Baba Ramdev’s Patanjali To Diversify Into Solar Power Business

Baba Ramdev’s Patanjali To Diversify Into Solar Power Business

Yoga guru Baba Ramdev’s Patanjali Ayurved Ltd, the consumer goods products upstart, is poised to diversify into solar power equipment manufacturing.

“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,” Acharya Balkrishna, managing director of Patanjali Ayurved, said in an interview.

This will be the company’s first exposure to the infrastructure sector and comes after its runaway success in consumer products.

Patanjali Ayurved, which was set up in 2006, has grown at a stunning pace, increasing its revenue more than fivefold to Rs10,561 crore in the year to 31 March from Rs2,006 crore in 2014-15; it aims to cross Rs20,000-25,000 crore in sales by 31 March 2018.

Just like it identified the opportunity to compete with established multinational packaged consumer goods companies, Patanjali is seeing a opening for itself in solar equipment manufacturing.

The government is considering a 30% capital subsidy as part of a new solar manufacturing policy.

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.

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Mint reported 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.

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

Patanjali acquired Advance Navigation and Solar Technologies Pvt. Ltd, a manufacturer of navigation aid equipment, earlier this year. Currently, the facility has a manufacturing capacity of 120 megawatts. Patanjali plans to invest around Rs100 crore in solar equipment manufacturing and its factory in Greater Noida is expected to be fully operational within the 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.

Besides its main business of packaged consumer goods, Patanjali has a presence in retail, education and healthcare (Ayurveda). The company sells everything from shampoo and toothpaste to biscuits, noodles, rice and wheat.

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.

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India proposes to award 100GW of solar and wind contracts by March 2020. This includes a plan to invite bids for setting up 20GW solar power capacity—the world’s largest solar tender—at one go, to spur domestic manufacturing of solar power equipment.

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

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