Honeywell upbeat on Indian biz opportunity.
A Fortune 100 company, the US-based Honeywell is increasing its footprint in India with products and solutions customised for the local market. In an interview with Business Line, Dr Krishna Mikkilineni, senior vice-president, Engineering & Operations, and President, Honeywell Technology Solutions (HTS), says emerging economies such as India and China are the next big market for his company.
When did Honeywell start looking at the emerging markets as a focus area? What is your approach?
Honeywell is present where the growth is. Our emerging markets business is growing rapidly through our East 4 East and East 4 West (E4E and E4W) strategy. Technology is at the core of this strategy, which seeks to deliver products and solutions tailored exclusively for the emerging regions on the one hand, and those that have been developed for the emerging markets but have a potential in the developed or Western markets on the other. Our approach also addresses macro trends, such as energy efficiency, urbanisation, aerospace and transportation.
We are very upbeat on the India market for various reasons. The investment in infrastructure is expected to double to $1 trillion over the 2012-17 period with 50 per cent of it coming from the private sector. Likewise, the reform programme in the energy sector is a major focus area for us as government regulation on energy efficiency is happening.
What is Honeywell's approach to technology for the emerging regions?
We are identifying unique challenges that economies are facing in the emerging markets, including bottom-of-the-pyramid issues. These call for unique solutions and services, for instance in the energy sector, tele-health or the automotive sector.
How big is the opportunity in the PPE (personal protection equipment) market?
Honeywell is the biggest player in the personal protection equipment market, particularly after the $1.4-billion acquisitions of Sperian Protection and Norcross Safety Product. Though globally the PPE market size is estimated upwards of $10 billion annually, in India, it is still nascent but with immense growth potential. According to consulting firm Frost & Sullivan, the total Indian PPE market is anticipated to grow at a CAGR of 12.6 per cent up to 2016 to reach $304 million.
The key drivers in India will be the increasing manufacturing activities in the country even as awareness and acceptance of PPE goes up in user industries. But the PPE market in India is highly fragmented with high-tech products being imported and high-volume, low-tech products manufactured locally. Honeywell is well placed to address both ends of the market with its presence in the entire spectrum of head-to-toe PPE offerings.
The energy segment is another thrust area for Honeywell. What is your approach for the Indian market?
If you look at it, 50 per cent of Honeywell's product portfolio enables energy efficiency with a leading position in residential, commercial and industrial controls for better energy utilisation and savings. Honeywell is recognised globally for the ubiquitous round thermostat which perhaps is one of the earliest energy efficiency products in the world, providing 33 per cent lower energy consumption. We will also be positioning to be a leading smart grid player in the global energy market. In fact the growing regulation of the energy market makes our core energy efficiency offerings more valuable today.
When it comes to India, few actually know that Honeywell is the country's largest building automation solutions provider and a leader in energy efficiency offerings. In fact buildings solutions is a $200-million market for Honeywell in India today. We are more focused on energy efficiency rather than alternative energy or energy substitution focus. Our strategy is to focus on controls and materials for insulation, etc, to keep energy losses at the minimal.
According to Frost & Sullivan, the Green Building and building management solutions market in India was estimated at Rs 5,000 crore in 2011 and growing at 27 per cent per year. Honeywell is looking to double the TAS (total available segment) to $900 million from the current $400 million over five years up to 2015. Today we have a 16 per cent share of the market which is estimated in the region of $2.5 billion in India.
This is expected to be close to $5 billion by 2015 by when we target a 20 per cent market share. The smart grid solutions market provides a huge opportunity.