Oct. 21, 2009 (The Hindu Business Line) --
N. Ramakrishnan
The company is looking to grow in all the divisions it operates in — paper plant machinery, hydro-power plant equipment, industrial services and turbo-drive products.
Dr Hubert Lienhard, President and CEO, Voith AG, admits that the company’s presence in the country “is not impressive… We want to be embedded in the Indian economy in the same way we are in the German economy.”
For this, Dr Lienhard told a team of visiting Indian journalists at the company’s head office in Heidenheim, in southern Germany, “we have now developed a plan that will see a significant growth in India.”
The plan includes acquisitions, he said, without elaborating.
Addressing the journalists at the stately Eisenhof — the over 100-year-old mansion of Friedrich Voith, who laid the foundation for the Voith group, and is now used by the company as a guest house and for meetings — Dr Lienhard indicated that Voith would draw inspiration from another German company, Bosch, to grow in India.
Inspiration from Bosch
“Bosch is a role model for us,” he told the journalists, on a visit sponsored by Voith to some of its manufacturing facilities in Germany, last week.
“Bosch has grown enormously and has achieved this combination of local talent and European talent.”
He cites Bosch’s efforts in developing the fuel pump for the Nano (Tata Motors’ low-cost car) when people in Germany thought it could not be done, as an example of the model that Voith would like to follow. Voith will adopt the same model in its development centre in India.
In 2007-08 (October-September) financial year, Voith received orders of €241 million in India, which is four per cent of the group’s total, and reported sales of €145 million, making up 2.9 per cent of the group’s sales of €4.9 billion. The results for 2008-09 of this family-owned company have not yet been announced.
Dr Lienhard said Voith was discussing with Tata Motors and Ashok Leyland, the two leading commercial vehicle manufacturers, how to develop hydrodynamic retarders for their trucks. (The retarders, that come fitted with the vehicle’s brake system, help slow down a vehicle, preventing wear and tear on the brakes.)
According to him, Voith will shortly inaugurate its Vadodara plant that will make runners for hydro power plants. The company has set up an engineering centre in the country for small hydro power plants (up to 30 MW in capacity), which will serve as its global engineering.
Voith sees good growth potential for all its businesses in India. It has installed most of the paper plants in the country. At a per capita paper consumption of 7 kg, Voith believes that paper consumption in India will grow as the economy picks up steam. China’s per capita paper consumption is 60 kg and Korea’s 170 kg, Dr Lienhard says and adds that India’s too has to increase in the years to come.
Industrial service
In industrial services, another major segment for Voith, too the company anticipates good business. Voith takes over the complete maintenance of a manufacturing unit, leaving the company to concentrate on its core function.
He says that Voith has held discussions with companies such as Maruti Suzuki to take over their plant maintenance. “We are waiting for the first order.” Industrial services as a concept do not exist in India today. China was like this four years ago, but now it is a major market for these services, according to him.
Voith is involved in a number of hydro-power projects in the country. It also held discussions recently with Athena Energy Ventures, in which PTC (NASDAQ:PMTC) India and Infrastructure Development Finance Company (OOTC:IFDFF) are equity holders, to supply equipment for the hydro-electric projects it has planned, according to Voith officials. Athena plans to have nearly 4,000 MW of hydel plants in Arunachal Pradesh and Meghalaya.
