Patanjali Ayurved to Foray Into Solar Power Equipment Manufacturing

Patanjali Ayurved, which started its operations in 2006, has an impressive growth rate with increasing its revenue more than five times.

After excelling in consumer goods products market, Patanjali Ayurved Ltd, owned by Baba Ramdev is all set to foray into the manufacturing of solar power equipments. This will be the company’s first exposure to the infrastructure sector.

Managing director of Patanjali Ayurved, Acharya Balkrishna, quoted in an interview “Getting into solar is in line with the swadeshi movement. With solar, each household in India can have power supply, and we are here to make that happen.”

Patanjali Ayurved, which started its operations in 2006, has an impressive growth rate with increasing its revenue more than five times to Rs. 10,561 crore in the year to 31 March from Rs. 2,006 crore in 2014-15; it aims to cross Rs. 20,000-25,000 crore in sales by 31 March 2018.

As per the government’s new solar manufacturing policy a 30 percent capital subsidy is considered.

India is working to improve its per capita power consumption of around 1,200 kilowatt hours (kWh), among the lowest in the world. Alongside, it is also proposing a “rent a roof” policy to support its ambitious plan of generating 40 gigawatts (GW) of solar power by 2022.

“The government has been working on the solar industry, and even offering sops. We will manufacture solar panels in India without compromising the quality. But we are not going to get into the price war with the Chinese solar panels,” Balkrishna added.

As per a report by Mint, published on 7 September that poor-quality Chinese solar modules, rejected by developers, were being sold in the domestic market at a discount. Solar modules or panels account for nearly 60% of a solar power project’s cost.

After China’s solar panel manufacturing industry, with an estimated capacity of around 70GW per year, the US and India are major markets.

Earlier this year, a manufacturer of navigation aid equipment, Advance Navigation and Solar Technologies Pvt. Ltd, was acquired by Patanjali having manufacturing capacity of 120MW. Around Rs. 100 crore is said to be invested by Patanjali to set up a factory in Greater Noida for solar equipment manufacturing which will be fully operational in next couple of months.

“This started with our plan to use solar as a source of power at all our factories. That time we understood (that) most of the solar modules come from China. And there was no quality consistency even in India-made ones,” Balkrishna added.

With the average efficiency of a solar panel usually at just 16-22%, sub-standard quality will impact generation.

“We started with making solar modules for our captive use initially and then decided to utilize existing capacity to manufacture solar modules and sell in the market. This unit is at a nascent stage at the moment,” said Balkrishna.

Experts questioned the rationale behind the diversification.

“The two segments require very different capabilities. However, they have built their business on the ‘swadeshi vs videshi’ platform. From that perspective, solar manufacturing for domestic content requirement in upcoming projects fits into their business rationale,” said Abhishek Poddar, a partner at consulting firm A.T. Kearney Ltd.

India planning to invite bids for setting up 20GW solar power capacity, the world’s largest solar tender to be open at one go in order to accomplish the proposed target of 100GW of renewable contracts by 2020.

 “We will continue with this for now. We would look at expansion once demand grows,” said Balkrishna.

Source:  Live Mint