Bullish about growth
As a full-range player in bus airconditioning, Sphere Thermal Systems is keen to make inroads into new markets.
As a full-range player in bus air-conditioing, Sphere Thermal Systems is keen to make inroads into new markets.
Sphere Thermal Systems was established in 2011. Specialising in bus airconditioning systems among other related activities, the company, in five years of its existence has grown to a level where it can claim to have found a firm footing in its field of operation. It is one of the three verticals of the Sphere Group according to Pramod Verma, Vice President, Sphere Thermal Systems Private Limited. The other two verticals are central air-conditioning vertical and refrigeration products vertical, which specialises in cold rooms, cold storages, transport refrigeration and more. Into the insulation of reefer trucks as well, Sphere Thermal Systems is chalking out plans to enter into the field of refrigeration machines as well. Describing Sphere Thermal Systems as a specialist in transport air-conditioning, Verma avers, “It is the next most powerful vertical out of the three verticals we have.” “The most powerful vertical is central airconditioning vertical,” he adds.
The central air-conditioning vertical undertakes building airconditioning projects. In terms of growth, Verma mentions, it is the transport air-conditioning that should be given the honour. “In the last five years it has clocked the most growth even though the base is small when compared to the central air-conditioning vertical,” he adds.
Looking at a bright future
The transport air-conditioning vertical offers air-conditioners in the range of 5kW to 49kW. With this, the company, claims Verma, covers practically every industry segment as of current. The airconditioners the company offers cover a comprehensive range of vans and buses, starting with ambulances and going all the way up to city buses. The range covers up to 14 m buses, explains Verma. A new addition to the conventional product range, the company is also offering an electric air-conditioner for hybrid. buses. In its quest to address the changing requirements of the market, Sphere Thermal Systems has entered into technical agreements with a few companies. One of the companies is a Chinese air-con specialist Guchen. It is in association with this company that Sphere Thermal Systems is offering an electric roof-top air-conditioner for hybrid and electric buses. The EZDS-05 roof mounted unit is suitable for application in all-electric buses,
tramways and trolley buses. It can be electrically or battery operated, and includes a hermetic scroll compressor of Shanghai Hitachi make. Using R407c refrigerant, the air-conditioner unit has 26000 kcal per hour cooling capacity. It also has a 24000 kcal per hour heating capacity, and consumes 8 kW power. Opines Sandeep Singh, General Manager – Sales, that they are ready for the future. “The future we understand is going to be environment-friendly and pollution-free, he adds. The electric roof mounted air-conditioner is the latest addition to our product range,” states Verma.
Claiming to have grown close to 400 per cent from the date of inception, Singh expresses that the bus air-conditioning market is 20000 to 25000 units per annum. Five years ago, he mentions, the market size for bus air-conditioners was between 12000 to 14000 units. Every non-AC bus that we see translates into a potential customer for us, Verma opines. According to him, this is just the beginning. With the perception about airconditioning changing - from being a luxury to being a commodity, the potential is huge. Explains Verma, that air-conditioning has come to play a role at every stage of the day in a person’s life; at home, in the car, at the office, and in an airconditioned bus he or she travels in. The number of air-conditioned buses is increasing according to Verma. The number in every state is however still 10 per cent of the overall bus parc. The potential for air-conditioned buses to grow is multi-fold therefore. If the government policies are expected to be a bit more favourable, a development worth noting is the rise in air-conditioned buses at state transport undertakings. These are found in 2x2, 3x2 and sleeper configurations. In the case of private operators, it is the school bus segment that is accounting for rapid growth. They are perhaps the fastest growing when it comes to buses. According to Singh, the demand for air-conditioning in staff, institutional and tourist bus segment is rapidly growing. “The future we see is bright,” he adds.
