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Not many brands can boast of the continued success of Otis

Venugopal Pillai ,  Thursday, January 17, 2013, 12:17 Hrs  [IST]

Sebi Joseph

— Sebi Joseph, Managing Director, Otis India

Otis Elevator Company, founded in 1853 by Elisha Otis, the inventor of the ‘safety elevator’, is the world’s leading manufacturer, installer and maintainer of elevators, escalators and moving walkways. Sebi Joseph in this exclusive exchange takes us through the Indian operations of Otis. Despite the current economic slowdown, Joseph is very bullish on the future, thanks to India’s rapid urbanization and the country’s commitment to infrastructure development. An interview by Venugopal Pillai.

Otis caters to a wide range of economic segments. Given the general slowdown being perceived in the economy, what would you consider as your main business drivers in the medium term?
Firstly, the elevator industry follows or targets cities with an expanding population. It is these cities that have the highest requirement for people movement vehicles, like elevators and escalators. With cities expanding, infrastructure becomes a key component to the success of a city. With this, high rises and infrastructure projects are something that we are consciously aiming for.

Service is a major business driver for Otis. Today, we have the largest service base of over 55,000 units in India. We are suppliers to giants like Godrej, Tata, Oberoi etc. We aim to be the best service provider because as India grows, the concept of service will change.

We understand that Otis is in the process of significantly expanding and modernizing its Bangalore facility. What is the current status of the project and what impact do you see this expansion having on your product offerings?
To support the growth and demands of the Indian market, and consolidate on the Gen2® platform, Otis will triple the Bangalore factory (Bangalore Works) area to 27,000 sqm, doubling the capacity to 10,000 units by Q2 2013. The factory expansion includes India’s largest test tower at 53m. The plan is to develop the factory to be a primary export hub in the South East Asia region.

Tell us more on the Gen2 technology that Otis recently introduced to India.
Cutting edge technology is the key driver for us at Otis. Our flagship solution, the Gen2® combined with ReGen™ drives, is our forward step in this direction. It has seen unprecedented success, being the fastest selling product in the company’s history. We have has sold over 260,000 units so far. This product does not require lubrication owing to its polyurethane flat belt. The Gen2 family of elevators leverages our flat, polyurethane coated-steel belts and a compact permanentmagnet gearless machine to deliver outstanding performance, reliability and design flexibility. The Gen2 system reduces energy consumption by up to 50 per cent. In addition, this system’s flat belts and gearless machine do not require any additional lubrication, making the system cleaner for the environment.

ReGen drives when combined with Gen2 expand on the efficiency of our elevators, reducing energy consumption by up to 75 per cent by conserving energy that is normally wasted as heat during braking. ReGen drives capture this energy and feed it back into the building’s electric grid for use by other building systems, such as lighting. Even better, ReGen drives produce “clean power” thanks to low harmonic distortion, which minimizes impact on the building’s electrical system and helps protect sensitive building equipment.

In India, we launched a new line of elevators that will bring the benefits of the Gen2 product to social housing projects. The product named Gen2 Nova offers the safety, quality, efficiency and reliability to developers who are building housing to meet the needs of a rapidly urbanizing India.

We observe that Otis has been supplying to a number of green building projects. Tell us more on how Otis products support the “green” movement.
Keeping in mind India’s demographics, rapid urbanization and real estate development, there is a significant demand for highspeed yet energy-efficient building products and services. This is evident from the growing real estate space in the Green category. There is 1.1 billion sqft of registered real estate development under IGBC, and over 1700 projects approved by IGBC as Green structures. Our Gen2 equipment and ReGen drive technology support these green buildings. This also forms part of Otis’ efforts to preserve resources for future generations. Our major global environmental commitment, The Way to Green™, spans every aspect of Otis’ operations globally, from design and manufacturing to products and endof- life recycling.

otisApart from residential and commercial real estate, how significant are urban transport infrastructure projects like airports, metro rails, etc as your business drivers?
Today, theworld is urbanizing at rates never seen before. Below are some facts and figures to support this:
  • By 2030, it is estimated that cities with 1 million + inhabitants will increase by 18 per cent
  • The commercial and residential space required to support this, is equivalent to building a “new Chicago” every year (Source: Mckinsey report)
  • India’s urban population is expected to grow by 40 per cent, to 590 million, by 2030 (Source: Mckinsey report)
  • India’s urbanization stands at 30 per cent today, growing to nearly 40 per cent in 2030 (Source: United Nations World Urbanization Projects)
  • Indian Real GDP Growth stands at 8.0 per cent in 2011, flat through 2013 (Source: Economist Intelligence Unit)
  • 700 million sqm of residential and commercial space is needed for homes and jobs. (Source: Mckinsey report)
  • India is the second largest market for elevators after China. The market is growing at 15 per cent year-on-year.
  • In 2010, the market size for new elevators in India was approximately 40,000 units. It is expected to grow to 70,000 in the next 3 years.
Kamal Nath, the Union Minister for Urban Development and Parliamentary Affairs has projected that India will spend $ 1 trillion on infrastructure development in the country over the next five years and 40 per cent of it will come from the private sector. Future cities and developing economies hold a lot of potential for Infrastructure growth and therefore is a major driver for Otis. One of our big wins in the area of infrastructure is the Mumbai Metro.

