ABB India sees revenue doubling to $1 billion

ABB India expects to double its revenues to $1 billion from around $500 million now over the next few years, Fred Kindle, ABB's chief executive officer-designate told reporters in Bangalore Monday.

Kindle, who is on his first visit to India, did not specify any time line within which the Indian arm hopes to achieve this target.

"India is one of the fastest growing operations within the ABB Group and we see tremendous opportunities for further growth," said Kindle.

He said Indian operations would continue to report strong, profitable, and sustainable growth.

Earlier today, ABB announced that the company has a comprehensive three-year investment programme in India with an outlay of around $100 million for capacity and range expansion.

The company is also setting up a global engineering centre in Bangalore and ramping up its research and development staff to 500 over the next two years from 100 now.

The capital expenditure programme, which began in 2004 also signals the start of ABB's largest market shift from the EU and US to Asia and particularly to China and India. Asia last year accounted for around 25 per cent of ABB global revenues.

Kindle said that by leaning on the ramp up, ABB will also begin sourcing seven new products from India. Besides the spend on doubling capacity across several product lines, ABB has earmarked a "considerable" amount to augment its research base as well.

For that, the company is increasing the employee strength of the global corporate research centre here from 100 to 500 in the next two years.

ABB is ramping up its global engineering centre in a phased manner to 500 man years of engineering and system consultancy to group operations.

He said, "we are keen to increase our presence here as a key regional and global resource base for projects, products, services, R&D and engineering."

The expansion includes new manufacturing lines for high tension (HT) machines, distribution transformers and traction transformers at Vadodara; electronic AC drives, control products and several low-voltage products at Bangalore; packaged substations, Ring Main Units (RMU) at Nashik and Motors at Faridabad.

Further, to meet the global requirements, the company is adding capacities to the lines turning out power transformers, low-voltage motors, medium-voltage indoor circuit breakers and magnetic actuators.

With this, ABB India's exports which have averaged 30 to 40 per cent annual growth in the last four years to reach Rs 300 crore last year, are set to grow exponentially in the next few years.

Kindle added that ABB's global restructuring is over and its core portfolio is unlikely to undergo any revolutionary changes.

"Henceforth, changes, if any, will be "evolutionary", he said in a reference to the group outsourcing non-core activities like infrastructure management to IBM. ABB's acquisitions will centre around small firms for now and medium to large firms in the next 18 months.

Meanwhile, while ABB globally has outsourced its infrastructure activities to IBM, it's Indian arm has moved a step further.

ABB India has contracted key applications as well to other third parties.

Ravi Uppal, managing director and country manager, ABB India, said that other processes outsourced include warehouse management and product movement.

He said the company's all three business segments""projects, products, and services""are "poised for growth." He did not offer more details.

ABB reported an income of Rs 1,502 crore for its financial year 2003 (January-December).

For the July-September quarter of 2004, ABB reported a net profit of Rs 35.97 crore on income of Rs 575.4 crore.

Kindle said the company was stepping up its focus on Asia and there would be continued increase in investments in some countries like India.