ABB, a Swedish-Swiss multinational automation company providing solutions to the utilities, industry, transportation and infrastructure sectors, has not only scaled up its India business, but transformed it from a supply chain centre into an R&D hub serving both domestic and global markets. Industry digitalisation is the new area where ABB could tap into India’s expertise and potential, said Ulrich Spiesshofer, its CEO, in an interview with BusinessLine .

Digitalisation is a new theme for ABB globally. How are Indian operations supporting this new shift and what are some of the innovations across the main business verticals on this front done here in India?

We have strengthened the role of ABB India in recent years. In the past, we had global products and tried to sell them in India, then we localised manufacturing, and now, we have a strong R&D capability here that helps us and drives product development, offering solutions both for India and abroad.

ABB India has a very strong engineering capability for utilities and we have transformed the role over the last five years making it a real corporate global centre of R&D.

In industrial automation, we focus on control and the software side, we also have a strong cybersecurity team here. In the development of new control systems or applications of control systems, the Indian team plays a fantastic role.

We have just completed a project in Saudi Arabia where we are an automation partner for a large downstream oil and gas chemical plant and the Indian team has an absolutely crucial role in driving it forward.

On the transport and infrastructure side, we have got rail solutions here that we are continuously developing. We are also working here on building automation capabilities.

Can India become a significant export hub for ABB? What are the challenges?

Altogether, the Indian team is playing a very strong role and also originating and driving R&D. Today, we have a very strong “India for India” and “India for the world” kind of activity here. We are expanding our export activities. Some years ago, it was at 10 per cent; now, we are at 15 per cent, but there is more to come.

Historically, the biggest challenge was to have predictable, reliable product quality coming out of Indian manufacturing, our team has solved this challenge. The second challenge was to set up an export supply chain. The government simplification of export procedures is helping there. Our own supply chain efforts are helping. The free trade arrangement that we have with South-East Asia is helping. So today, we are at a much better position to drive exports.

How big is the digitalisation opportunity in India and what are the challenges in its adoption by industries and government agencies?

Digitalisation in industry is a significant opportunity for ABB globally. If we were to be doing everything that we do in digital solutions today, we could cut about $1 trillion in cost for our customers. If we could extract only 2 per cent of that $1 trillion, we would have a growth opportunity of $20 billion for ABB altogether.

Given that India is a place where digitalisation is something that is pretty much in the DNA of people’s thinking, that we have industries here like ICT and finance that have already progressed in digitalisation, we have a country very open to the opportunities in digitalisation.

Are you planning any new investments in India to support this growth?

In the last couple of years, we have invested in local engineering capabilities, in digital solutions design capabilities, and we have hired more than 1,000 people for our global business services centre.

So, India is a part of a continuous development pattern and we continue investments with three basic intents: to do more in ‘India for India’; strengthen ABB India as an export centre; and thirdly, to strengthen ABB India’s role in the context of the global ABB.

Today, we have 47 manufacturing facilities, and 22 service centres, out of which the vast part is going to the digital space, so it is not about adding more locations, but adding more content and people in these locations.

We are continuously hiring; we have 11,000 people today, while when I started at ABB it was just 3,000 people.

Apart from digitisation, what are the areas driving your revenue growth in India?

If you look at what we do at ABB, we bring power from any power plant to a consumption point. So, if you look at the electricity value chain from the power plant to the consumption of electricity, its a phenomenal growth opportunity.

Renewable energy sources are kicking in, and there will be more feeling points, longer distances, more volatility, less predictability, what a wonderful opportunity to create value as a key technology player.

If you look at the end of the electricity value chain — on the demand side — there is electric mobility coming to the masses, data centres coming in, smart cities, all of this requires technology for electrification. So, the underlying growth pattern of our portfolio is very strong.

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