INTERNATIONAL BUSINESS

Name: Ajay Vaghela Roll No.: 43

Country Study

Company:

THERMAX LTD. 1. Boilers 2. Heaters 3. Steam accessories 4. Vapour Absorption systems 5. EPC power plants 6. Chemicals 7. Water and waste management 8. Dust controller 9. Bagfilters 10. Electro static precipitator.

Product:

Country: CHINA UK

Thermax is a leading company engaged in the manufacture of capital goods mainly in the areas of energy and environment. It also undertakes turnkey projects in the areas of waste heat management, pollution control and captive power plants up to 100MW. The company has a strong technology base. Over the years, what started as a boiler manufacturing and equipment fabrication firm, has diversified into air conditioning, refrigeration, waste heat recovery, pollution control and turnkey project contractor. Recently the company has tied up with Allied Signals of USA for sourcing micro turbine technology. Operating on the principle of 'Sustainable Business Solutions for Business Improvement', Thermax is one of the few companies in the world that offer integrated solutions in Energy and Environment management. With its broad spectrum engineering expertise in heating, cooling, power, water and waste management and chemicals, Thermax enables corporations to be energy efficient and at the same time, environment-friendly. Thus contributing to industry's bottomline and the growing global efforts towards sustainable development. Thermax is committed to developing, procuring and supplying the best technologies to make integrated energy and environment solutions a profitable and attractive option for all sectors of industry. Through a strong customer focus, Thermax will strive to deliver the most cost-effective options, with the best quality. Thermax has a global reach, with 8 overseas offices and a domestic network of 12 sales & service offices.

COMPANY PROFILE

Thermax was incorporated in 1966 through a technical collaboration with Wanson, a Belgium company manufacturing coil-type boilers.The company offers products and services in the areas of heating, cooling, waste heat recovery, captive power, water treatment and recycling, waste management and performance chemicals. It has technology partnerships with leading companies such as Babcock & Wilcox, USA, the Kawasaki Thermal Engineering Company, Japan, and Bloom Engineering, Germany. In 2005-06, the company was restructured into three business groups Cooling and Heating, Chemicals and Water, and Projects to achieve synergies in related businesses. It was also among the 20 Indian companies featured in Forbes list of Asia's best under a billion companies.

Thermax Limited (Thermax) came to business in 30th June of the year 1980, headquartered in Pune, India, Thermax provides sustainable solutions in Energy and Environment by the way of standard products in the 6 areas of business, such as Boilers and Heaters, Absorption Cooling, Water and Waste Solutions, Chemicals for Energy and Environment applications, Power and Cogeneration systems and Air Pollution and Purification. Thermal's international operations are spread over South East Asia, Middle East, Africa, Russia, UK and the US. Tulsi Fine Chemical Industries Private Ltd and Kailas Castings Private Ltd were merged with the company with effective from 1st July of the year 1982. As at 1st July 1989, Thermax became a deemed public company. In the year 1991, T. K. Steel Industries Ltd was merged with the company. During the year 1994, the company's status was changed from deemed public company public company. The process heat division came out with a new boiler design in the year 1995, an oil fired smoke boiler, shell Max and Cambia, a boiler specially designed to burn agro fuels like rice and groundnut husk, saw dust, coffee waste etc. also in the same year of 1995, a Memorandum of Understanding (MoU) was signed with Bharat Shell for thermic fluid, therma, for heat transfer system.

