Financial Daily from THE HINDU group of publications
Thursday, Mar 16, 2006
Financial Daily from THE HINDU group of publications Thursday, Mar 16, 2006 |
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Electrical Goods Corporate - Mergers & Acquisitions ABB eyes acquisitions, takes cautious approach Our Bureau
Growth areas Mr Fred Kindle, CEO, said West Asia , Latin America apart from China and India were some of the main drivers of growth for the company. India's rapid economic growth had made the country a hot favourite for ABB's commitment.
FOR RIGHT FIT: The President and CEO of ABB Group, Mr Fred Kindle, with the Karnataka Chief Minister, Mr H.D. Kumaraswamy, at a meeting in Bangalore on Wednesday. — V. Sreenivasa Murthy
Bangalore , March 15 ABB has said it will once again start making acquisitions to grow its global business. However, it would take a cautious approach not to embark on any `fantasy'. "We are ready to make acquisitions but with the company having made a very strong growth in 2005 through organic route the company will weigh the option of acquisition only if the internal assessment of risk and cost management parameters permitted them to embark on acquisitions," said Mr Fred Kindle, President and CEO of ABB Group. Mr Kindle said it might make one or two acquisitions this year but in 2007, it will aggressively pursue acquisitions. "We will continue to focus on organic growth. But it should not preclude acquisitions if they are of the right fit," Mr Kindle said. ABB had gone slow in acquiring companies before its turnaround in 2004. Mr Kindle said West Asia , Latin America apart from China and India were some of the main drivers of growth for the company. He said by 2009, the global economic growth curve could show a dip prompting him to project a five per cent growth for ABB.
Main driver
However, he said India's rapid economic growth had made the country a hot favourite for its commitment reflecting in ABB's investment of $50 million out of the $100 million investment it had announced in 2004. The rest will be invested before 2007, Mr Kindle said.
New plants
The ABB India's Vice-chairman and Managing Director, Mr Ravi Uppal, said the company has invested $20 million in two of its new plants in the country. These include a unit in Haridwar and another in Nashik. The units are expected go on stream later this year and early next year, respectively.
Growth expectations
Mr Uppal said ABB India expected a double-digit growth and with the power reforms making a progress, the company was confident of doubling its topline in the next five years. Stating that the capacity growth was tardy against the realistic capacity of an additional 1,50,000 MW to meet the peak demand, Mr Uppal said "India needs to take immediate measures to enhance its power capacity." He lauded the Government for its move to award contract for all future power projects on those who quote the lowest tariffs rather than on the level of investment. During his visit to India, Mr Kindle inaugurated ABB's global operation and engineering centre in Bangalore. He also met Karnataka Chief Minister, Mr H.D. Kumaraswamy to discuss the company's future projects in the State.
More Stories on : Electrical Goods | Mergers & Acquisitions | Engineering | ABB Ltd
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