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What is the medium- to long-term strategy for India in the overall scheme of things at Siemens?
India has always been important for Siemens, both as a market and as a manufacturing hub. With about 18,500 employees, more than 20 factories and about 55 sales offices, Siemens India is best placed to drive customer proximity and market penetration. On a global basis, we want to better exploit our markets and grow faster than our competitors. We realise we have some catching up to do in this respect. That’s why we changed our new regional set-up. We will do that with one entire hierarchical level less —the clusters. Instead, 30 lead countries that account for about 85 per cent of our business, will report directly to the managing board. India is a prominent member of these 30 lead members. Here, we will pursue our strategy with the so-called SMART products; these offerings are simple, maintenance-friendly, affordable, reliable and timely-to-market.
Our portfolio perfectly matches the needs of the Indian market, and SMART solutions, with their balance of quality features and affordability, hold the key to market penetration in India.
With weak macros and political uncertainty in India, several infra projects and other capex-related spending have faced a setback. How is Siemens preparing to address this?
Like the rest of the industry, the slowdown has affected Siemens India, too. This would improve once the government hastens decision-making on large, critical infrastructure projects. It is difficult to predict the future, but I am sure political leaders are doing what they believe is the best way forward. To succeed in a market such as India, you need to truly understand it. That’s where Siemens has an advantage — we’ve been active here for more than 145 years. The government plans to double healthcare expenditure from one per cent to 2.5 per cent of gross domestic product, according to the 12th five-year Plan. The Plan envisages an investment of about €750 billion (about Rs 64 lakh crore) in infrastructure.
India aims to add 85 Gw of power capacity during the 12th Plan.
Do you favour of a larger role for Siemens outside India and Sri Lanka, considering its capabilities and strength to execute projects in various sectors?
The fact that India is one of the 30 lead countries within the new regional structure will pave the way for countries in South Asia, including Bangladesh and Sri Lanka. With the new regional structure, we are starting to redefine and make our go-to-market organistion more effective.
What will be your strategy for the green energy business?
Green energy continues to contribute significantly to our global revenues; even in India, the market demand is addressed on a case-to-case basis. But we are perfectly positioned to benefit from the opportunities. Not only in the field of energy, Siemens is positioned through the value chain of electrification. The growing influence of digitisation on our portfolio of products and solutions and the growth of automation play a crucial role in this respect.
Often, investors in India complain of the poor disclosure of Siemens India, compared to the elaborate disclosures seen after the quarterly results of Siemens AG. What would you do, if at all, to improve this?
That is a question that has to be discussed by regulatory authorities. At Siemens, we are committed to transparency and have been making adequate disclosures. In general, at Siemens, we are determined to meet — and wherever possible, exceed — all legal and ethical requirements.
Siemens has a very complex web of companies in India. Some are owned by Siemens AG, some by Siemens India and some are joint ventures, etc. Would we see a cleaner /leaner structure for India entities?
Siemens has been consolidating various entities into the flagship Siemens Ltd. Over the past two-three years, the number of Siemens entities operating in India has been reduced from around 20 to 13. This consolidation is ongoing and we constantly seek opportunities to deliver sustainable profitable growth and add investor value by consolidating Siemens Group businesses.
With the parent’s stake at 75 per cent in Siemens India, why don’t you consider delisting from Indian bourses, as has been done by several global entities?
There are no immediate plans to delist Siemens Ltd.
