Guwahati: Swiss engineering giant Burckhardt Compression is registering a determined growth route in India, aiming to expand its income beyond Rs 1000 crore within the next few years.
In an exclusive interview with Business North East (BNE), Milind Wagle, Managing Director India, reflected on key plans, the evolving demand for its Oil & Gas business and Companies potential for sustainability and digital change.
From pioneering novelties in hydrogen and Bio-CNG to developing products for India's defence sector with high-pressure compressors, Burckhardt Compression India is establishing itself as a key player in India's energy and industrial scenery.
Here are the excerpts from the interview:
BNE: Please tell us about Burckhardt Compression's operations in Northeast India
Milind Wagle: We have a specific few clientele in the oil and gas sector in the Northeast region. The Service Division had primarily set up a work-shop in Guwahati to provide service support to customers in the Northeast, though, we also have a larger service facility in Vadodara, which caters to the entire country. Owing to lower-than-expected business volume over the years, we had to close down the same in the recently. But we have ensured to provide good service quality from our Vadodara center to these customers while still retaining the Field Service people within the region.
BNE: What are the key growth strategies for the next five years?
Milind Wagle: We established a five-year growth plan in 2023 for both the Divisions. We started the 5year growth plan with approx. turnover of about INR 400 crores. Our target is to reach INR 1000 crores, with 70 per cent growth coming from the new machine business and 30 per cent from the service business. Over the past two years, we remain on track, not only in terms of our business targets in India, but also in expanding our supplies from India to international markets.
BNE: How do you see the demand for compression solutions evolving in the energy and industrial sectors?
Milind Wagle: We are a project / capex driven industry, where growth is also influenced by government policies in various sectors. While the oil and gas industry remain's our core business, we are also increasing our foot prints into applications linked to Solar industry and Sustainable solutions initiatives like H2 mobility sector, etc. Moreover, we have been pioneers in the CNG sector in India since 1990s and have been involved in Bio-CNG applications for past decade, supplying significant Vol number of compressors across India per year. Our growth rate remains strong, both in India and internationally.
BNE: What role does sustainability play in Burckhardt Compression’s product growth and business strategy?
Milind Wagle: Sustainability is a critical aspect of our business. Internationally, we target to become a Net Zero company by 2035. Burckhardt Compression is known for their reliable & long MTBF products coming from robust product design which supports Sustainability principals.
Nevertheless, our RND has developed products to support the duel-fuel applications needs of the LNG Ships as well as High pressure Oil free compressors as required for the H2 mobility market.
Burckhardt Compression India is the only company in the Gas Compression Industry in India to obtain CII GreenCo Gold certification, showing our commitment to sustainable operations. Our Operations run on Green Energy either setup within the facility or sourced through the Govt.
In India, we are actively involved in the CNG, Bio-CNG, and Hydrogen mobility sector as well as supplied compressor for manufacturing of materials used for producing Solar cells, etc.
BNE: How is the company adapting to the international shift towards renewable energy and decarbonization?
Milind Wagle: In 2014, we were a relatively small organization. Today, 40 per cent of our energy consumed comes from Solar energy setup in our facility while we purchase the balance from the Maharashtra Govt. We are also water positive as well as Zero Landfill company & we work on 10 different GreenCO parameters addressing various aspects of Sustainability including Safety where we have Zero LTIR for last 4+ years. Globally the target is also to reduce the GHG by 50% by 2027 & 75% of the energy being sourced from renewables to operate all our plants which as of date is on target to be achieved. Sustainability parameters have now become a prominent part of the Companies goals & Employees long term incentives, etc.
BNE: What markets or industries are driving the most demand for your products?
Milind Wagle: We cater to the oil and gas business which mainly covers Refineries, Petrochemical & Industrial applications. In India we also cater specific to Indian defense segment with our High pressure Air compressors.
We design & Mfg gas compressors catering to Refinery & Industrial gas segments for local as well as global markets. These segments have been showing significant growth in recent times in line with the Govt Make in India policies & self-reliance.
As mentioned earlier, we are having significant market share in the CNG as well as Bio-CNG applications which are both growing markets in India with the focus & policies implemented by the Indian Govt.
As regards the use of Green H2 for future mobility sector in Commercial Vehicles & Train transportation, it’s a developing market mostly at pilot stage now, but we have products to cater to the needs of the companies which will invest in these business lines in future.
We are one of the leading companies in providing high-pressure air compressors for the Indian defence industry, which has also having steady growth with plans to build Submarines, Warships & Aircraft carriers for Indian Naval requirements as well as to friendly countries.
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BNE: How is Burckhardt Compression mixing digitalization and the Internet of Things (IoT) into its compressor solutions?
Milind Wagle: In the past, we were not at the forefront of digital innovation. However, we now have a dedicated digital vertical organisation called Digital Products and Services (DPS). This unit provides a comprehensive range of digital solutions, including real-time monitoring and condition-based maintenance at various prize points to meets the customer's needs & budgets specifically for high end products where downtime could be a high prize to pay. We offer AI-driven products specifically intended to meet our compressors safeguarding 24/7 operational efficiency.
BNE: What are the latest novelties in compressor technology that Burckhardt Compression is focusing on?
Milind Wagle: As a Swiss company, research and development is in our genes. In India, we pioneered CNG compressors when they were not available locally. We have also developed high-pressure air compressors for the Indian defence sector to meet the newest technology requirements as well as replacement of Russian Make compressors in the past. Moreover, our headquarters is focusing on developing compressors which are oil free. We have positively developed solutions that maintain compressor longevity while eliminating oil from the system.
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BNE: Is the company investing in hydrogen or carbon capture technologies? How do you see their future potential?
Milind Wagle: Absolutely, we are capitalizing on hydrogen and carbon capture technologies & have the products as needed to serve this growing market. Hydrogen is one of the key areas where we see immense possibilities specifically as future source of energy in Heavy industries. We are actively developing compressors specifically designed for hydrogen applications, ensuring efficiency and reliability. Carbon capture technology is another area we are exploring, as industries worldwide are focusing on reducing emissions and transitioning to cleaner energy sources.
BNE: How did Burckhardt Compression perform financially in the last fiscal year?
Milind Wagle: We are a 100 per cent owned company in India, and our financial figures are not disclosed publicly. However, I can share that we have experienced double digit growth rates over the last few years. About 8–10 years ago we were SME & today we are LSE having close to 7000 MINR turnover and expect to exceed INR 1BINR in the next 3 years. We have similar story for our group & since we are listed on Swiss stock exchange, the details are available in public domain.
BNE: What are the key challenges in maintaining profitability in a highly competitive market?
Milind Wagle: The new machine business is extremely competitive, with most of international players operating in this space in India with Mfg facilities as well. In that sense it's a level playing field. As a result, margins on new machines could be on lower side. However, our service business, where margins are much better, contribute to our overall profitability. Despite market challenges, we remain financially robust organisation, and our ability to offer competitive salaries as well as sound policies for employees benefits over the years reflect our financial position. Localisation of supply chain is another area that has helped us to improve the competitiveness of our products for local and global business.
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