Swiss firm Oerlikon, a provider of industrial solutions in machine and plant engineering, is gung-ho about its growth prospects in India.
The company has a plant each in Greater Noida and Belgaum (Karnataka), and is building a third one at Sanand, Gujarat. Jurg Fedier, CFO and interim CEO , Oerlikon told Business Line that the company's turnover from India alone is set to quadruple and reach CHF 1 billion ($1.1 billion) in five years.
The company will opt for aggressive organic growth in the region, strengthen the Oerlikon brand and strengthen national process/structure to ensure growth and cost optimisation. We have also instituted a Country Board/IT/Purchase working group, and established a country rep office as well.
These will be refined further to ensure regional focus.
What about workforce availability and quality of manpower?
Quality manpower is key to our business and India is well-positioned in that regard. In fact, our third plant will add 1,000-plus jobs in India to the existing 2,500-plus.
What is the key challenge for MNCs operating in India?
India has a unique and long business tradition of its own. Some of the large corporates here happen to be our customers. Relationships and understanding of cultural nuances have been the key to our success.
How would you rate the company's performance in 2013?
Despite a challenging global economic environment, our operational performance has been solid this far.
We confirm our guidance for full-year 2013 at CHF3 billion approximately (global turnover).
We expect sales and order intake, as well as underlying profitability, at the previous year's level.
How did you manage to deliver in a difficult environment?
The Group made significant R&D investments in 2012 to refine our products and services and develop ground-breaking technologies and products.
Expenditure on R& D totalled CHF106 million, which was about 4 per cent of our global sales.
In India, three of Oerlikon's segments — Manmade Fibre (earlier called textile, rechristened since the divestment), Drive Systems, and Coating — are the market leaders.
Vacuum is the youngest of all the segments in India but gaining ground rapidly in the premium vacuum technology space.
Are your plants operating at full capacity?
We are full up, in terms of capacity utilisation. In Manmade Fibres, we have stopped booking orders till end of 2014. For Drive Systems, we have started building our third plant in India to cater to the robust demand. In Coating, we are continuing to open new centres, pan-India.
How has the depreciating rupee impacted Oerlikon's performance?
In our view, Rs 60 to a dollar could be the new reality around which businesses will have to operate. We have had a mixed impact, though. In the near term, it could have an adverse impact as customers might defer expansion plans.
But we are already seeing that the current depreciation is aiding Indian exports and our customers are looking to add to their capacities.