 "ABB's Bazmi Husain")
Zurich-based Asea Brown Boveri (ABB) is set to convert its India business into a strong platform for its global technology and product operations. The recent appointment of Bazmi Husain, managing director, ABB India, as the global technology head is one such move.
It also sees a third of its India product volume feeding the export market in a few years. "India has delivered growth in all parts of businesses here. We have created a strong platform. On the technology side, we will be using India even more. Locating our chief technology officer (CTO) here sends a very strong signal both for ABB's growth and outside," said Ulrich Spiesshofer, chief executive officer, ABB Group, told Business Standard in an interview.
Spiesshofer said the company had frontloaded investment in India, so additional capacity was available. "We will use it for South Asian countries. Besides, there are favourable trade arrangements in terms of free trade agreements, so India is ideally positioned as an export hub for South East Asia. We will also use the Indian capacity and quality output to tap opportunities in Africa where there are vast markets." He along with the top management of ABB, including Claudio Facchin, president (power systems), was in New Delhi to attend a town hall meeting.
ABB is restructuring its five business verticals by clubbing the power systems and grid into a single division about January 1. Facchin would be taking over as the global head of the integrated power grid division.
The new vertical contributes more than 50 per cent to ABB's India revenue. Of $40-billion group revenue, a little more than three per cent comes from India. "The market here is growing fastest among all the global markets," said Facchin.
ABB also plans to double the 600-strong workforce at its global engineering and operations centre in Chennai over the next two years. As CTO, Bengaluru-based Husain will be responsible for overseeing all aspects of ABB's global research and development (R&D), which serves the entire company. The heads of R&D at group and division level as well as ABB's venture capital arm, ABB Technology Ventures, would be reporting to him. With locations in seven countries, ABB spends $1.5 billion annually on R&D and employs some 8,500 technologists.
Besides, ABB follows a value-chain principle. "We try to have that element of the value chain where we can make a difference in terms of assembly, planning, designing, configuration and testing. We have built strong local sourcing relationships and developed small and mid-size companies. A lot of components, we buy, will allow the supply industry to prosper as supplier to ABB India," said Spiesshofer. The company has more than 700 suppliers in India. It has also put in place a supplier sustainability development programme among others under which more than 200 have been enrolled.
Spiesshofer said the investment climate in India has improved when compared to the last five to 10 years, but there were still pockets of improvement opportunity.
"Make in India theme is one we support fully. The ambition of Prime Minister Narendra Modi is right but we need to make sure that the transmission belt between ambition and action gets tightened." And action follows ambition at the same pace.
He cited the example of support for energy efficiency technology. India today probably uses twice the amount of energy to produce the same output. To reduce energy consumption per GDP output was important.
"Making energy efficiency attractive, and making sure that the government has an influencing role in the adaptation of available energy efficiency technology that is available is a regret."
On the market side, the company was optimistic because of the underlining demand of power for all programme, industrial efficiency, and sustainability of infrastructure. "Besides, it was a decade of solar prosperity for India. We are the strongest player between panel and grid," said Spiesshofer. With coexistence of conventional and renewable technology, India will take a leading role in ABB's business growth.
Besides power, the company was looking at opportunities in the transportation segment. "I am very optimistic about the future of railway sector here, considering the growth in population, urbanisation, and the need for transportation," he said.
INDIA PLAN
- ABB also sees a third of its India product volume feeding the export market in few years
- It is restructuring 5 business verticals by clubbing the power systems and grid from January
- ABB also plans to double the 600-strong workforce at in Chennai in over two years
