German engineering conglomerate Siemens is working on a plan to develop India as a manufacturing hub for those products that are custom-made for emerging markets.
Code named SMART (simple, maintenance-friendly, affordable, reliable and timely-to-market) these products, such as a low-end signalling system for the railways, are low-cost and made as per the requirements of needs in emerging markets.
At present, Siemens has 21 factories in India and plans to add five more over the next three-four years, with an investment of around Rs 1,600 crore.
“India is a very important market for us… it is a growth driver for our global business and that is the reason for our clear strategic investment focus to further growth,” said Peter Loescher, president and CEO of Siemens. Loescher said the company does not believe in just building products in Germany and exporting them to other countries. “We aim to be local players,” he said.
The new facilities being developed by the company include a wind turbine manufacturing facility at Vadodara, a medium voltage switch gear facility at Goa and a motor factory at Chennai. Over the last two yeras, it has launched 20 SMART products in the country. Around 30 more are expected over the next 12 months.
Siemens hopes to garner revenues of around Euro1 billion (Rs 6,600 crore) from SMART products in India by 2020. The market for these products is estimated at around Euro 21 billion (R1,40,000 crore) in India. It will also add 10,000 people to the 17,000 it employs at present.
Siemens is setting up a fourth business division “infrastructure and cities” on October 1, to roll out products for infrastructure development in cities.
Siemens India’s revenues have over last five years tripled from Euro 0.6 billion (Rs 4,000 crore) in 2005 to Euro 1.9 billion (Rs 12,650 crore) in 2010.