Gujarat Borosil is creating a market through new solar glass, says PK Kheruka

Gujarat Borosil recently became the world’s first company to introduce 2mm fully tempered solar glass, that promises to last longer, by at least 50 percent as compared to the previous version, and generates more power. “Some of our international customers have already tested it, and are placing commercial orders,” said Vice Chairman PK Kheruka.

The company, which is part of the Group that also manufactures glassware under the Borosil brand, is investing Rs 435 crore to double its tempered solar glass capacity.

“The expansion is likely to be operational in Q-1 of 2019-20,” Kheruka told Moneycontrol in an interview.

Excerpts:

Q. How is the new tempered solar glass different? What is its commercial potential?

​A. Total cost of ownership in the solar power industry is of paramount importance.

Until now, heat resistant 2mm glass was available, but it did not qualify as safety glass.  With GBL's fully tempered glass this has become possible. Hitherto Solar PV modules worldwide have used 3.2 mm and 4.0 mm thick glass.

The Glass modules enable higher life by avoiding module failures as it does away with back sheet, which is a polymer. It is anticipated that module life can be enhanced from 25 years to about 40 years. Moreover, additional power generation of 15-30% can be achieved by using bi-facial cells. This type of module can also be installed even in the middle of sea as floating modules, thus reducing the need for installation over vast tracts of land.

With BIPV modules one can replace building/ home roofs and simultaneously generate power. The opportunities therefore are enormous.

Q. ​How big a business is the hi-tech glass​?

A. As the world’s first company to achieve this breakthrough in manufacturing 2mm tempered solar glass, GBL will be creating the market for it to start with. GBL's international customers have received the first few trial loads of 2 mm glass. After being satisfied with testing they are now placing commercial orders. Adoption may be gradual initially but could rise exponentially in due course of time.

Q. Given the over capacity utilization of your plant, do you plan to expand capacity?

​A. GBL is running its glass production at full capacity utilization. During 2017 the company commissioned a tempering line. This capacity is higher than the upstream glass production capacity.  We have therefore started to import annealed glass and process it.

For the longer term, the demand for tempered solar glass is expected to remain high. India targets to have 100 GW of installed solar power capacity by 2022 as against under 20 GW today. As India’s only producer of solar glass, GBL capacity is only about 1 GW equivalent of solar glass. GBL currently supplies 125 TPD in domestic market whereas imports are of the order of 275 TPD.  In view of the already existing demand and the future growth potential, GBL is expanding its glass manufacturing and tempering capacity by an additional 1.2 times. The expansion is likely to be operational in Q-1 of 2019-20. ​

Q. How much of a concern are Chinese imports?

​ A. Until 2016, almost the entire imports used to be from China. From 2017, there has been a flood of imports from Malaysia after a new 900 TPD plant was commissioned by one of the established Chinese producers. The imports from China were taking place at dumped prices led by heavy subsidies. ​

​In 2016, GBL applied for levy of Anti-dumping duty against Solar tempered glass originating from China and duty was finally imposed in August 2017. However, imports from Malaysia have burgeoned in 2017 and dampened the prices further. GBL has moved application for anti-dumping, a case has been initiated and an investigation is currently in progress.

Besides import of glass, GBL is also concerned about sizable portion of modules being imported into the country thereby denying the opportunity of demand for the solar glass being satisfied through domestic manufacture. Any positive action by Government to levy safeguard duty/anti-dumping duty on import of modules will be a huge positive, if and when it happens. ​

Q. What is the outlook for your consumer ware, labware and scientific ware products?

​A. Borosil Glass Works Limited (BGWL) which is a separately listed entity is engaged in these businesses. During FY18, the consumer business grew by 13.5 percent and scientific/labware business grew by 12.5 percent over FY17 respectively. This growth was achieved despite the temporary disruption on account of demonetization in Dec 2016 and the introduction of GST in July 2017. The demand for company's products is strong and company expects to continue on a path of robust growth.  The acquisition of Hopewell Tableware Pvt Ltd and its brand Larah has been integrated well and benefitted from Borosil’s larger retail reach. During FY18, the plant’s capacity was expanded and the facilities upgraded to improve efficiencies and quality of the output.

In scientific ware the company dominates the laboratory glassware segment in India. To create future avenues of growth the company introduced its Labquest range of benchtop instruments servicing the same set of consumers. With these the company expects to achieve robust topline growth and improve operating margins over the next few years.