Catering to OEs and aftermarket players
Sphere Thermal Systems cater to a mix of OE and aftermarket players. The per centage of aftermarket players is high. Supporting the company in its endeavour to grow are the two other verticals, which offer products like seats, roof hatches, etc., for buses. The company also caters to the needs of OEMs through their tier 1 vendors. Stress is laid on getting the products certified by ARAI. The bus air-conditioner range of the company comprises 10 models of variable capacity. The company, says Verma, will soon launch four to five new bus ACs. The ACs that Sphere Thermal Systems offers to, are 100 per cent indigenised. They are designed and developed for India, and engineered to operate in India’s tropical conditions. A majority of the components Sphere uses in the manufacture of its bus air-conditioners are sourced locally. Only some parts like compressors, which are not made in India, are imported. Says Singh, that they believe in ‘Make in India’, and are keen to provide employment opportunities to the people in the country. Pointing at the latest, electric air-con for hybrid and electric buses, Verma avers that the arrangement is of technical transfer. The air-con will be eventually made here, in India, he adds. For the electric bus air-con to take off, a challenge for the company would be to seek a certain viability in terms of cost and volume. As far as the rest of the bus air-con range is concerned, there are challenges that the company has been tackling.
Challenges and opportunities
Typically challenges that Sphere Thermal Systems faces include convincing buyers to opt for AC buses. A good amount of tenders that STUs are floating, says Verma, include conventional non-AC buses on a large scale. The ratio
of air-conditioned buses with most STUs, claims Singh, is 15 per cent. The challenge in front of a company like theirs is to convince bus buyers, big and small, to opt for AC buses; to retrofit ACs and earn more. “It will be interesting to note that the earning of an STU has increased by running AC city or inter-city buses by a good margin,” states Verma. “Our emphasis is on offering a valuefor-money product. With no joint venture or loyalty payment to take care of, Sphere has been offering products at highly competitive costs,” he adds. According to Singh, the company commands 7-8 per cent of the bus airconditioning market share in India. Singh adds that his company has already over achieved the target for the current year in comparison to what was envisaged. Without revealing the figure, Verma says, their aim this year is to double the turnover. About opportunities, Verma avers that a customer looks at three things – price, quality of the product and service. “Since inception we have been banking on these three pillars. We have created a service network first,” adds Verma. This did keep the company confined to a few regions in the country. Plans are being drawn to expand to newer geographies without sacrificing the practice to set up a service network before launching the products. Sphere has a presence in almost all tier 1 cities in India. Sphere also has a service network in Sri Lanka, Bangladesh, UAE and Qatar. The company, in the exports markets undertakes conversion jobs. Thus non-AC buses are converted to AC buses. The potential of converting non AC buses in UAE and Qatar is high, says Singh. A law in this regard has been passed, he adds. Verma states that he sees an opportunity in Tata Motors setting up a local assembly unit at Bangladesh.
In the domestic market, Verma is confident of a good innings since many aftermarket bus body builders have invested in bus body code accreditation. Most big bus body builders have got the accreditation for bus body code from ARAI or ICAT states Verma. Efforts to invade the OE market are underway. Sphere Thermal Systems plans to add one or two OEs to their client list this year. Verma and Singh are well aware of the market shift, and the role OEMs are expected to play as the unorganised players in the bus industry find the going tough. Verma is certain about the bus industry in India moving towards a fully-built bus rather than get a body built from a local body builder. Eventually it will be factory-built buses, he says. OE business is essential for survival therefore, he adds. To bus fleet operators, Sphere offers annual maintenance contract. Their engineer is posted at the depot in case of large customer fleet. A client who has deployed more than 10 ACs of the company qualifies for an engineer to be posted at his depot. The company commissioned a service centre at Mundra port recently. It would cater to the 3035 buses out of the fleet of buses that operates there, which have been fitted with Sphere ACs. The service centre, according to Singh, is being looked upon as a profit centre, and will cater to not just their company units but those of other brands as well. Service, he claims, would be offered at a very reasonable cost. Planning to commission service centres in South India, including Bangalore, the company, according to Verma, will continue to seek growth on the basis of the support it would offer to its customers. Well aware that South India is the strongest bus AC market in India, Verma avers that they currently sell good numbers in Gujarat and Rajasthan. With people in South India preferring to undertake bus journeys; over night journeys especially, Verma is hoping that their entry into South India will bring good growth. It is a highly competitive market for certain, but Verma is confident of making inroads based on the company’s philosophy of offering good service, good price and good quality.