The German multinational corporation Voith GmbH is upbeat on the business prospects in India and the Asia-Pacific region across various verticals. . The €4.25-billion (in revenue) corporation is eyeing the unfolding potential to supply to the Indian Railways, the ongoing and upcoming metro rail projects and proposed fast trains. Apart from focus on the power sector, including hydel projects, commercial vehicles and oil and gas, it sees potential in the paper sector where packaging and speciality papers are expected to gather pace.
Uwe Knotzer, Member of the Corporate Board of Management and Chairman of the Management Board of Voith Turbo, along with senior management of Voith in India, Debashis Basu, Managing Director, Voith Turbo India, and Sumeet Mazumdar, Member of Board of Management, Large Hydro, Voith Hydro India, during an interaction with BusinessLine shared the company’s plans and the way forward. Excerpts:
What is your current mission in India and how is the business doing?
Globally, Voith is celebrating its 150th anniversary and is strategising for growth in the future. We are in India to celebrate this achievement and also draw plans for the future growth where India is expected to play a significant role for the company globally and also in the region for local supplies serving as a regional hub for a number of products.
The paper industry seems to be facing tough times. What is your assessment of the sector and the demand?
The paper industry is passing through a tough business cycle globally and to some extent, India is part of this trend. While paper consumption, and the newspaper industry in the developed markets, has been impacted, the latter can be seen from the shrinking size of newspapers (once newspapers used to weigh about a kg or two), there has been growth in the paper boards and packaging material. The demand from packaging material is likely to grow significantly in India with the need to transport goods and also due to retail and online sales, requiring superior packaging materials.
This has meant that the paper industry is changing and upgrading its machines for new requirements. There is also growing demand for special grade papers and tissue papers. Significantly, every third paper that rolls out globally is from our machines. JK Paper, TNPL, ITC among others have either urgraded or are upgrading and setting up newer machines.
With potential upside to the paper industry and Voith having the capability to offer a wide range of solutions that meet the requirement of the paper industry, the market and the company are likely to see a better phase ahead.
What is the situation when it comes to rail projects, urbanisation related products you supply?
We have been a major supplier to the Indian Railways over the years and expect to continue to do the same as safety assumes much greater significance.
The Indian economy continues to witness robust growth and is expected to see accelerated growth, offering immense scope for Voith to be part of the growth. There are a lot of mega trends, which include urbanisation and transportation, where we play a role. Areas such as urbanisation, where metro rail projects will define the future commute, fast trains, and in commercial vehicles, where we supply next generation braking systems, open up a big opportunity.
We are already engaged in Delhi Metro Rail with our supplies and expect to close in other metro projects, including Jaipur and Kolkata, with our products and solutions. Other metros are also on our business radar.
What about the commercial vehicle segment?
Globally, we are engaged with a number of automotive original equipment manufacturers (OEMs) in rail such as Hyundai Rotem, Alstom and Bombardier and with other commercial vehicle (CV) manufacturers offering them advanced braking systems and retarders. These come in as secondary solutions to existing braking equipment used in the CVs in India. In India, we are engaged with the likes of Tata Motors and Volvo and are in talks with Ashok Leyland Ltd and other CV makers for supplies as these will gain popularity.What are your plans to consolidate Indian business as a hub?
We have production facilities in India which make hydro dynamic power transmission equipment for coal fired thermal plants, equipment for hydel power projects and products for railways and metro projects. The facilities in India will not only serve local requirements, they will also supply to the region serving as a hub. We are already supplying to some markets, including Africa and expect this to go up further. We are talking to Indian Railways to make special products for high speed rails. This will not only mean initial trial orders but also a number of replacement orders.
While we do not break up the numbers for India specifically, the APAC region, including India accounts for about 25 per cent of the total business. This is likely to go up. As the demand goes up, we will add another plant (our third ) near Hyderabad.How about power and oil and gas sectors?
The Pune centre has been playing a critical role in supplying equipment to hydro electric projects in the country. We are engaged with the likes of Tata Power, NHPC among others. We are also seeking to be part of the upcoming projects such as Polavaram to meet requirements in hydel projects, including backup storage.
The oil and gas sector will be a new area of our focus in India. Though there has been subdued business in this space now, we expect, the demand for high pressure compressors and speed drives will offer immense scope and potential.
Over the years, we are engaged with a number of coal based thermal power projects and expect to continue these engagements and bag new ones.