—John Griffiths, CEO, Lucy Electric
In early October 2015, UK-based W. Lucy & Co Ltd announced it acquired all CG’s equity interests in their joint venture CG Lucy Switchgear Ltd. Electrical Monitor got in touch with John Griffiths to know about the rationale of this acquisition and to understand what this means for the UK-based group’s power distribution business in India. Though there will be no financial association with the Indian partner, CG will continue to be involved under a distribution agreement, says Griffiths. An interaction by Venugopal Pillai.
How much equity stake did CG own in the erstwhile joint venture CG Lucy Switchgear Ltd, and what was the rationale in acquiring the stake? What will the new company be known as?
The CG Lucy Switchgear Ltd joint venture was set up with a 50-50 ownership structure between Crompton Greaves and W Lucy & Co. Under the agreed deal, W Lucy & Co Ltd will acquire Crompton Greaves’ entire investment of 600,000 equity shares in CG Lucy Switchgear Ltd, for 5.5 million euros, which is equivalent to Rs.40 crore.
Once the deal is complete, the company will be wholly owned by W Lucy & Co Ltd and will form part of the group’s medium voltage, secondary power distribution business unit, Lucy Electric.
The deal supports Lucy Electric’s strategy to develop its business in growth markets. India is an important market for the company. It is a good fit for the company’s existing product range and the drive to develop India’s infrastructure, together with a clear commitment to network automation from the Indian Government has resulted in growing demand for electrical infrastructure equipment.
This deal will provide many opportunities for growth and place Lucy Electric in a strong position to meet growing demand in the market.
Though there are several multinationals operating with wholly-owned subsidiaries in India, it could still be useful to have a local partner. How do you see the way forward for the company’s solo existence, especially after two decades of partnership with CG?
We recognise the value of a local partner and this is a model that has worked well for Lucy Electric in other regions. As part of the overall deal we will continue to work together with Crompton Greaves under a distribution agreement to support a route to market for Lucy Electric products. However, there will be no on-going financial involvement between the two companies.
The erstwhile joint venture has established a firm presence in India’s ring main unit (RMU) market. Do you have plans of expanding capacity of the Nashik plant, or expanding the product range?
Now the transaction is complete, as part of our strategy to grow the business to meet increasing market demand, we will be looking at the company’s overall investment strategy. We will be looking at how and when we need to invest to develop the business for both ring main units and our automation product range, as well as other secondary, medium voltage distribution products and solutions within the Lucy Electric range.
Given India’s Smart Grid and Smart Cities endeavours, how do you see the way forward to Lucy Electric in India?
Automation of distribution network is a key area of expertise and business growth for Lucy Electric. The company has a broad product range to support this developing market from retrofit equipment to the latest SCADA systems, and our experienced engineers have an in-depth understanding of Smart Grid projects at secondary distribution level from concept to deployment.
We regularly operate at the cutting edge of the design and deployment of network automation projects, up to and including post-installation support services, and have played a key role in major developments such as the UK Power Networks scheme to automate the secondary distribution network for the whole of London.
As such the company is well-placed to provide the right products and professional, experienced and effective support for the latest network automation developments in India.