—Puneet Mehrotra, Country Manager – Industrial Solutions, TE Connectivity India
TE Connectivity, formerly Tyco Electronics, is amongst the world’s largest supplier of connectivity products. Over the years, the company has expanded its product portfolio much beyond connectors to include nearly half a million distinct products. We have Puneet Mehrotra talking about
TE Connectivity in India. While the power sector has been a traditional demand driver for TE, Mehrotra sees great potential in the emerging renewable energy sector, mainly wind and solar.
When it comes to “connecting and protecting power flow,” please tell us in brief what are the main products and solutions of TE Connectivity.
With a 50-plus year history of leadership, TE Connectivity is a $13.3-billion NYSE-listed company. TE Connectivity designs and manufactures more than half a million high-tech products that connect and protect the flow of data and power inside brands that consumers and industries use around the world every day. We have our presence in India for the past 20 years with a large manufacturing footprint with more than 4,000 people.
We provide connectivity solutions across business units—automotive, network solutions, consumer, aerospace defense and marine and industrial. The industrial business unit is further classified into four divisions: automation & control, intelligent buildings, rail and solar.
What is your business outlook for India, especially in view of the economic slowdown?
Business outlook continues to remain cautiously optimistic. India is not immune to the slowdown in the US and Europe economies. Auto industry in India has witnessed a historic slowdown this year. That said, we believe strongly in the India growth story. We have already invested close to Rs.600 crore in India and in October last year we announced investment of Rs.300 crore in our new integrated manufacturing facility which will be functional by 2014. We do see challenges in some segments for short term. However, we are excited about the new electronics manufacturing policy, which aims to make India the ESDM (Electronic System Design & Manufacturing) hub and promote local manufacturing thereby helping to reduce imports.
However, there are few industries like “solar” where the industry is rightfully demanding protection against dumping, but we have not seen much action from Government.
In the “power connectivity” field, what do you regard as key business drivers?
Investment attractiveness of generation and T&D segments: There has been a slowdown in the investment in power generation segments in last few years. The commercial viability of generation for developers (due to coal hike), incapability of distribution companies to pay and other scams have shaken the confidence of investors as well developers. Government needs to sort these much quicker to get this segment back on track.
Local Manufacturing: Equipment suppliers in India have faced strong competition from Chinese and Korean Imports. This is been more over-capacity as well as no local preference policy of government.
For a connectivity manufacturer, both the above factors are key business drivers. A strong market growth driven by support for local equipment manufacturing will help the market grow exponentially. As power T&D companies are moving more towards automation and Smart Grid, we have seen manufacturers invest in local manufacturing. This should translate into growth for connectivity markets. With the broadest portfolio and strong design and manufacturing capability, we are well poised to address this opportunity. We also see energy meters as substantial growth opportunity.
Tell us in brief about your several manufacturing plants in India and the product range that they manufacture.
In 1993, we expanded our operations in Bangalore with the opening of a plant to manufacture connectors, cable assembly, terminals, high voltage assembly for computer peripheral equipment, communication equipment, consumer electronics, rail & industrial business units. In 1998, we opened our second plant in Bangalore to design fiber optic cables and patch cords. We started our Pune operations in 1998 where we manufacture wiring harness for Tata Motors. In 2005, our Pune plant was recognized as one of the largest cable assembly manufacturing sites in TE. In 2009, TE set up its new world-class facility spreading over 22 acres in Pune to manufacture cable assembly for automotive, HVAC applications, connector cable assembly, squib cable assembly and other value-added products. Recently, we divested our Cochin plant to the NEST group. Today, TE has 7 manufacturing plants, 11 sales and marketing offices and employs more than 4,000 people in India.
We understand that TE was planning a new manufacturing in Bangalore. Tell us about the current status?
Yes, as part of our expansion plans, an integrated manufacturing plant will be constructed at the Aerospace Park, Yelahanka, Bangalore and the same is expected to be operational by 2014. At this new plant, TE will design and manufacture next-generation connectivity solutions for multiple industry verticals, including automotive, aerospace, defense, marine, enterprise networks, telecom, data communications, industrial, energy, consumer devices, appliances, circuit protection and relays. The new plant measuring 280,000 sqft will create new jobs in the areas of assembly, packaging, molding, stamping, tooling machine components, copper wire, optical fibre and cable processes.
Could you elaborate on TE’s plans to scale up the level of indigenization of its products in India?
Yes, we are looking at increasing our localization from 26 per cent to 60 per cent in the next five years. Increased localization is a key lever for growth. We are already designing and manufacturing products in India in network solution and the automotive industry. We are also constantly looking at inorganic growth opportunities which will increase our product or technology gap in addressing the local market.
What are your broad corporate plans for TE Connectivity in India, with respect to the “power connectivity” portfolio?TE Connectivity serves various industrial and energy segments with respect to its “Power Connectivity” portfolio. The conventional segments like thermal power generation and transmission have been our forte over the years. We work closely with global T&D players and supply connectivity products including relays. However, we see growth more in non-conventional (renewable) energy sources like solar and wind. We will continue to invest in local manufacturing, engineering and design capability to serve local customer needs.