With the government-run India Meteorological Departments weather forecasts proving erratic time and again, there is a growing market developing for customised weather information solutions for industries, whose fortunes depend direct or indirectly on weather from agriculture, power and consumer goods to renewable energy. And making hay, come sunshine or dark clouds, are domestic industry pioneers like Skymet and Weather Risk Management Services, besides global players like San Francisco-headquartered CustomWeather and Helsinki-based Foreca.
Jatin Singh, managing director, Skymet, says: “Weather forecasting is not rocket science. Since the technology is settled, sky is the limit for business.” Seven years ago, he started his private weather forecasting business in Noida, near New Delhi. Last year, he says, he recorded a growth of 50%, on the back of demand from media companies and power transmission businesses to telecom companies.
While TV channels simply announce the weather forecast to their viewers, others depend on weather forecasts for critical jobs like demand management. For example, power distribution companies in the Capital like North Delhi Power Limited and Reliance Infrastructure Limited purchase power from power generating companies after factoring in weather forecasts. Saying that weather conditions play a vital role in demand forecasting since it has a strong impact on the daily demand pattern of any power utility, a Reliance Infrastructure spokesperson explains: The weather ingredients like humidity, rainfall rate and temperature make power demand vary significantly since they call for usage of relevant electrical appliances or gadgets. For example, he adds: Increase in demand due to use of air conditioners is quite sensitive to temperatures and humidity variations.
Similarly, weather forecasts play a crucial role in the agricultural sector. Saying that weather-based crop insurance has made the claim settlement process objective and transparent for farmers, Dilip Jashnani, head, Financial Inclusion Solutions Group, ICICI Lombard General Insurance Company, adds: “The claims are automatically calculated based on certified weather data received from independent third party bodies.”
Its this opportunity in the agricultural sector that is being tapped by Kanpur-based Weather Risk Management Services. Its CEO Sonu Agrawal says: “Since the agricultural sector faces the biggest weather related challenges, it offers the biggest opportunity too.” The company claims to have reached out to 200,000 farmers through agricultural companies such as ITC, Dupont, Mahyco, JK Seeds and Excel Crop Care and microfinance institutions such as Basix, Care and Sadhan. WRMS has already set up more than 400 weather stations to cater to its wide footprint.
Going forward, its the governments thrust on the renewable energy sector wind, solar and hydropower which is attracting global weather forecasters like Seattle-based 3TIER, which specialises in providing assessment and forecasting for wind, solar and hydro energy industry.
Nikhlesh Singh, managing director, 3TIER R&D India , says: “Assessment is as important a business segment for us as forecasting. Wind energy companies need assessment of wind resources before installation, and subsequently, information about wind patterns for producing energy.” A Raja Sukumar, senior vice-president, Indowind Energy, adds: “Wind energy companies depend on the professional services of private weather forecasters because of their customised offerings.” Based in Chennai, Indowind Energy not only develops wind farms and manages some of those assets, but also generates wind power.
Besides, late entrants in the Indian market are trying to differentiate themselves from the competition through a high level of localisation. Vishal Singh, country manager, Foreca India, which recently set up an office in India , says: “We are focusing on content in local languages. Foreca is Indian offering weather forecasting service in eight Indian languagesHindi, Punjabi, Tamil, Telugu, Malayalam, Kannada, Gujarati and Bengali.”
And weather forecasting is just the tip of the weather risk management business. Fuelled particularly by the demand from agricultural and renewable energy sectors, the weather risk management market is projected to have a potential notional value of more than $8-billion in the next five to seven years, according to just released figures by Weather Risk Management Association (WRMA), a Washington-based global industry association.
In addition to agricultural and energy sectors, WRMA has identified food and beverage retailers, hotel and tours operators, aviation industry and construction companies as other potential areas of growth.
Little wonder then that players like Jackson Jolly of CustomWeather, which has a marketing office in Kochi , are increasing their focus on the Indian market. These are exciting times to be in the business in India , he says.
Source: The Financial Express
Published on 18 May 2010