India’s appetite for quality certification growing: TUV Rheinland India chief

For any expat-CEO, to spend five years in India during one of the most turbulent periods in global economy should be a tough calling. It would all the more be so if he is heading a company in a nascent sector like quality certification.

But for Enrico Ruhle, who has been heading the Indian operations of TUV Rheinland India Pvt Ltd as Managing Director since June 2007, it has been a rewarding period with the Indian operations recording a scorching 35 per cent growth YoY.

In an interview to Business Line , he shares his thoughts on the demand for quality certification in India and the company’s plans to meet it. Excerpts.

What is the share of Indian business in the Group's global turnover and how it is growing?

In 2011, the global revenue of TÜV Rheinland was €1.4 billion, whereas TÜV Rheinland India’s revenue was €8.6 million. We are growing at a rate of 35 per cent year on year. We have been observing India for the past couple of years and have seen a quick development. India quite matches the global certification standards and is on par with the West. India is ahead of other emerging countries, with a large scope for improvement. This will help our company to grow in a holistic way and become a one-stop shop solution for all kinds of technical services.

What is your market share in the Technical, Inspection and Certification space in the country? How big is it?

We are one of the leading technical service providers in India. We have six business streams which are further divided into 35 verticals. We have 2,500+ services and our market share is different for each service. For instance, in automobile testing, we have more than 80 per cent market share.

The Indian economy is driven more by domestic demand than exports. Is the demand for TIC growing in India? Which are the industries that seek this certification? Are sellers in domestic markets too opting for it?

The industries that we deal in with are mostly into exports but we also help the domestic businesses manage the competition and growth in their own industry. We also aid them to assess, minimise and mitigate the risks to ensure safety and sustainability in their businesses. India’s exports for August 2012 stood at $22.3 billion. The cumulative figure for the period of April- August 2012 shows exports at $120 billion.

During August, the performance of some sectors with regard to exports are - engineering ( $ 4.6 billion), petroleum products ( $ 4 billion), gems and jewellery ($ 3.4 billion), drugs and pharmaceuticals ($ 1.2 billion), readymade garments ( $ 0.9 billion). India has been exporting and manufacturing hi-tech photovoltaic equipment for many years. While some industries were very well developed, a few others are yet to catch up. The electrical industry in India is much smaller compared with countries like Thailand or Indonesia. But this industry has a huge potential in India and Government should give a push to enable more local domestic manufacturing as India has outgrown its manufacturing capability to avoid imports.

Testing, Inspection and Certification procedure was a recent phenomenon that has caught on in India, ensuring better productivity. Over the years, India has developed a taste for efficient and sustainable manufacturing to meet global standards and the increasing demand for quality products. Apart from exporters who have to meet strict quality norms, the domestic sellers are also opting for certifications to increase product acceptance.

What are you plans for current year?

In Gurgaon, we are opening our new softlines laboratory to cater to textiles, leather, footwear, toys, jewellery and accessories testing. We will be doing all physical, chemical and analytical tests applicable for these product categories. Other cities where we will set up softlines laboratories are Bangalore and Tirupur.

Can you elaborate on your plan of making deeper inroads into the Indian markets?

In India, after a sharp recovery from the global financial crisis and two successive years of robust growth of 8.4 per cent, GDP growth decelerated sharply to 6.5 per cent during 2011-12 but we strongly believe that the Indian market has a huge potential to attract new opportunities and growth.

We are focused on both export industry, where we enable Indian manufacturers to tap overseas markets, and the growing domestic services. For instance, the Indian power sector imports a lot of equipment from around the world. With our office network and state-of-the-art laboratories in 23 locations, we help our customers through inspection and quality control etc.

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