The Hindu Business Line : `Rockwell keen on acquisitions in India'

THE $4.1-billion Rockwell Automation Inc is a leading industrial automation company specialising in manufacturer of power, control and information solutions.

Mr Keith D. Nosbusch was appointed President and CEO of Rockwell Automation in February 2004. Prior to this appointment, Mr Nosbusch served as President of Rockwell Automation Control Systems. In an interview with Business Line, Mr Nosbusch outlined the company's future plans for India and the global market. Excerpts:

Six months ago you took over as President and CEO. What are the company's investment plans for the region?

Asia is certainly the place where we look to make additional investments. The Asian region is fastest growing and in the last quarter it grew 24 per cent, with India recording an even higher growth. This year, in India, we expect a growth of almost 40 per cent. So we have seen some very good growth in the region and we see a lot of opportunity to go forward.

What kind of investments are you planning?

The majority of our investments are going to be in people ... people to support our customers. A lot of investments are going to be in sales, engineering skills. We are also looking to invest in partners to be able to extend our market reach and we are also looking to involve more of the skills of India in terms of IT infrastructure and maybe doing more of our IT back office work in India as well.

Would this create a problem of sorts with the outsourcing debate raging in the US?

Basically what we are trying to do is to balance the resources of our company to where our customers are. And so as a company we are changing from being a North America US-centric to being a global company.

So a majority of our resource allocations would be outside the US as time goes on just because of that. We are a company in an industry that requires you to be intimate with customers - you cannot do it from one geography.

So you would see us over time expanding our resources to be near where our customers are and our customers are growing fastest in Asia. So our resources will grow the fastest there ... it's just a reality of being a global company.

Which sectors are you focusing on in India?

In India we have a market that is continuing to grow in some of the traditional space - the metals market, oil and gas, power utilities, cement. The most exciting for the future, though, are areas around consumer products, pharmaceuticals, life sciences, beverage, food and the transportation and automotive sector. And then from an industry view, the OEM market is a growing one in India.

What proportion of your business would stem from the emerging markets such as Asia and the East European bloc?

Well, if we look at Asia today, it is nearly 10 per cent of our business. And India is about 10 per cent of Asia's business. So, as time goes on, we are expecting Asia's share to go up to 15 per cent of our business over the next five years and this would be the fastest growing region for us.

Your balance sheet shows a fairly significant amount of free cash flows. Is that indicative of you planning to go in for acquisitions in the future?

Absolutely. We are very keen on acquisitions. We have a very strong cash flow position and we are looking at acquisitions around the world including India. And we would like to spend some of our cash on acquisitions.

Any plans to develop India as an export base?

We do not do a lot of manufacturing here in India. However, we want to build on the engineering capabilities of India to export domain knowledge.

We want to grow our engineering and IT capabilities here and they will be leveraged around our companies globally. We do more for our customers from here and will develop more back office capabilities in India.

What are your key drivers for growth?

The greatest growth potential exists in the control systems business. Power systems and industrial control components are also expected to grow in single digits.

Our highest growth would come from our software businesses. The new markets that are starting to grow include consumer products.

Would the acquisitions that you are looking at be in IT, manufacturing or services?

The acquisitions would be in the space that allows us to do more for our customers.

It could be in the information space for us to deliver more applications for our customers, resources to deploy solutions in system integration capabilities or software applications.