The process heat projects division received an order from PT South Pacific Viscose, an Indonesian Company for supply of 3 boilers of 22.5 tonnes per hour of steam. Energy System Division of the company was born in the year 1996 by the way of merger of two division, one in the energy area and the other in heat recovery area to pool the expertise with a view to addressing the heat recovery business and also in the same year launched fine circulation fluidised bed combustion boiler. The MoU was signed with Bharat Shell and the Process Heat Division of the company. During the year 1997, the company had received the AD-Merkblatt certification for the entire manufacturing unit at Chinch wad. An electronic network called Thermnet linking all establishments of the company in the country was introduced during the year same year of 1997 and also Thermax had entered into a joint venture with Fuji Electric Company of Japan. The Company had introduced five new products in the standard packaged boiler range during the year 1998 and also launched a wide range of products incorporating Kawasaki modular technology in our Vapour Absorption Division. Thermax Co-gen Limited became a subsidiary of the company in the year 1999. During the same year 1999, the company had developed a more advanced process called PDP II. During the year 2000, Thermax had acquired ME Engineering, a UKbased company belonging to the Beel Industrial Boilers Plc group. The Company has signed an exclusive distribution agreement for South Asian markets with US company Purafil Inc to market their dry gas scrubbers popularly known as chemical filters. Thermax had signed a memorandum of understanding with the Society of Applied Microwave Electronics Engineering and Research for commercialisation of the latter's microwave disinfections system for treating pathological bio-medical waste generated by hospitals and research institutes. The Company had set up wholly owned subsidiary company in the US, namely Thermax Inc and another one in Detroit, USA in the year 2001. Thermax had acquired 50% of stake in Energy Performance Service (Thailand), a subsidiary of Energy Performance Service of Canada. The Company and Cummins Diesel Sales and Services had entered into a strategic alliance to provide attractive energy solutions to various industry segments. With the investment of US $ 200,000, the company had incorporated a wholly owned overseas (WOS) subsidiary in Brazil during the year 2003. Thermax had bagged an order for Captive Power Plant in the year 2004. During the year 2004-05, the company's chemical plant at Paudh, near Mumbai had received the OHSAS 18001:1999 certification from BVQI. COFEX 2005 honoured with special award for Thermax's contribution to the HVAC industry. Thermax had inked a technical know-how transfer and license agreement with Balcke-Durr, Germany in October of the

year 2007 for dry and wet electrostatic precipitators (ESPs), air pollution control equipment for power, industrial and utility segments up to 300 MW. As at February 2008, the company had signed a technical transfer license agreement with US-based Babcock & Wilcox Power Generation Group (B&W) to engineer, manufacture and sell sub critical B&W radiant utility boilers in India. As of May 2008, the company had inked a protocol of agreement for an export order, for supply of heat recovery steam generator (HRSG). Thermax had received an order from a major refinery in July of the year 2008, to supply pulverised coal fired boilers for their captive cogeneration plant valued at approximately Rs. 8.2 billion and also in August of the same year 2008, received an order of Rs. 4.15 billion, from a leading steel making company in August pf the year 2008, for setting up a captive power plant for their upcoming blast furnace complex on an EPC basis. Thermax is planning to set up a new Rs. 5-billion manufacturing plant for large boilers of capacity 100 mw to 800 mw for power plants. In the first phase, the company will have a capacity to produce sub-critical boilers with total capacity of 1,500 mw per annum, which would entail an investment of Rs. 3 billion. In the next phase the company will scale up the capacity of the boilers of equivalent to 3,000 mw with an additional investment of Rs. 2 billion.

THERMAX IN INDIAN MARKET

1. Thermax SPX Energy Technologies Ltd. Your company has entered into a joint venture with SPX Netherlands BV, a whollyowned subsidiary of SPX Corporation, USA 2. Thermax Engineering Construction Co. Ltd. Thermax Engineering Construction Co. Ltd. (TECC) undertakes and executes engineering construction projects mainly for the Boiler and Heater (B&H) business unit of your company. 3. Thermax Instrumentation Limited Thermax Instrumentation Limited (TIL) focuses its operations on installation and commissioning of power and cogeneration plants including civil construction. 4. Thermax Sustainable Energy Solutions Limited With the looming threat of climate change and the need to reduce carbon emission, Thermax Sustainable Energy Solutions Limited (TSES) is entering into businesses related to clean development mechanism (CDM). 5. Thermax Onsite Energy Solutions Limited Thermax Onsite Energy Solutions Limited (TOESL) was incorporated in September 2009.This subsidiary, focusing on the area of green energy from biomass and other alternate sources, plans to develop utility delivery business to customer on unitconsumption basis

THERMAX IN WORLD MARKET

1. Thermax Inc., USA This step-down subsidiary is the front-end value chain for your company's cooling and chemical businesses in the USA. 2. Thermax Europe Ltd., UK. The year witnessed a significant slow down in business activities in all European economies due to credit crunch.

