India emerges as hub for Kone

India is emerging as a hub for Finland-based elevator company Kone Corporation by providing software and engineering services support as well as manpower to major markets such as the US and Europe, besides generating more business.

The Rs 381-crore Kone Elevator India, a wholly-owned subsidiary of Kone Corporation, has commanded the pole position with a share of 26 per cent in the Indian elevator market estimated at 210,000 elevators in 2006. The other leading players in India are Otis, Schindler, Mitsubishi and Thyssen.

Kone had set up its global software development centre in Chennai about six years ago and the centre has been providing software support for Kone's worldwide requirements. The centre employs about 50 people.

Encouraged by the success of software operations, the company also set up a global engineering centre, four years ago, at its factory in Vanagaram near Chennai. The 15,000-sft engineering centre, which employs 80 engineers, has been providing complicated engineering drawing services for the US and European markets.

Kone India is also in the process of setting up an R&D centre, which will initially employ about 20 people, at its factory to address the requirements arising out of Asian markets, including India. It will carry out works such as localisation of products and redesigning based on market requirements. Currently, the average localisation level of most of Kone's products manufactured in India is about 35 per cent while the maximum is about 65 per cent for some products.

In addition, its Indian staff is in great demand for Kone's worldwide operations. Kone Corporation will be deploying about 100 Indian staff working in the areas of installation and maintenance in the US, UK, Spain and Singapore markets.

"We are becoming a main centre for supplying resources to our parent company. In the past, we sent about 60 people from India to West Asia for providing support services," said A Sankarakrishnan, managing director, Kone Elevator India.

He said the company was growing at about 40 per cent, above the industry average of 15 per cent over the last two years, on the back of the boom in the construction sector in the country. With 19,000 lifts under it maintenance agreement, the company garners about 20 per cent of the revenue from maintenance services business.

Kone's Chennai factory, spread over an area of 8.4 acres, has a capacity to produce around 6,000 elevators a year. The company delivered about 4,000 elevators in 2006. It imports escalators from its China unit for sale in India.

Kone India, which employs about 2,000 people, is looking at expanding the production capacity at its manufacturing unit, which is expected to reach 100 per cent-plus capacity utilisation in the next couple of years.