KOCHI: It seems the road ahead won’t be smooth for Transformers and Electricals Kerala Limited (TELK), a joint venture of the Kerala Government and NTPC, with the revenue and profit shrinking over the years. Also, stiff competition from its global competitors has limited the company’s orders from overseas. With an outdated technology, the over 50-year-old entity is now struggling hard to stay afloat.
TELK was started in 1963 by the state government with a technical and financial collaboration with Hitachi Limited, Japan, to set up a full-fledged unit for designing and manufacturing extra high-voltage electrical equipment in India. In 2007, the company entered into a business collaboration and shareholders agreement with NTPC. In 2008-09, the company made a turnover of Rs 232.82 crore, the highest in the last seven years since the joint venture of TELK with NTPC came into effect. The turnover dwindled to Rs 170 crore in 2013-14, mainly due to the fall in orders.
“The major reasons behind the drop in profit include high material cost, low demand, stiff competition from other companies, fall in exports and use of outdated technology. The company will have to increase its production to increase profit. But, at present, the facility has limitations to make transformers beyond 5500-MVA capacity. Retirement of skilled employees in large numbers is also affecting the company. The delay in expansion and the doubling of capacity are taking a toll on the profitability of TELK,” union leaders alleged.
TELK first exported its products to Tanzania in 1972. It used to export electrical products to countries like Indonesia, Malaysia, Nigeria, Mauritius, Singapore, Nepal and Oman. But as time passed, with the entry of many companies, the share of TELK in the global market declined. Now, the company has orders from Oman only. The profit of the company has fallen from Rs 12.2 crore in 2010-11 to Rs 82 lakh in 2013-14.
“With the reforms in the power sector imminent, TELK is gearing up to face the challenges and opportunities that the market will throw up. The recent crisis is due to the import of cheaper products from China. The price of transformers has fallen sharply from Rs 11 crore in 2007 to Rs 7 now. But, we are hopeful of staging a come back once the expansion plans are in place,” TELK officials said.
