 "Tosiaki Higashihara, Ichiro Ino")
Japanese consumer electronics and engineering major Hitachi will step up its investments in India. In this interview with Viveat Susan Pinto, president and chief operating officer of Hitachi Tosiaki Higashihara and Hitachi's India MD Ichiro Ino share the company's India plans in detail. Edited Excerpts:
Hitachi had committed an investment of 70 billion yen (or Rs 3,640 crore) three years ago. How much of this has been utilised and are you looking at more investments in the future?
Higashihara: 70 per cent of the investment that was committed three years ago has been utilised across areas such as consumer electronics, information technology and construction machinery. We also spent some part of the corpus to acquire a payment services company called Prizm in Chennai. Our broad plan is ramp up revenues from verticals such as social infrastructure and industrial systems, IT and telecommunication systems, financial services, medical services, electronic systems and equipment - areas that we see high potential in view of the measures that the Narendra Modi government is taking towards development of India.
Are you reducing your focus on consumer electronics in India? You are still globally and in India known for consumer durables such as air conditioners. What is the plan on that front?
Ino: Globally, Hitachi is transforming from an appliances major to one that is into social infrastructure and systems. That is the vision we are working towards in India as well. While we are not out of consumer durables altogether, we will, for instance, step into the refrigerator segment with a premium line this year. A few years ago over 50 per cent of our revenues came from categories such as air conditioners and construction machinery in India. This is now coming down. We are shifting to categories such as water, IT, energy and industrial solutions in terms of revenue generation. These categories are now big for us.
What would this intevestment entail?
Higashihara: A few key steps that we are taking include expanding our portfolio of advanced medical equipment in the country. Development of elevator products in view of the growing urbanisation and need for modern amenities at airports, malls, offices, railway stations and shopping complexes. Participation in metro and monorail projects, manufacture of railway products after suitable partners have been identified and expansion of cash and non-cash payment service systems such as ATMs and financial institution settlement services. The acquisition of Prizm would help us in our drive to increase our footprint in the financial services space.
What would you be doing precisely as far as development of smart cities in India are concerned? How would you contribute to this initiative of the government?
Ino: We are speaking to the central as well as state governments such as Andhra Pradesh and Uttar Pradesh in this regard. We can contribute in the areas of IT, mono rail, telecommunications, energy provided the government identifies the scope of operation. We need to know what the government, central or state, precisely wants, for us to begin work in this area. Right now, governments haven't gone past the master plan stage. Once there is clarity on this front, I think the scope of operation would be clear.
When will the Hitachi-Johnson JV be rolled out in India?
Ino: I cannot give you a timeline since there are procedures and guidelines to be followed before the JV company can be rolled out here. We are working in that direction.
In view of the investments you are making, what is the ramp-up in manufacturing capacity as a result?
Ino: It would be significant. We have 13 factories in India for the different businesses we are into. Our agenda would not be to add more factories, but to increase capacity at these factories. This is something that we will do based on our order book and potential for growth.
