India may become engg sourcing hub

Global engineering companies such as Siemens, Cummins, ABB, Aker Kværner, Wartsila, Alfa Laval and SKF are planning to increase their sourcing of engineering equipment and services from India three-four times from the current level in the next three years.

The companies will eventually make India their components and services sourcing hub for the global markets. The objective is to save costs by transferring operations to countries like India and China without compromising on the quality.

Going by the strategy, ABB plans to source high-voltage circuit breakers, medium-voltage outdoor circuit breakers and magnetic actuators from India in a big way.

Meanwhile, SKF's application development centre for two-wheelers and Bangalore's automotive market is being built up as a global hub for providing engineering solutions for two-wheelers.

The Indian unit has provided solutions to global two-wheeler majors that include Suzuki, Kawasaki and Honda. SKF is also planning to step up the sourcing of bearings from its Indian subsidiary.

Anglo-Norwegian engineering firm Aker Kværner has already set up a team, which will work with the group's Indian subsidiary Aker Kværner Power Gas for selecting and obtaining materials and services from the country, said Stan Bogiel, the Aker Kværner group's senior vice-president for global sourcing.

"The focus of our global procurement would shift to India and China from the West. This would help us minimise risks without compromising on quality," said Bogiel.

Engine maker Cummins is currently examining the feasibility of outsourcing Cummins Inc's back-end jobs ranging from transaction processing to operations in India.

Cummins Research and Technology Institute in Pune will play an important role in the group's future products. The institute will significantly cut down the time spent in prototyping and, thus, reduce the time to market for the group.

As for Finland-based Wartsila Corporation's focus on India, Banmali Agarwala, managing director, Wartsila India, said, "Wartsila's sourcing from its Indian subsidiary will rise in multiples over the next couple of years."

He added: "Wartsila India will provide its parent with equipment and components such as reduction gear boxes used in ships, castings, forgings, switchgears and electrical cables. Manpower within Wartsila India would help in erection of power plants."

On the other hand, Alfa Laval India is planning to double the manufacturing capacity of equipment like heat exchangers, separators and fluid-handling equipment and decanters. The Swedish parent Alfa Laval AB will source about half of its Indian arm's production.

On a recent visit to India, Siemens President and CEO Klaus Kleinfeld said Siemens India, with 13 manufacturing facilities in the country, is positioned to play a larger role in its parent's operations.