For us, India may become larger than China: Schneider Electric CEO

India is Schneider Electric’s third largest market and the company made the country its fourth hub after the US, China and Europe. Peter Herweck, chief executive officer (CEO), spoke to Amritha Pillay about India outpacing global growth, labour-related challenges, and growth drivers. Edited excerpts:

How promising is India to Schneider Electric?

Schneider globally has 150,000 employees, 25 per cent of whom are in India. Here is a country of big opportunities and development possibilities. I met the power minister and discussed what the hunger of the country is for power. Electrification is one of our expertise. If you look at the population, which will move into urban areas, it is 500 million people in India. Young people do not want to move to an urban area that is not digitised. That is why smart cities are being developed, and need to be fully digitised and fully electrified. We feel at home here.

What kind of opportunities does India’s growing demand for power hold for Schneider Electric? Would that translate into more hiring and increasing capacities?

About 14 years ago, we had 2,500 employees in India, and it is 37,000 this year. Am I going to continue at the same speed? Maybe or maybe not. We are building five factories as we talk. As we are growing, we will also grow our employee strength. We have announced an investment of Rs 3,200 crore in the next few years. I am challenging the team as there is more potential. Let us have another growth plan or shorten the period.

What is India’s revenue share in the global pie? How has the growth trajectory been?

We are not disclosing those numbers. However, in terms of size, India is our third largest market after the US and China. If the growth rates continue, then India, in my business life, is going to be larger than China for us.

Has India revenue and order book growth rate, for the company, outpaced global rates?

Yes. If the country has a GDP growth of 8 per cent, it is the best among large countries. When we say we want to outgrow GDP significantly, then you already know that it is growing faster than the company.

What are the challenges to this growth?

I only see opportunities, which can also be a challenge. It is always the availability of having enough talent to drive it. It can be a simple thing of having enough electricians, enough engineers, enough transportation capabilities and good infrastructure.

How about political stability as a factor?

As a business leader, it is important to have a stable and predictable environment, for long-term decision making. The stability we have seen in the last one decade has truly helped in somewhat accelerating progress.

In 2020, you acquired Larsen & Toubro’s electrical and automation (E&A) business in India for more than Rs 14,000 crore. How has the acquisition worked out for the company?

The E&A division has given us a completely new coverage, more rural areas, and made us expand into farming as well as irrigation solutions. We are very happy and what does happy mean — the financials, customer feedback and overall people engagement.

Are you looking for more acquisitions in India that offer a similar scale?

The primary focus of the team is to grow organically. And if opportunities come up, we will be open. Companies like ours always need to be actively looking for opportunities.