The Hindu : Business : Siemens bets big on base level products

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Thursday, Oct 28, 2010
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Siemens bets big on base level products

Special Correspondent

Investment in these product facilities will cross Rs.1,600 crore

Looking at increased level of localisation
Half of 60 projects in pipeline will be ready by 2011-12

Armin Bruck

MUMBAI: Siemens India, the subsidiary of German engineering multinational Siemens, plans to significantly increase its revenues from its base level products.

The company is targeting euro 1 billion (about Rs.6,100 crore) by 2020 from the current level of around euro 100 million, said company Managing Director Armin Bruck here on Wednesday.

Base level products are simple to use, maintenance-friendly and robust. They are affordable, based on standard technology, and designed for basic requirements of domestic markets.

The company's share in base level products in the domestic market is less than 5 per cent of a total size of around euro 30 billion. In India, this segment accounts for 70 per cent of demand for products while high-end product segments accounting for the balance.

Earlier this year, Siemens India announced six new hubs for its base level products including ring main units, steam turbines (above 45 MW), solutions for iron and steel making equipment, EPC execution for full turnkey power plants, wind turbines, and low-end signalling systems.

According to Mr. Bruck, by 2012, Siemens' investment in facilities for base level products in India will cross Rs.1,600 crore.

This includes investment in a wind turbine manufacturing facility, investment in the six hubs and the usual investments in the country. Siemens India already has eight base level products in its portfolio.

These include outdoor vacuum circuit breaker, C-arms, steam turbine (below 45 MW), switch mode power supply, windmill generator, X-ray machines, medium voltage air insulated switchgear and Sanjeevan Mobile vans. According to Mr. Bruck, “out of 60 projects in the pipeline, around half would be ready by 2011-12 and the balance by 2014-15.''

As part of its strategy, Siemens India is looking at increased level of localisation. “Our power equipment products are already localised to the extent of 90 per cent.'' The turbine manufacturing has been localised in Baroda while C-arms are being exported to 35 countries and X-ray machines are now being made in Goa with a significant portion of localisation.

On possible acquisitions by Siemens in India, Dr. Bruck said, “we will not acquire a company for achieving market reach as we already have 36 offices in India and if an acquisition is done, it will purely be for products that are not in our portfolio.''

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