Introduction
With the Supreme Court of India and the National Green Tribunal, mandating the prohibition of pet coke and furnace oil as an industrial fuel, industries have been on their toes ever since to change over. Verka Dairy, Chandigarh has set an excellent example by opting for a cleaner source of energy by converting the traditionally used furnace oil to LPG.
Verka was established in the year 1973 and received its name from the town of Verka situated in Punjab. It produces a variety of dairy products like ghee, cheese, skimmed and whole milk powder, pasteurized packed milk, sweetened flavored milk, etc. Verka caters to its customers located in Punjab, Haryana, Himachal Pradesh, Jammu & Kashmir and Northeast India. Verka is also an exporter of ghee to Australia, Malaysia, Japan, New Zealand and the Middle East.
Before Conversion
- Verka had been using a 2-ton capacity steam boiler by Forbes Marshall with furnace oil being the source of heat.
- Furnace oil being a polluting fuel, rendered the air unfit for breathing especially to the workers at the plant.
- The cost and energy content of furnace oil in contrast with LPG was far too inefficient for the company in the long run.
Cost Savings
The total cost saving for Verka after the installation of the LPG system works out to INR 3,50,000 per month, resulting in a whopping INR 42,00,000 per year in savings, these include:
- Direct fuel cost saved: Includes not only cost saved on per-unit cost of fuel but also, transportation cost of furnace oil. Using LPG has led to increased production efficiency, increased boiler efficiency and a reduction in process time.
- Indirect savings after conversion: This reduced the manpower cost of maintaining the boiler and the associated cost of maintaining a pumping and heating system in the case of furnace oil.
Payback Period
With the investment set at INR 30,00,000 and the savings per month at INR 3,50,000; the entire investment for Verka can be recovered in a span of 8.5 months, thus making LPG an attractive investment.
