Engineering multinational ABB intends to step up its service offering in India, finding itself “uniquely positioned” to take advantage of the growing market for repair and refurbishment of old machines.
Though ABB sees its “huge installed base” in India giving a “continual opportunity to increase life cycle engagement”, the Switzerland-based power and automation multinational will offer to service equipment manufactured by other companies (competitors) too, Brice Koch, Head of Power Systems Division, ABB Group, told Business Line recently.
ABB has a large presence in India. Its 14 manufacturing facilities turn out some 30,000 products, from small circuit breakers to large transformers. In 2012, it achieved a turnover of Rs 7,470 crore. Business from ‘service’ was Rs 825 crore, or 11 per cent of turnover. ABB hopes to raise this to 15 per cent.
Economic rationale
For service, ABB does not focus on any particular product or vertical, Koch said, but observed that a big chunk of the service orders came from turbochargers and big substations.
He said that awareness about the sensibility of life extension projects was increasing. Giving an example, he said that last year, ABB conducted energy audits for a customer for an “under-performing boiler”. The customer had to invest about Rs 70 lakh to fix the bugs, but the annual savings would also be about Rs 70 lakh.
The scope for providing equipment management and life extension services is only increasing, not only with the expanding equipment base in the country, but also because customers see economic merit in doing up existing equipment rather than scrap it and buy new ones.
Also, newer types of services get added from time to time. For example, ABB provides services such as making machines compliant with the environment norms, data back-up, cyber security and software upgrade.
“There is a continuous endeavour to expand the service portfolio by adding new services and be prepared for future,” Koch said.