ABB’s global business rejig will benefit Indian operations

ABB India will gain from its parent company’s new business strategy focusing around automation and digitisation as it is in line with India’s growth areas, according to a senior company executive.

As part of the restructuring, the Swiss major had announced a global deal with Hitachi for selling its power grid division. Indian investors have been concerned about the deal valuation as well as potential opportunity losses considering that the power grid business accounts for around 40 per cent of ABB India’s revenue (compared to just a quarter of ABB’s global revenue).

However, ABB India’s Managing Director Sanjeev Sharma assuaged these concerns by saying that “it is business as usual.”

According to him, the company’s shift to a new business structure with focus on businesses around digitisation and automation has worked well for India’s operations.

ABB is expected to announce strategy updates along with Q4 and 2018 year results in the end of February. The closure of $11-billion deal with Hitachi is expected by the first half of 2020 with ABB initially retaining 19.9 per cent in the equity of the business.

Four divisions

Over the last two years, ABB re-classified its diverse business into four new segments — Electrification (products and systems for electrifications of buildings, factories as well as solutions for transport electrification), Industrial automation, Robotics and Discrete automation and Motion.

All these business are already on a well-established growth trajectory in the country, Sharma pointed out, as it comes at a time when India itself is undergoing a huge transformation in the energy, transportation and infrastructure space driven by digitisation, electrification and shift to cleaner energy.

“We believe that many sectors in our focus area are well-matured and new emerging sectors are accelerating with a strong demand for ABB portfolio,” Sharma told BusinessLine . “This reflects in growth in our Industrial Automation, Electrification Products and Robotics and Motion divisions’ base orders in last few quarters and solid intake of digital orders from industrial customers,” he added.

ABB’s electrification, industrial automation and robotics and motion segments (the company will continue to report these segments till April, 2019) have recorded a revenue growth of 21 per cent, 18.5 per cent and 32.7 per cent respectively in Q32018 (ABB India follows calendar year).

According to Sharma, the company has also seen consistent double-digit growth in base or short cycle orders since 2016.

The country’s thrust on renewable energy has helped ABB India commissioning more than 1 GW of the solar SCADA solutions in 2018 and securing orders for another 1GW. While ABB has been strong in solar inverters space, it has also sold around 11,000 solar pump drive packages in 2018.

Robotics segment

ABB’s robotics and robotics process automation business in India has been growing at double digits as not only automotive industry but food and beverages segment, paints and chemicals, pharma, packaging, warehousing and other industries have started investing in these solutions to optimise operations.

Currently, ABB is remotely monitoring of more than 5,000 connected robots and almost 150 process plants globally from India.

ABB currently has 430 digitally-connected drives remotely monitored in India, and in 2018 alone, the company has sold close to 300 smart sensors deployed across various industries from utilities to cement and steel plants to food and beverages industries.

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