India has strong technical engineering potential: ABB Group

In developed world, there is a lot of turmoil and uncertainty right now. The euro crisis or the debt crisis in Greek and Europe is causing tremendous uncertainty in the marketplace. The debt issue in the United States is also casting some uncertainty in the marketplace as well in the sense of how the US will get its debt under control.

So, it’s a very uncertain environment. I’m optimistic that the governments will find a politically right way to do things and many economies will move forward. I am very optimistic on India and China. They continue to grow anywhere between 7% and 10%. A lot of our growth will come from the emerging markets in the next three to four years.

We took about USD 3 billion of cost out of this business between 2008 and 2010. We increased our R&D spend by 10-15% year over those years. We also increased our sales spend.

So, it was a conscious decision taken by ABB's management to truly invest in the future. I don't know if all companies have done that way. For example, our R&D to sales ratio or revenue ratio in 2011 will be 4%, up from 3% in 2008. So, we have enjoyed good growth in that side of the marketplace and it has allowed us to invest more than some of our competitors that were more entrenched in the developed world.

There are two parts of it; one is infrastructure build out like the creating power here. We were appointed a job in North-East Agra that we will bring power from different parts of India, hydropower about 2000 kilometers down to the metropolitan areas where it’s needed.

These are huge projects transferring almost 8 Giga watts of energy that will be like 8 nuclear power plants. Those kinds of infrastructure projects are very big. We had a very strong automation business. So, whether it is novelty products or intelligent products like deriver and motors attached to those drives, productivity that really helps to drive industry overall ABB, has a good firm position here.

There is a regulatory concern when you do large infrastructure projects. It is about how long it takes for those approvals to go through because sometimes there are different dimensions of that particular decision done across states. Also the private and public pieces are other dimensions that are there, which are healthy. They help you to have the private investment side with the public investment side. So, you get a better optimisation of resources in a different look of how that’s done. So, it is positive.

If there are certain land restrictions, then we have to develop a technology to allow footprints to be smaller and more compact. So, if you look at air-insulated switchgears, they can take about 10 times the space of what gas insulator switchgear does. That technology development, which we are developing here in India, also helps to address those kinds of needs.

Secondly from a renewable power standpoint in India, it’s a very difficult situation that demands for power in India is incredible. When you look at this 12th Five Year Plan, there is almost 20 gigawatts of solar power alone that’s part of that plan. It’s a huge amount of solar power. So, a real challenge from an overall geographic and logistic standpoint will be to make that happen.

However, the Indian government seems to be dedicated to make that happen. The industry has to come together. Companies like ABB will help to offer technology. We talked about renewable energies, but if you look at Co2 reduction, it’s the ultimate alternative fuel. So, whether it’s our drive systems, transmission systems, a lot of these are dedicated to how you really save power. If you can save power and you don’t have to generate it again, then ultimately, that’s the best way to address Billy Noble’s question here.

From an ABB standpoint, almost everything that was sold in China was produced by us. In fact, we have been capacity-constrained in China since 2009. Since we look at China as an export hub, from a strategic standpoint, we have been focused on much more than ever in the last 18 months. So, when it comes to qualifications of our products from China into India or from China into United States or China into Europe, we really have a rapid program to make that happen. So, I am very confident that we can be competitive on a global scale.