3. Thermax Hong Kong Limited, Hong Kong Thermax Hong Kong Limited (THKL) was formed in December 2003 as part of the strategy to enter the Chinese absorption cooling market. 4. Thermax (Zhejiang) Cooling & Heating Engineering Co. Ltd., China Thermax (Zhejiang) Cooling & Heating Engineering Company Ltd. that began commercial operations in September 2008 completed its first full year of operations.

5. Thermax International Ltd., Mauritius During the year, your company has invested USD 25,000 in the share capital of this subsidiary to meet operational expenses. 6. Thermax do Brazil Energia e Equipamentos Ltda., Brazil During the fiscal year the subsidiary earned an income of BRL 0.12 million (USD 0.07million) and made a profit after tax of BRL 0.04 million (USD 0.02 million)

THERMAX IN CHINA

Thermax operates in China through the newly formed subsidiary, Thermax (Zhejiang) Cooling & Heating Engineering Co Ltd, China. In this market, the company focuses on its cooling business and has set up an absorption chiller manufacturing facility. The new facility began full commercial production in July 2008. Located near Shanghai, the plant will initially produce 100 chillers per year, and scale up to 400 chillers a year. Primarily catering to China, it will gradually meet the needs of other Asia-Pacific markets.

The plant has state-of-the-art machinery and is based on a lean manufacturing platform. Chillers are assembled on trolleys and robotics is used for improving welding quality. Materials are sourced locally to speed up production, while dedicated small cranes at work stations, reduce lead times. Starting with the production of chillers in the 500 TR range, the plant has the capability of building chillers upto 3000 TR. The plant has performance testing infrastructure that meet the global standards desired by international markets.

Thermax is investing $8 million (Rs 36 crore) to set up an absorption chiller manufacturing facility in China. The senior company management said the Chinese market currently accounted for about half of the $600 million global market for absorption chillers. Thus, the investment in the neighbouring country is expected to ensure that Thermax is located close to major customers. Absorption chillers are used largely as chilling solutions in the industrial and commercial sector, including malls and offices, provided the key input of a piped gas network is readily available, say analysts.
BEIJING: Energy and environment solutions firm from India, Thermax Limited, has opened a manufacturing facility under its subsidiary in Zhejiang province in east China with a registered capital of $11.47 million. The facility set up under Thermax 100 per cent subsidiary, Thermax (Zhejiang) Cooling and Heating Engineering Company Limited is the companys first overseas manufacturing unit. The plant with a capacity of over 400 absorption chillers per annum with the state-ofthe-art machinery would cater to the absorption chiller market in China and some other overseas markets, the company said. Consul General of India in Shanghai Vishnu Prakash inaugurated the facility in the presence of Thermax Group Chairperson Meher Pudumjee and Jiaxing Vice-Mayor Jiang Ren Huan, a company statement said. Thermax Limited, a USD 800 million leading company in energy and environment solutions, offers total integrated solutions in the areas of heating, cooling power, water and waste management, air pollution control and chemicals, it said. Headquartered in Pune, Thermaxs international operations are spread over China, South East Asia, Russia, West Asia, Africa, UK and the US

THERMAX IN UK

THERMAX have specialised in the design, manufacture, installation and maintenance of fire curtains and smoke curtains since 1986. Later developments, such as glass smoke screens and environmental screens (air barriers) demonstrate the flexibility and ingenuity necessary to be at the forefront of building fire safety design throughout UK and Ireland All fire curtains and smoke screens are fully tested, certified and comply to the relevant BS or EN standards.

Fire and smoke containment products:

AUTOMATIC FIRE CURTAIN

THERMAX automatic fire curtains are designed to seal off an area to contain the fire and prevent it from spreading into other areas. The fire curtains have major advantages over traditional steel shutters.

FIXED FIRE CURTAIN

THERMAX fixed fire curtains are a woven fiberglass fabric barrier coated with a specially formulated micronized aluminium polymer, designed to provide compartmentation of structures and halt the passage of smoke and fire.

GLASS SMOKE SCREENS

THERMAX glazed smoke screens have become an alternative to automatic smoke curtains offering a suspended, unframed, clear glazed smoke screen as part of the fire protection strategy of the building.

