Schneider looks to raise India's share in industrial automation biz to 25%

Schneider Electric is looking to grow India’s share in global industrial automation business to 25 per cent, from the current less than 10 per cent in the next few years, company executives stated.

Barbara Frei, executive vice-president, Industrial Automation, Schneider Electric, said she was hopeful growth in India’s water, transportation, mining, energy and food and beverages segment will bring in higher demand for these automation solutions.

“I would say clearly the industrial automation business in India should be 25 per cent or more. So that's really the objective,” Frei said, who did not give a time-frame for the same, but expects it in less than five to seven years’ time.

In 2020, Schneider Electric completed the purchase of Larsen & Toubro’s switchgear business which was acquired by Schneider Electric in 2020. That division is now known as Lauritz Knudsen Electrical and Automation.

Part of Schneider’s India plans is to build on this division further. The acquired division, Frei said, is “a small part, but a very good part. It's not that much yet, but the plan we have is to grow it. It will contribute more.”

Electrification of certain processes need larger drives (devices used to aid conversion of electrical to mechanical power), and the Lauritz Knudsen brand will cater well in those segments.

Commenting on the possibility of further acquisitions in India, Frei said the company is always actively looking for potential assets.

Noting that more than 70 per cent of the company’s India business is towards exports, Frei said they would like to sell more within India, while maintaining the 70-30 ratio of export and domestic sales.

Similar to concerns raised by other industry executives, Frei also listed human resource mobilisation as a main challenge in India.

“So we are trying to develop the talent, and we also have the intention to bring more global talents into India,” she said, adding that the talent could be tapped in from Latin America, Africa, and Europe, amongst others, with mid-management and specialisation-level skills.

For Schneider Electric, in terms of pace, India is growing faster than the China market, according to the firm’s executives.

Frei noted the growth expectation from the Indian market is now similar to that from China in the past. “Fifteen years ago, whenever you came to China, the expectation was to grow 20-30 per cent every year. Now that is the expectation from India. I don't think it will be that much for India. But definitely double-digit,” she said.

Globally, Industrial Automation generated revenues of €7,661 million, equivalent to 21 per cent of the Group’s revenues in 2023. In this division’s revenue, Asia Pacific (which includes India), contributed 32 per cent for the same period.