ABB India expands Gujarat unit, to add traction motor plant for metro rail

Capacity pegged at 1,500 traction motors a year

Even as it expands its Gujarat facility at Vadodara by inaugurating a digital substation products and systems plant, ABB India is also planning to expand its traction motor output for locomotives and metro rail projects with a new plant at the location.

While the company supplies traction motors from one of the existing plants, Indraneel D, location manager-Vadodara, and regional division manager, large motors and generators-India, MEA and Latin America at ABB India said that a new plant is being set up with an annual capacity of 1500 motors per annum at Vadodara to cater to future demand.

Currently, the Vadodara facility also manufactures traction motors for metros and Railway locomotives through OEMs while traction converter is manufactured and supplied from Bengaluru. However, the new facility will look to meet the growing demand from upcoming metro rail projects.

"In 2012, ABB India supplied 2,000 traction motors to Delhi, Agra and Kanpur metro. With new metro projects coming up across the country such as Pune, (demand for) traction motors is now picking up. We are putting up a new facility capacity of 1,500 traction motors per annum from Vadodara," said Indraneel.

ABB India on Friday announced inauguration of its expanded digital substation products and digital systems factory in Vadodara, Gujarat. Located within ABB India’s largest manufacturing campus, the new factory will meet the growing demand for a wide range of digital substation products and digital solutions in India and in more than 50 countries.

The manufacturing portfolio includes products like relays, while the solutions range from centralised protection and control systems, distribution automation, to bus transfer systems and arc protection for the electrical distribution network. These products are deployed across multiple industries from cement, steel, oil and gas to utilities (power distribution companies) and renewable energy projects through OEMs.

With the new facility, ABB India would now utilise roughly 40 per cent of the 55 acres large plot at Maneja in Vadodara which the company's country head and managing director Sanjeev Sharma said would grow with future expansion. ABB India which operates four business segments including electrification, motion, process automation and robotics & discrete automation, now runs three plants in the Vadodara campus including motors & generators, turbo chargers and now digital substation products & relays.

Commenting on future plans, Sharma said that the company was also planning to set up a plant for services due to the huge number of product installations in the Gujarat region which so far used to be serviced from the Bangalore facility.

At revenues of Rs 2,752 crore for calendar year (CY) 2021, electrification forms roughly 36 per cent of ABB India's topline of Rs 7,666 crore, followed by motion at 34 per cent with revenue of Rs 2,592 crore, process automation at 18 per cent (Rs 1,403 crore) and robotics & discrete automation at three per cent (Rs 255 crore).

While currently at a low base, Sharma said that robotics & discrete automation was the fastest growing division of ABB India on the back of demand from sectors like automotive, food and beverages, electronics, and electric vehicles (EV).

With India seeing only six robots being installed per 10000 workers compared to 100-120 robots per 10000 workers in developed markets, the company is bullish on the segment.

"While multinational companies (MNCs) have been buying robotics, the new trend is that even domestic mid-sized companies are also buying robots for manufacturing since their customers are global MNCs who demand consistent quality... We also see potential in battery factories that will be put up," said Sharma.

According to Sharma, ABB India was more industry focused with more orders coming from the private sector compared to the public sector. While its electrification has some exposure with public utilities, government orders form roughly 15 per cent as of now. "Therefore we are going to tier-1, tier-2 and tier-3 cities and dealing with distributors and OEMs and integrators," Sharma added.

Commenting on the company's short cycle business nature, Sharma said that unlike long cycle businesses, the company was witnessing a conversion rate of just two and a half months wherein orders would come and goods delivered leading to better cash position. "As a result, our cash position is good. When the market kicks up, we don't have to chase (long term) projects because our channels push the products in the market. As a result, ramping up and ramping down is also easy and we are not stuck with bad inventory because inventory cycles are also small," he added.

The company's orders were up by 29 per cent on a year-on-year (YoY) basis for the CY 2021 as against CY 2020 to close at Rs 7666 crore. On the other hand, ABB India's profit after tax (PAT) was up by over 130 per cent YoY to Rs 532 crore with PAT margins up from four per cent in CY'20 to eight per cent in CY'21.

In CY2021, ABB India's export orders grew 47 by per cent to Rs 945.1 crore while export revenue rose by 28 per cent to Rs 904.7 crore YoY.