The Hindu : Business : Alstom, Infosys to set up $40 m R&D facility

Online edition of India's National Newspaper
Wednesday, Jun 01, 2005

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Business

Alstom, Infosys to set up $40 m R&D facility

Special Correspondent

Push to India's emerging status as global engineering hub

BANGALORE: French power equipment giant Alstom will open an R&D centre in partnership with software major Infosys Technologies, involving an investment of $39 million that will employ 300 engineers and give a big push to India's emerging status as a global engineering hub.

This is part of Alstom's plans to earmark a fifth of its annual global research and development budget to the Indian power sector where it is an active player bidding for equipment supplies to generation projects.

"Alstom plans to focus 20 per cent of its 600-million-euro ($743.1 million) R&D spending worldwide in India," Philippe Joubert, President, Alstom Power, told reporters here while announcing the decision to set up an R&D facility in tandem with Infosys. The facility to be located at the headquarters of Infosys in the Electronics City on the outskirts of Bangalore would be the first such centre of Alstom worldwide and had the potential to emerge as the company's largest R&D outfit, he said. Alstom reckons that the new centre, a multi-year relationship between the two entities, will help build products and solutions for the Indian market at a faster rate than from its existing labs.

"The centre will focus on product development, engineering simulation, control engineering and product lifecycle management. Alstom will be investing $39 million while Infosys will invest in setting up the necessary infrastructure," Mr. Joubert said. The investment in the centre and the recruitment would be spread over the next three years. It will initially employ 60 engineers and ramp it up to 300 by 2008.

Nandan Nilekani, Managing Director and Chief Executive Officer of Infosys, said India was emerging as a global hub for engineering services in the automotive, aerospace and power sectors. Outsourcing to a low-cost economy has become a competitive necessity. "About 50-70 per cent of the product cost is decided at the design stage. Given the pressure on R&D and engineering heads to focus on innovation, India is increasingly being looked at as a global engineering hub," Mr. Nilekani noted.

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