AUTOMATIC SMOKE CURTAIN

THERMAX automatic smoke curtains descend fail-safe into the fire alarm position when all consumable primary and auxiliary power sources are removed, in the event of wiring system corruption, or any combination thereof.

ENVIRONMENTAL SCREENS

THERMAX custom-designed factory partitions and screens are manufactured from reinforced flexible materials and are tailored to match your building shape in a number of easily handled pre-fabricated sections.

ABOUT THERMAX IN UK

Thermax entered the EU by establishing Subsidiaries in the UK.These subsidiaries were set up to enable business with countries where direct export was not possible because of countryspecific entry barriers. It also assisted in gaining a foothold in the shell boilers product category, particularly in the Western European market. Thermax has two subsidiaries in the UK: Thermax Europe Ltd. ME Engineering

Thermax Europe Ltd.

It was established in 1996 as a wholly owned subsidiary of Thermax Limited India.The company provides integrated cooling and heating solutions to its clients. Its heating division has a wide product range that includes thermal oil heaters, steam boilers and hot water generators. Since April 2006, the subsidiary has been given the charge of handling the packaged boiler business in the EU countries and the UK.The company has a widespread dealer network in the EU. It generated revenues of EUR 2.59 million in 2005-06. The companys main product line is absorption chillers.This technology is used to generate chilled water from hot water coming from the cogeneration plant.Thermax is one of the few companies in the world with this superior technology. Since, EU is a signatory to the Kyoto Protocol; it is bound by the agreement to reduce carbon emissions. High efficiency cogeneration plant has been identified as one of the technologies to help EU countries to reduce the emissions.Thermax, through this technology, is playing a vital role in two important issues concerning the EU energy efficiency and environmental issues (carbon emission). It has over 250 installations across the EU, sold through a network of distributors in the UK, Germany, Spain, Italy, Hungary, Sweden, Denmark, Luxembourg, Portugal, the Netherlands and Switzerland. From 2006, the shell boiler business which was previously dealt through ME engineering has been transferred to Thermax Europe and the company is expecting to have a combined turnover of EUR 6-7 million.

ME Engineering
It was acquired by Thermax Limited India in 2000. The company provides solutions in the field of energy-related engineering and undertakes the management of projects related to the energy sector. It also caters to sectors such as combined heat and power cooling, power, chemical, refinery, process, and renewable energy industries. Some of its key clients include Rolls Royce, Solar, Samsung and AMEC.The company has doubled its revenues in the last five years.

Factors for Success

Market Penetration
The company has country-specific business models. In order to overcome entry barriers in the EU, it acquired companies and also set up subsidiaries. Thermax India has leveraged its resources by combining its downstream expertise in oil and gas with the upstream know-how of its subsidiary, ME Engineering, in the UK.This has enabled it to effectively target the oil and gas industry. Focus on Quality The company has maintained a high level of quality, which is reflected in the international quality certifications it has been awarded, including ISO 9001, 9002, 14001 and the new European pressure directive. It also has its own testing facilities for raw materials as well as finished products. Competitive Solutions Thermax is a diversified manufacturer of energy equipment and environmental systems. The company is a market leader in boilers and Absorption coolers. It is one of the few companies in the world that offers integrated equipments and Services in energy. Some of the key initiatives undertaken by Thermax that have helped in improving the companys competitiveness are as follows: Cost reduction measures Global sourcing Upgrade of IT systems

 Business process improvements Knowledge management R&D investments of approximately EUR 12.42-16.56 million

Its joint ventures and strategic alliances with global technology leaders, such as Wartsila in Europe, are helping the company to upgrade its technology as well as penetrate the EU market further.

Future Plans
Focused Approach Thermax wants to adopt a focussed approach across its EU operations to reduce overall costs and improve quality. The company is planning to introduce chillers that can deliver lower temperature water for industrial and food industry. This will further open the market in a segment that has been non-existent till now. It is also exploring the possibility of finding new application and product in the efficient burning of bio fuels - an emerging area in the EU.

Operational Excellence Thermax is planning to invest in its existing facilities to achieve operational excellence.The UK being an important market for the company, it aims to modernise its UK operations.This initiative is expected to have a direct impact on cost, quality, and lead-time and on-time performance. Future Investments Thermax is planning to increase its production capacity by investing in the following two areas: Research and Development Market Development