Economic Times: September, 2015
New Delhi: Germany's trains-to-turbines conglomerate Siemens AG will invest 1 billion euro in India to add 4,000 jobs to its existing workforce of 16,000 in the country, becoming the first major European conglomerate to commit big bucks in response to Prime Minister Narendra Modi's 'Make in India' initiative. It may look at mergers and acquisitions in software, said Chief Executive Joe Kaeser, who is in New Delhi along with the company's entire board.
Kaeser will meet Modi on Tuesday, his fourth interaction with the PM, in which he will pledge support for 'Make in India', and suggest that the government should expand the slogan to "make it happen in India" to go beyond manufacturing and include societal development, training, automation, etc. He said the company would also consider shifting some international functions to India. A company spokesman later said the CEO was referring to shifting of certain regional responsibilities such as "competence centres".
"We will continue to invest in India. We have invested euro 2 billion in the past 10 years, and we will invest euro one billion in the years to come to significantly participate in Make in India and 'Make it Happen in India'," Kaeser told ET in an interview.
"Make in India is great, but 'make it happen in India' is even greater. Make it happen in India is more than manufacturing. It's about training, about education, about societal development and automation and engineering...," he said. Kaeser said he would discuss this at his meeting with the prime minister on Tuesday.
ACQUISITION AN OPTION
The company plans to blend India's software prowess with Siemens' engineering skills in its business in India.
Acquisition is an option for the German company. "We already have more than 4,000 engineers; more than 75% are software. The ideal thing is that you partner up, team up. We do not rule out M&A, depends. Bringing skills together of software and .... Can be a very rewarding way to grow business. We'll see how it goes," he said. The company is competing with Alstom BSE 3.75 % for a major locomotives order from the Railways, which would be among the biggest such orders in the world in recent times, and the biggest ever from India. Media reports suggest that Alstom may have made a more competitive bid, but Kaeser said he was looking far beyond the order.
"First of all we are in the middle of the whole process. We'll see how it goes. So there's nothing more to talk about at this time. We are not dependent on one single order. We have made it always very clear that this is a very attractive country. We've been here for more than 100 years. Our founder himself has laid the first telecommunication cable from Kolkata to London, which was a fascinating innovation at that time."
SYSTEM FASTER IN EGYPT
While the locomotives order has been delayed for years, Siemens found the system much faster in Egypt, where it recently bagged an order worth euro 8 billion, the company's largest single order in the 170 years of its existence. That order involved setting up 14 gigawatts of power generation capacity, which is three-and-a-half times the size of one ultra mega power project in India.
Kaeser said the situation was different in Egypt, which needed to quickly provide its citizens with basic energy supply and distribution, unlike India which has already taken several steps in that direction. In India, the order for locomotives has not been decided for a decade.
"The country needs to set its own priorities and the companies need to respect that," he said. The Siemens CEO also said he was bullish on oil & gas, although analysts are worried about the oil & gas services and equipment sector after the dramatic collapse of crude prices. Kaeser said he had spoken to industry leaders such as the CEO of Exxon Mobil, Rex Tillerson, who wanted Siemens to develop automated systems oil & gas fields, which he said would lead to double-digit cost savings.