personnelAbout 25 technical personnel www.specdynamics.com Spectra’s Vadodara Office


Location -Vadodara

Strategic position at Western India

Central to the process industry “corridor”

1.9 million residents

Rapidly developing 2nd tier city

Mumbai 442 kmDelhi 1039 kmChennai 1266 kmKolkata 1893 km

Distance to Distance to majormajor citiescities

VadodaVadodarara

GUJARATGUJARAT

INDIAINDIA


Location - Vadodara

Process Industry “Corridor”Process Industry “Corridor” Oil & gas Refinery Petrochemicals Fine chemicals Others

Refinery, Petrochemicals

Chemicals, Pharma & FertilizersEngineering & Construction

Oil & Gas

Vadodara

Mumbai

Delhi

Calcutta

Hyderabad

Bangalore Chenn

ai

Jamnagar

Traditional Center of ActivityTraditional Center of Activity Alembic Pharmaceuticals 1907 Sarabhai Chemicals 1943 IOCL Gujarat Refinery 1965 GSFC 1970 IPCL Naphtha Cracker 1978 GNFC & Other 1980s


Location - Vadodara

Maharaja Sayajirao’s CityMaharaja Sayajirao’s City Education Culture Safety Medical Facilities Cosmopolitan Internal distances

Quality of lifeQuality 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


Location - Vadodara

Cost of LivingCost of Living Food, Home, Education, Transportation, Health

care Estimated numbersEstimated numbers

City Cost of Living Average Salary

Vadodara $ 100 $ 100

Houston $ 294 $ 344

Calgary $ 307 $ 352

Abu Dhabi $ 266 $ 248

Delhi $ 176 $ 116

Mumbai $ 182 $ 116

Pune $ 144 $ 106

Bangalore $ 169 $ 112


Promoters

Ajit KapadiaAjit 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 TuliKG Tuli Founded Paramount Limited in 1960 - Vadodara, India Leading Indian EPC Contractor for

Waste Water & Effluent Treatment Plants Air Pollution Control Systems

200+ personnel, 270+ Major Projects Executed, 10+ Countries


Company Highlights

Leading private sector process design companyLeading 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 yearsSince inception during the last four years Average annual growth of about 90% About 50 projects since inception

25+ Customers25+ Customers Medium-sized and large Indian players Some International players in India Overseas Projects


Company FocusCompany Focus Process engineering leader in & around India High-end process-centric work Challenging and developmental projects

Management StyleManagement Style Professional work environment Agile & flexible to customer / market needs Employee-oriented manner of growth Supportive and warm management

Company Focus & Management Style


Key Personnel Outline

Mr. A.C. Kothari, Technical DirectorMr. 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 DirectorMr. 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


Key Personnel Outline

Mr. D.P. Joshi, General Manager, EngineeringMr. 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 ConsultantDr. 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


Consulting Services

Conceptual DesignConceptual Design

Front-End Engineering DesignFront-End Engineering Design

Detailed Engineering SupportDetailed Engineering Support

Safety ServicesSafety Services


Conceptual Design

Commercial Technology SelectionCommercial Technology Selection Identification of available technologies Techno-commercial analysis

Viability for Indian conditions Payback period & Sensitivity analysis

Spectra Technology SolutionsSpectra Technology Solutions Ammonia Separation & Recovery Solvent Separation & Re-circulation LPG Recovery from Natural Gas

Get the right technology for your needs !


Process Engineering ServicesProcess 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


Detailed Engineering Management Project Co-ordination & ManagementProject Co-ordination & Management

Coordination among engineering disciplines Project progress monitoring & reporting Coordination with Client

Technical Assistance for ProcurementTechnical Assistance for Procurement Detailed Equipment Specifications Quotes from Vendors Technical review of vendor documents

Discipline Engineering ManagementDiscipline Engineering Management Piping Design Instrument Engineering Electrical Engineering Civil / Structural Design & Engineering

Leverage our promoter’s resources / associates


Safety Services

Conducting / Leading Safety StudiesConducting / 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


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


Select List of Customers


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


Call to action

Quarterly e-newslettersQuarterly e-newsletters Indian process industry and Spectra

Engage in the technical advisory boardEngage in the technical advisory board In formation phase Interaction & participation on specific issues

Invitation to visit VadodaraInvitation to visit Vadodara Visit Vadodara & its lifestyle Visit Spectra Office


Strength and Capabilities

Chemicals & Chemicals & PharmaceuticalsPharmaceuticals

55%55%

Refinery & Refinery & PetrochemicalsPetrochemicals

25%25%

FertilizersFertilizers 5% 5%

Oil & GasOil & Gas10%10%

Others (Metals, Others (Metals, Paints, etc.)Paints, etc.)

5%5%

We cover a wide spectrum of market segments!

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

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