VA Tech Wabag’s entry into diverse emerging markets in water and waste-water management has paid off as more established markets such as the European Union witness turbulence.
The Chennai-based multinational company has significant business units in Europe, but these do not depend on the EU markets. The company does not have any business in the UK and the EU accounts for a small portion of its business, according to Rajiv Mittal, Managing Director and Group CEO, VA Tech Wabag.
In an interaction with BusinessLine, in the context of Brexit, Mittal said: “very little of Wabag’s businesses is from the EU and it has no business in UK” so the company does not expect a significant impact.
For instance, Wabag’s Austrian unit looks to business from North Africa, Namibia, South Africa, Saudi Arabia and Iran. Of the total revenue of ₹2,542 crore in 2015-16, revenue from Europe was 20 per cent with Eastern Europe – Romania and Turkey – accounting for 17 per cent and the rest of Europe 3 per cent. Switzerland, which is not a part of the EU, accounts for about 5 per cent. While it is still early days to assess the impact, if any, Mittal expects that some of the projects in Eastern Europe, which depend on EU funding “may see a slow down” during the transition period. This could impact less than 10 per cent of Wabag’s business, he said.
Emerging markets are doing strong with sub-Saharan Africa and Latin America clusters doing strong and the CLMV (Cambodia, Lagos, Myanmar and Vietnam) will be the strong growth area in the coming year. Wabag’s guidance in the current year in terms of revenue is about ₹3,000-3,200 crore and the order intake is estimated at ₹4,000-4,200 crore against ₹5,140 crore last year.