NYSE listed Valmont, a $ 3 billion producer and distributor of products for infrastructure and agriculture industries, is expanding its manufacturing presence in India to tap into the domestic market. Chairman and CEO Mogens C Bay, on his recent visit to India, has drawn an aggressive roadmap for the firms India unit for the next 4-5 years.
This includes taking the India units contribution to the global revenues to 5 per cent and using India as an export hub for other emerging markets. For Bay, the foray into the India market has been a bit late, but the sheer size of the country and the need for infrastructure development makes Valmont’s investment in India worthwhile.
“I always get asked that how do you justify your investments in India? Over 21 years as a CEO I have realized that forecasted numbers are not final all the time. When I came to India I figured that India is a large country and has to invest in infrastructure. I had never doubted the fact that India will be a big opportunity, what mattered was how fast will it grow? My only focus was to make sure that we build a strong company that can execute well,” said Bay.
Valmont, that provides lighting and traffic structures, communication towers and utility structures and irrigation equipments, entered India in 2008 and started to build its own facility in 2010. The manufacturing facility in Indapur, Maharashtra was operational in 2011 with a total investment of $25 million. The company has about 250-300 employees in India. At present the market size of all its products combined will be about $500 million in India, said industry sources.Bay expects the India centre to have a double digit growth in the next few years. “We are still small in India, having just started the operation. I would say Valmont India is a at startup stage and in next 4-5 years we are expected to contribute approx 5 per cent of the global revenues. I think India has a much bigger capacity to become a larger player,” he added.
For Bay though the growth of the company in India will also be governed by how quick the government is on infrastructure spending. “We do work with private players like the telecommunications players, but I think what matters is the government’s commitment to build the country’s infrastructure. The only organisation that can build infrastructure is the state or central government,” he added.
At present the company is looking at power distribution, transmission and telecom and based on the current scenario growth in these segment is expected to be more than 10 per cent.