What have been recent important projects in India to which Otis has supplied or has been contracted to supply products?
Otis has been instrumental in supplying products to a wide range of customers that include:
  • Kohinoor Square, Mumbai: Otis will provide 47 escalators and 16elevators, including six Gen2 elevators, to this stateof- the-art office. We will be installing our high speed gearless elevators with a speed of 6 mps in this tallest commercial tower.
  • Kohinoor Hospital, Mumbai: For this project, the first LEED Platinum hospital in Asia and the second in the world, Otis will provide elevators, including Gen2 elevators, and escalators to this environmentally friendly 150-bed specialty hospital.
  • The Capital, Mumbai: For this upscale 70m tall commercial complex, Otis will supply 20 Gen2® elevators with Regen™ drive technology, Compass™ Destination Management system and Otis’ web-based EMS Panorama™ system.
  • Planet Godrej, Mumbai: 15 Otis high-speed gearless elevators in this 48-story, five-tower residential complex.
  • Great India Place, Noida: For this shopping complex and world-class amusement park across 173 acres, Otis will provide one Trav-O-Lator® moving walkway, 32 escalators, four Gen2 elevators and 22 Infinity elevators.
Apart from this, we will be providing DLF with over 250 units in various residential and commercial buildings. The recent one is the prestigious order for 22 units for their iconic structure Horizon Centre. It is for the first time DLF will have high speed elevators traveling at 3.5 meters per second.

Would you like to discuss any other technology apart from Gen2 and ReGen drives?
Yes, another exciting product that is part of our portfolio is the Compass™ destination management system. Using Otis’ patented advanced technology, the system constantly evaluates real-time passenger traffic to improve flow and travel time, in busy mid and high-rise buildings. Instead of using standard hall call buttons, passengers register their specific floor before they enter the elevator. The system assigns passengers traveling to nearby floors, to the same car. This minimizes the number of stops per trip and significantly reduces car crowding, as well as passenger wait and travel times. This technology has also been developed to respond to growing security concerns across markets. The optional Compass seamless entry is specifically designed to integrate building security and elevator-dispatching systems. This allows the building security to monitor and control movement of tenants and guests at all points in time.

Petronas OtisWhat is your view on the safety standards for lifts followed in India?
In India there is no national regulatory body that defines safety standards to be followed by elevator manufacturers. Instead only 12 states have their own standards which serve as purely as guidelines. These guidelines are not mandatory. Only the states of Haryana and Tamil Nadu have mandated those rules. There is a lack of an inspecting body or statutory authority. This makes states, especially those that do not have any sort of standards even more prone to accidents. The best possible way to try and check accidents and mishaps is by preventing them. This can be done by fortifying elevators with Automatic Rescue Devices. This is especially useful in places where power supply is irregular. A lot of people tend to panic and try to attempt means of rescuing themselves, or resort to unauthorized rescue which actually puts them in danger. In the event of a power failure, the ARD will bring the elevator car to the nearest floor and will stay on that floor with door open till the power supply is resumed. Awareness of the masses is also another crucial factor. Otis actively works with Elevator Escalator Safety Foundation (EESF) a not-for-profit organization, to conduct workshops on elevator safety in schools, housing societies and corporates. So far we have reached out to 12,000 students across India.

Otis has been a household name in India, as it has been to the world. How do you see the evolving role of India in the global pursuits of Otis?
Otis is a global leader in the manufacture, installation and service of elevators, escalators and moving walkways. Otis has remained the industry leader since its inception, not many companies or brands can boast of such continued success in their market leadership.

With over 55,000 units in the Otis India service portfolio and more than 2,600 employees in Otis India today, we are at the forefront of providing cutting edge new equipment technology coupled with revolutionary service programs to customers in India.

India as an emerging market has tremendous potential for elevator industry. The residential development is key driving sector for this growth followed by commercial space. With current urbanization trends that we see in India, there will be a lot infrastructure development coming up in terms of new metros and airports.

The recent government initiative on multi-brand retail will spur the movement of retail development even in Tier II/III cities. All this will lead to a tremendous growth potential for elevator service providers.
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