Thursday, September 15, 2011

Indian market will at least double in next four years

United Technologies Corp.
(UTC), the US conglomerate that makes Carrier air conditioners and Otis elevators, expects to increase revenue in India fivefold to $2.5 billion by 2015, says Zubin Irani, senior managing director for commercial companies at UTC's India unit. Irani, 39, oversees the Hart- ford, Connecticut-based UTC's commercial (excluding aero- space) units in India that include Carrier, Otis and UTC Fire and Security. Irani outlined his firm's growth strategy in an interview during a visit to Hyderabad. Edited excerpts: On UTC and its presence in India: In India, we have been around for over 100 years. We had the first installation (of elevators) in 1892 actually, in Raj Bhavan in Kolkata. And since then, we have been able to establish a leading position in the elevator market with Otis, in commercial air conditioning--that means air condi- tioning for larger projects, offices, etc., with Carrier.
Collectively we have over 80 sales and service offices, four factories and three R&D (research and development) centres, over 4,000 direct employees, and 5,000 indirect employees (in India). Bottom line is we have a very strong and established starting position. On the Indian market potential: In our view, the market will at least double in the next four years, driven by a couple of things. Probably the biggest trend is urbanization--250-300 million people are going to move to the cities in India, and to house those people, to build housing for those people, to make sure that they can travel properly, almost $1 trillion of capital needs to be spent.

Similarly on infrastructure, the government is planning to spend $1 trillion--50% government, 50% private--over the 12th Plan (2012-17). That will be spent on power plants, airports other kinds of projects that require our products.
We see the market almost doubling. Air conditioning was $1.5 billion in 2010; we see that growing to over $3 billion; eleva- tors from about 30,000 units to 70,000 units; fire and security systems, we think, will go from $1.1 billion in 2010 to $2.2 billion in 2015.
On sustainable development of buildings: It is not just about the growth in the market; it is about how the growth is going to happen. To- day, the fact is that buildings consume something like 40% of the world's energy--energy that is used in operating the build- ings and all the material that goes into a building's construction. The fact is that India is aim- ing to reduce its emissions by al- most 20-25% by 2020. We can't do it if we don't focus on more sustainable growth and more sustainable development of our buildings. Most of buildings still need to be built. Over two-thirds of our building footprint is still to be built out.
So, we have on one hand a tremendous challenge, but also an opportunity to really ensure that our building footprint is built in a sustainable way, which means it uses lesser energy, the materials use less energy going in, etc.
That's where frankly UTC comes in. Our philosophy towards sustainability matches very well with what the nation needs today and what the consumers need.
On UTC's business targets and growth plans in India: Our goal is simple. The mar- ket, we said, is doubling. We want to grow four or fivefold in India. We were a little over $500 million in 2010 in sales. We want to be $2.5 billion by 2015, and we want to do this by actually look- ing at four different areas.
One of them is to be basically providing cutting-edge, integrat- ed solutions across building management systems. We are the only company that has a full portfolio--Carrier air conditioning, Otis elevators, fire solutions, security solutions and building management system solutions with automated logic. When we look at ourselves as an integrated provider, we don't have a competitor in the market.
The second thing we are doing is really building a strong operations footprint in India, in terms of how we want to grow our sales moving forward. This involves expanding the capacity of our factories.
The third is to to grow aggressively through mergers and ac- quisitions. We are on the look- out and frankly we are talking to a number of companies, looking at potential partners. It might be either to strengthen our position in customer segments we think are important. It might be to im- prove our solution offerings to customers. Some of them might help us get better local manufacturing capability.
The fourth one is really building our talent. As UTC, we are in a much stronger position to acquire talent as well as develop talent and retain talent rather than say if we operated as sepa- rate business units... So we have started recruiting as UTC from schools; we have set up a system to move talent across business units; we have set up new pro- grammes to bring in talent...
On approach to Indian market: In India, we want to approach the market collectively. Our brands Carrier, Otis are very strong. We want them to contin- ue to be strong brands. But we believe there is additional value, incremental value by going to the market as UTC.
If you look at our market of customers, in India there are probably 30-40 large developers, infrastructure players. That, I would say, constitutes a significant portion of our market, and when you have that situation, you have a tremendous opportu- nity to reach out to those cus- tomers, build stronger relation- ships, and prove that through having delivered in one business unit, we can deliver across the board.
Today, developers are looking to form those strong relationships with reliable partners that can deliver on their requirements because frankly they would rather focus on other things and let somebody take care of their needs for air conditioning, elevators, fire and security in terms of delivery...
UTC looks at India very strategically. It is one of the top mar- kets. Our chairman and CEO (chief executive officer) Louis Chenevert is very passionate about India and has clearly made India a focus in the company. We are looking at adopting a new approach in India. That is why we are going at it this way.
That's why we have set up a UTC corporate office in India, which is not there in other markets.

(Source-: mintlive.com)