Business Standard: December 17, 2013
New delhi: the Japan-based global engineering, construction and electronics giant, has said it would invest another Rs 4,700 crore in India by 2016.
The aim is to expand capacities across business verticals such as construction machinery, information technology (IT) services, transport and power equipment. The move is part of a bigger strategy to expand its global footprint, the Tokyo-headquartered company announced on Monday.
The expansion is aimed to triple the sales of Hitachi India Ltd to Rs 20,000 crore and raise local headcount by 5,600 over the period. “The expansion will comprise providing services in the construction machinery and IT segments, apart from engaging in supplying urban transport equipment for the metro trains or monorails here,” said Junzo Nakajima, executive vice-president for the Asia-Pacific.
India currently accounts for only one per cent – Rs 6,700 crore – of Hitachi’s global sales. The expansion will raise local sales to three per cent of the overall figure by 2016. “Our global revenues would rise from ¥9 trillion to over ¥10 trillion at the end of the period,” said Nakajima.
The company, however, said it was rethinking an earlier plan to set up a power equipment manufacturing facility in a joint venture (JV) with Hyderabad-based BGR Energy Systems. “The Indian power market is going through a slowdown,” noted,” Ichiro Iino, managing director, Hitachi India.
He also said the company was seriously looking at an opportunity to supply nuclear power plants in India, as part of another JV with US-based GE.
India is part of the company’s nuclear business interest outside of Japan, through GE-Hitachi Nuclear Energy. “We are also talking to Delhi Metro Rail Corporation and the Delhi government for supplying metro coaches and monorail systems,” said Iino.
It is also hoping to bid for supplying railway signalling systems, on the Dedicated Freight Corridor project which aims to connect Delhi with Mumbai and Kolkata through an only-cargo rail network.
“The project has been a little slow, though,” observed Iino.
Going forward, Hitachi plans to develop India as a base for exports to expand presence in Africa and West Asia/North Africa.
The company has so far invested Rs 2,300 crore in India, including a desalination plant at Dahej in Gujarat and a solar power generation project at Neemrana in Rajasthan.
“We expect Hitachi India’s revenue for financial year 2013 to grow in double digits,” said Nakajima.
Hitachi currently operates through 24 companies, with facilities across seven states, employing 7,508 people in India.
The overall employee number is set to rise to 13,000 by March 2016
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.