 "We want to become the Chinese competitor: Jim Bujold")
For Jim Bujold, president, Honeywell India, the year 2012 was a challenging one with the company recording a flat revenue of around $1.3 bilion (Rs 7,010 crore today). However, with a headcount of 13,000, five product development centres and five manufacturing facilities in the country, the US-based $37-billion technology major would not stop investing for the future, Bujold tells Sudipto Dey in an interview. Edited excerpts:
Do you see any positive impact of the recent Jet-Etihad deal and the Tata-Air Asia joint venture on your aerospace business in India?
That investments coming in is a great news. These help build infrastructure. However, lot of work has to be done for infrastructure modernisation in the (aviation) industry. Our recent win in Chennai for installing ground-based augmentation system (GBAS) is a big deal. (The Airports Authority of India signed a contract with Honeywell for installing GBAS in Chennai airport. GBAS is a satellite-based aircraft approach and landing system that enhances an airport's capacity to handle more planes by providing multiple approaches and helps airline save fuel cost). The combination of investments coming into airports and investments coming into airlines as well as into technology will ensure airports are used more efficiently and safely.
So, you see more opportunities for Honeywell?
Any reaction to the government's just-announced new defence procurement policy?
We would all like to see things move more quickly on the defence side. The procurement process here can be complex to work through. But the long-term trend is that defence spend has been going up year-on-year and we don't see that stopping any time soon. We are very involved in pursuing a lot of opportunities in the defence space now.
From a business performance perspective, how did you cope with a challenging year like 2012?
All the four of our operating businesses globally--aerospace, automation and control solutions , performance materials and technologies (PMT), and transportation systems--are active in India. In 2011, we clocked a revenue of around $1.3 billion in domestic sales and exports (out of India). For 2012, the figure would roughly be the same. The year 2012 was much tougher than 2011.
The aerospace and transportation verticals are very active here. We have a manufacturing facility in Pune that manufactures 1 million turbochargers both for the domestic market and exports. Our biggest business in India, however, is the automation and control solutions (ACS), based out of Pune. From a domestic perspective, the ACS and PMT verticals contribute around 70-75 per cent of the business. The remaining 20-25 per cent comes from the aerospace and transportation systems.
How is the revenue divided between domestic business and exports?
It is roughly 50-50, though it may slightly vary year-to-year. If you look over a two-three year period, then the domestic business is growing faster, but last year, our exports grew faster.
What is the road map for the next two-three years?
The road map is very clear. Our core strategy is to become the Chinese competitor. When I say that I don't mean to bring people from China to build our business. The entrepreneur in China has a reputation of being fast and aggressive in understanding the local markets. We are very much localising the business, and moving the decision-making process closer and closer to the customer. That's our over-arching strategy. Underneath that is our product development strategy which is 'East for East'.
This is understanding the markets in the east, understanding the customers in the east, developing products in the east, to be sold in the east, at the right price points with right features that you need locally. Interestingly, this East for East strategy leads to East to West. When you apply technology to solve problems in the east, then you can take that technology and innovate it for the West..
Have there been instances of products developed for India being taken to global markets?
We have taken the learnings abroad. For instance, look at the turbochargers we produced for the Tata Nano. Clearly, the price points had to be very different from a turbocharger developed for a German high-performance car. We had to learn a lot about material science, applied lot of learning from our aerospace business, and applied it to our turbocharge business to do something on a smaller scale, at a different price point that we never had to do before. Every time you are forced to drive innovation to solve a problem, you learn a lot. We capture that learning and share it across the organisation. The application of technology is so faster in many of these emerging markets that it's causing us to look differently on how we do things.
How much has Honeywell invested in India so far?
I can tell you what we have on the ground. We have five product development centres in India--Bangalore (2), Hyderabad, Madurai and Gurgaon--employing around 7,500 engineers. We also have five manufacturing facilities--one each in Dehradun, Gurgaon and Chennai and two in Pune. People have been our biggest investment. Around 10 per cent of our total global employee base is in India, while the country accounts for three per cent of our (global) revenue. We have around 13,000 employees in India, of which 7,500 are in technology development. Between 2002 and 2012, our headcount grew from around 1,000 to 13,000.
If you look at our business performance on a quarterly or annual basis, you will see lot of volatility. There will be quarters or years of high growth or quarters or years of negative or flat growth. It's kind of like a saw-tooth. But if you look at from three-year, five-year, seven-year, or nine-year time horizons, then we have seen around 15 per cent growth in those time horizons.
We focus on growth rates in the segments that we are in. Because of our portfolio, we tend to grow faster than the economy at large. It gives us a higher bar to shoot for. So, if you look at energy production, energy efficiency, safety, security, customer productivity, those things do not go out of fashion. The heartbeat of our business is new product introduction, its technology. New product introduction becomes more important in a difficult economy. We have not stopped investing for the future.
