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Market for surveillance systems explodes

Electronic security system sector has witnessed a growth of 30 per cent as government has increased expenditure on security, reports Lalatendu Mishra.

business Updated: May 02, 2007 20:56 IST

Bomb blasts at various places in the country and increased government expenditure on security have changed the fortunes of electronic security systems companies like Zicom among others in India.

The major players in this sector include multinationals like Honeywell, Siemens and Tyco, and Indian companies such as Godrej Security, Eureka Forbes and Zicom. Several smaller players also chip in.

This sector, which had a negligible growth rate a couple of years ago, has been growing at compounded rate of 30 per cent since then to a market size of Rs 1,200 crore in India, according to industry insiders.

"In 1995, when we started, the market was almost zero. Then the customers were only a few 'mom and pop' stores, some households requiring video door phones and banks. Till three years ago, there was not much demand for electronic security gadgets," said Pramod Rao, managing director, Zicom Electronic Security Systems.

"But now, with an enhanced threat perception, the business is steadily growing at 30 per cent," he added.

For example, Zicom, which had a sales income of Rs 58 crore in 2004-05 increased it to Rs 75 crore in 2005-06. The company is likely to close 2006-07 with a turnover of Rs 150 crore, which is projected to grow to Rs 200 crore in 2007-08.

According to Rao, today, the government, including the defence sector, is the main customer. Last year the government spent Rs 800 crore in installing electronic security systems at vital places. These include power plants, airports, oil and gas installations, and by the law and order enforcement agencies of the central and state governments. This segment is a high-value, low-volume business for the industry.

The growing need of security from religious places like temples have also added to demand. Apart from this, demand is steadily growing from the corporate sector, mainly from infotech companies, information technology parks, call centers, shopping malls, big retail establishments and multiplexes.

"But the demand from the household sector is not to expectation. While few individuals with high-value apartments are investing in electronic security systems, others are shying from them. The biggest challenge is the mindset. Unless something happens to them people do not invest in security," Rao said.

First Published: May 02, 2007 20:52 IST