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Published on: Jan. 10, 2023, 7:54 p.m.
How Skipper’s growth plan paid off
  • Transmission line tower testing station: one of the best in the country; Pix: Skipper

By Sajal Bose. Executive Editor, Business India

Infrastructure is an important aspect of the economic development of a country. The growing population, rapid urbanisation and industrialisation are driving the demand for power consumption and communication. So, the creating capacity in transmission & distribution infrastructure across the country is crucial to meet the accelerated demand. The Kolkata-based Skipper Limited, a listed entity, is the largest manufacturer of power transmission and distribution of telecom and railway structures. It has adopted the changing market scenario, which has paid the company rich dividends.

One of the oldest players in the segment, Skipper has bagged orders worth Rs2,570 crore from BSNL (Bharat Sanchar Nigam Limited). The contract has been awarded by BSNL for supply and erection of ground-based telecom towers, installation of infrastructure items and their subsequent operation and maintenance for five years (capex and opex model), extendable by five more years in the uncovered villages of India under 4G saturation projects. In July 2022, the government approved a revival package for BSNL, amounting to Rs1.64 lakh crore. BSNL floated a tender in October 2022 for a requirement of 100,000 4G sites across the country, mostly in uncovered villages under 4G saturation projects.

Skipper will execute the work in the states of Rajasthan and Odisha, which includes development of about 3,350 tower location sites, using home-grown 4G stack. This will be funded through the government’s Universal Service Obligation Fund (USOF), which has a reserve of about Rs55,000 crore to be utilised for providing connectivity in rural and remote areas.

“Backed by our expertise in executing projects for the telecom sector, this is another significant win for us,” says Sajan Kumar Bansal, managing director, Skipper. “Our engineering capacity to support captive manufacturing of telecom structures and experience in building tower sites on turnkey basis will complement the execution of this project and will establish our company as a front runner in this domain.”

“The market looks exciting, based on the strong traction in domestic telecom,” adds Sharan Bansal, director, Skipper. “This will be on account of future 5G roll-out.” Skipper has 18 months’ timeline for the project execution.

The journey for Skipper began in 1981 by making Hamilton poles (steel poles used by telecom companies) and later telecom towers, masts and steel pipes, in a factory in Howrah in Bengal. Skipper was a large supplier to the P&T (now BSNL) department. However, the launch of mobile phones changed the business dynamics of the telecom sector.

Sajan Kumar Bansal, founder, Skipper, realised that Hamilton poles were no longer viable and stopped making them. He then forayed into telecom tower manufacturing, with its engineering and fabrication expertise and also ventured into manufacturing power transmission and distribution (T&D) structures in 2006. Bansal diversified the company’s portfolio, ranging from value-added engineering to polymer products. 

Changing with the times

His business sense has led Skipper to be among the three largest manufacturers of power T&D structure, with a capacity of 300,000 tpa. The other two are KEC International and Kalpataru Power Transmission, which are into EPC businesses, while Skipper’s focus is on manufacturing and fabrication. “It is important to change with the times to survive in a business,” says the 65-year-old Bansal. Now, his three sons – Sharan, Devesh and Siddharth – are the driving forces behind the company’s growth. 

Over the last few years, the Bansals have pursued a rapid expansion policy, with diverse product ranges. The company has strengthened its position through backward integration, which has made Skipper the customers’ preferred choice. The company has three business verticals – engineering, infrastructure and polymers. Engineering comprises tower and structures manufacturing, which is the main revenue earner (79 per cent) of the company. Infrastructure – the EPC business – contributes 3 per cent, while polymer segment (PVC pipes, water tank etc) grow gradually at 18 per cent.

  • Bansal: upbeat about growth

    Bansal: upbeat about growth

Skipper has four manufacturing facilities – two units situated in Junglepore, one in Uluberia near Kolkata, and one at Palashbari in Assam. The company offers a wide range of power transmission towers (66-800 kV single, double & multiple circuits suitable for twin, quad and hex conductor configurations), power distribution poles and transmission line monopoles, telecom towers, railway electrification structures and high-mast poles. It also produces fasteners, bolts, nuts and other accessories. 

All the manufacturing facilities of the company are equipped with state-of-the-art machinery and testing equipment, sourced from reputed global suppliers. In-house engineering and design teams have developed innovative and cost-effective designs also, according to the clients’ requirements. The company’s ERP system monitors the product batches.

Skipper is a pioneer in adopting and implementing sustainability in business operations and has the ability to enter new geographies. Its T&D structure manufacturing is labour-intensive, each structure able to have up to 800 unique parts. And, they are all produced through precision technology, assembled for proto-checking, packed perfectly, with each part numbered properly, before being shipped out to the customers. 

Skipper owns captive galvanising capacity of over 200,000 tpa and angle manufacturing units for towers. It was one of the first companies in the T&D segment that integrated backward by setting up angle rolling mills, which gave cost and quality advantage to the company. “All our plants are based in East India, which gives us the advantage of being closer to the raw material source and the two major ports of Haldia and Kolkata,” explains Bansal.

As an EPC player in the segment, Skipper provides complete transmission solutions. “In EPC, Indian market is crowded and work with lower margin,” explains says Sharan Bansal. “So, we are selective in our projects. However, BSNL orders do give us a big boost”

Capacity additions 

Demand for power transmission and distribution equipment correlates with investment in transmission and distribution networks. India is on the verge of becoming a major power-strong nation among developing economies, which increases the demand for electricity, new power generation capacity additions and expansion of T&D infrastructure. 