Do you see any positive impact of the recent Jet-Etihad deal and the Tata-Air Asia joint venture on your aerospace business in India?
That investments coming in is a great news. These help build infrastructure. However, lot of work has to be done for infrastructure modernisation in the (aviation) industry. Our recent win in Chennai for installing ground-based augmentation system (GBAS) is a big deal. (The Airports Authority of India signed a contract with Honeywell for installing GBAS in Chennai airport. GBAS is a satellite-based aircraft approach and landing system that enhances an airport's capacity to handle more planes by providing multiple approaches and helps airline save fuel cost). The combination of investments coming into airports and investments coming into airlines as well as into technology will ensure airports are used more efficiently and safely.
So, you see more opportunities for Honeywell?
More From This Section
Absolutely, whether in the air or on the ground, we have great technology that will help the industry grow. We also see huge opportunities on the airline side, and with the airline manufacturers certainly. Honeywell is right in the middle of building the Indian (aerospace) industry. We have 2,700 aerospace engineers based in India, who are working on India and global platforms. We are very positive about the commercial airline industry growth in India.
Any reaction to the government's just-announced new defence procurement policy?
We would all like to see things move more quickly on the defence side. The procurement process here can be complex to work through. But the long-term trend is that defence spend has been going up year-on-year and we don't see that stopping any time soon. We are very involved in pursuing a lot of opportunities in the defence space now.
From a business performance perspective, how did you cope with a challenging year like 2012?
All the four of our operating businesses globally--aerospace, automation and control solutions , performance materials and technologies (PMT), and transportation systems--are active in India. In 2011, we clocked a revenue of around $1.3 billion in domestic sales and exports (out of India). For 2012, the figure would roughly be the same. The year 2012 was much tougher than 2011.
The aerospace and transportation verticals are very active here. We have a manufacturing facility in Pune that manufactures 1 million turbochargers both for the domestic market and exports. Our biggest business in India, however, is the automation and control solutions (ACS), based out of Pune. From a domestic perspective, the ACS and PMT verticals contribute around 70-75 per cent of the business. The remaining 20-25 per cent comes from the aerospace and transportation systems.
How is the revenue divided between domestic business and exports?
It is roughly 50-50, though it may slightly vary year-to-year. If you look over a two-three year period, then the domestic business is growing faster, but last year, our exports grew faster.
What is the road map for the next two-three years?
The road map is very clear. Our core strategy is to become the Chinese competitor. When I say that I don't mean to bring people from China to build our business. The entrepreneur in China has a reputation of being fast and aggressive in understanding the local markets. We are very much localising the business, and moving the decision-making process closer and closer to the customer. That's our over-arching strategy. Underneath that is our product development strategy which is 'East for East'.
This is understanding the markets in the east, understanding the customers in the east, developing products in the east, to be sold in the east, at the right price points with right features that you need locally. Interestingly, this East for East strategy leads to East to West. When you apply technology to solve problems in the east, then you can take that technology and innovate it for the West..
Have there been instances of products developed for India being taken to global markets?
We have taken the learnings abroad. For instance, look at the turbochargers we produced for the Tata Nano. Clearly, the price points had to be very different from a turbocharger developed for a German high-performance car. We had to learn a lot about material science, applied lot of learning from our aerospace business, and applied it to our turbocharge business to do something on a smaller scale, at a different price point that we never had to do before. Every time you are forced to drive innovation to solve a problem, you learn a lot. We capture that learning and share it across the organisation. The application of technology is so faster in many of these emerging markets that it's causing us to look differently on how we do things.
How much has Honeywell invested in India so far?
I can tell you what we have on the ground. We have five product development centres in India--Bangalore (2), Hyderabad, Madurai and Gurgaon--employing around 7,500 engineers. We also have five manufacturing facilities--one each in Dehradun, Gurgaon and Chennai and two in Pune. People have been our biggest investment. Around 10 per cent of our total global employee base is in India, while the country accounts for three per cent of our (global) revenue. We have around 13,000 employees in India, of which 7,500 are in technology development. Between 2002 and 2012, our headcount grew from around 1,000 to 13,000.
If you look at our business performance on a quarterly or annual basis, you will see lot of volatility. There will be quarters or years of high growth or quarters or years of negative or flat growth. It's kind of like a saw-tooth. But if you look at from three-year, five-year, seven-year, or nine-year time horizons, then we have seen around 15 per cent growth in those time horizons.
We focus on growth rates in the segments that we are in. Because of our portfolio, we tend to grow faster than the economy at large. It gives us a higher bar to shoot for. So, if you look at energy production, energy efficiency, safety, security, customer productivity, those things do not go out of fashion. The heartbeat of our business is new product introduction, its technology. New product introduction becomes more important in a difficult economy. We have not stopped investing for the future.