Skipper has an order book of Rs4,600 crore, including exports. The company has over 130 global EPC clients, comprising government of India as also private companies. Power Grid, Tata Projects, Jio, Reliance Property & Management, Sterlite Power Transmission, Infra Rays, etc, are among some of the coveted customers in India.

The company did not divulge names of its international customers. Some of its major projects in the country are the 765 kV Nellore-Kurnool transmission line, the 765 kV Angul-Jharsugudha line and the 765 kV TS09 Orai-Aligarh transmission line.

“Over the years, Skipper has emerged as one of the most reliable and trusted business partners in our journey of growth, excelling in the T&D sector,” affirms Vivek Gautam, COO, Tata Projects. “It is a well-bonded team today, collaborating right through bidding, winning and successful execution of the challenging domestic and international T&D projects.”

As the domestic market was stagnant for some years, Skipper strengthened its focus on the developing export market as a part of its strategy, which gave it better margin for engineering products. “The T&D industry is fuelled by the surge of renewable generation,” informs Sharan. “This means that the countries the world over need to invest big in T&D structure. This is a big opportunity for us. We have already established our credibility in export”.

  • Sharan: BSNL order, a big boost

    Sharan: BSNL order, a big boost

Skipper's market reach spans across 40 plus countries around the globe – covering Europe to Africa. It includes the Middle East, South & South-East Asia and Australia, Canada, Nepal, Bangladesh, among others. Last year, Skipper’s export revenue was Rs400 crore. “Our aim is to have a 50:50 ratio between domestic and export in the next few years,” adds Sharan. 

Earlier, China was the main exporter in T&D, with 30-40 per cent of the market share. But, with negative sentiments building up on China, the global supply chain is actively looking at shifting to India. Also, Chinese products are not cheap, due to the increase in labour and raw material cost.

Skipper has invested in a DSIR (department of science & industrial research)-approved R&D lab & tower testing station, which has strengthened its innovation capabilities. Backed by a strong design team as well as an R&D team, its state-of-the-art transmission line tower testing station is spread across 14 acres of land in Howrah – one of the largest facilities of India and the first of its kind in eastern India.

The testing station is capable of full-scale load testing, a reliable tool for validating the structural design. The facility is designed to test all kinds of lattice towers, monopoles & guyed towers up to 1,200 kV and 120 m in height. “We are the only integrated T&D company to be present across the value chain – angle rolling, tower & monopole manufacturing, load testing and EPC line construction,” claims Bansal. 

In 2009, Skipper entered the polymer business by commissioning a plant in Uluberia near Kolkata. This is the company’s first diversification into non-steel products. Skipper offers a diverse range of pipes and fittings (15-400 mm), which are used in plumbing, sewage, agriculture and bore-wells. 

Since it was in the steel pipe business, the company thought that making PVC pipes was a natural choice. So, it has ramped up its production capacity of pipes from 41,000 tpa to 51,000 tpa over the last five years, through two manufacturing facilities – in Uluberia in Bengal and Guwahati in Assam. 

The upsurge in the demand for PVC pipes in the irrigation sector and the building and construction industry is the major driving factor for the segment. Indian PVC market is projected to grow from Rs30,000 crore today to surpass Rs50,000 crore by 2024-25, clocking a CAGR of 10.8 per cent. Skipper is a premium category PVC player in the eastern India market, clocking a turnover of Rs300 crore last year. However, it has yet to make a significant presence in the national market.

Quality products

“Skipper is likely to maintain its good performance, driven by an expected upcycle in overall power projects, including renewals.  However, T&D industry works on a wafer-thin margin and needs sizeable order book and deep pocket to sustain. Skipper’s strength is in its quality product manufacturing and large customer base. However, the company’s presence in EPC business is not significant, as the polymer business has not grown expectedly,” says a research analyst. 

  • We have moved up the business efficiently and with a great deal of emphasis on the customers’ needs in domestic and overseas market

“Globally, the transmission tower demand has been growing and we are getting good share of it,” claims Shiv Shankar Gupta, president, finance & operations, Skipper. “In the six months till September, we clocked 80-85 per cent of the export revenue achieved during the last financial year”. In India, the industry also expects the government to spend more on infrastructure, as it has an eye on the General elections in 2024.

Skipper has reported annual sales of Rs1,707 crore in March 2022, as against Rs1,581.50 crore in March 2021. The profit after tax rose to Rs28.6 crore in 2022 from Rs21.01 crore in March 2021. For the six months ended in September 2022, the company achieved revenues of Rs878.10 crore, including a net profit of Rs4.8 crore. Skipper’s shares change hands at Rs120 on NSE now. The promoters hold 71.89 per cent of shares of the company, while 10.14 per cent is held by the foreign portfolio investors and the rest 17.97 per cent with others.

“We have moved up the business efficiently and with a great deal of emphasis on the customers’ needs in domestic and overseas market,” points out Bansal.

The government’s overall approach to energy transmission is to achieve 500 GW renewable energy target by 2030, to provide a fillip to the power sector. With the massive growth opportunities offered, the Skipper management has set a target to achieve a Rs5,000 crore turnover in the next five years. 

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