Swedish auto part main SKF is scaling up investments throughout its features in India as a part of a technique to double global revenues, on improved margins, by the top of the last decade.
In an unique interview, SKF Group Global President & CEO Rickard Gustafson informed ET that India is a big market and an vital one for SKF. Given the group’s give attention to growing regionalization in Asia to greater than 85% from about 60% as per its not too long ago outlined strategic framework, there will probably be alternatives for investments in property, plant and tools in the nation, to assist development ambitions.
“I am optimistic about the Indian opportunities and the Indian economy. And in order to support those opportunities, we need to invest not just in our footprint but also in our supply chain,” Gustafson mentioned, with out sharing particulars of the investments earmarked for the native market mid-term.
He added the group has robust technical capabilities and there are a selection of various industries, comparable to excessive velocity equipment, agriculture, railways and electrical motors, that are of “high interest.”
The Rs 25,938-crore Production Linked Incentive (PLI) Scheme permitted by the federal government to encourage indigenous manufacturing of eco-friendly autos and parts with superior auto applied sciences particularly augurs nicely for the native trade.
He mentioned, “If the Indian government incentivizes the shift toward a greener future, I think that is good not just for India, it is good for the globe, because you’re a big part of the globe. Of course, it will also drive demand. And that’s good news for SKF.”
Gustafon mentioned the three global megatrends – electrification, automation, sustainability – will amplify development alternatives in India. “Electrification – that’s part of the sustainability agenda. Renewable energy is going to be key. Renewable energies will require rotation, we play there. I truly believe that we’re going to see more focus on hydrogen to drive more and solve the energy crisis. To compress hydrogen, you need high speed rotation. We play there. Carbon Capture will be another tool that we need to use in order to really reduce our CO2 footprint globally. And that will require compression and rotation. So these are some areas where I think there are business opportunities,” mentioned Gustafon.
Globally, SKF Group itself is concentrating on internet zero emission at its manufacturing amenities by 2030 and throughout its suppliers by 2050.
Overall, given the expansion prospects in the nation, Gustafon expects India’s function in global operations to increase over the subsequent few years. “We already have a very sizable operation here in India. which I hope will continue to evolve, grow and further excel. And over time, my ambition is to ensure that India becomes an even bigger and even more important part of our global portfolio,” he mentioned.
SKF Group reported a turnover of Rs 69,811 crore in 2021. India at present accounts for about 5% of global revenues.
Separately, Gustafon mentioned there can be challenges in the global provide chain on account of the battle between Russia and Ukraine. However, the diploma of affect will differ geographically.
“Inflation is on the rise, because of this (war). Energy prices are going up. Ukraine and Russia are big suppliers into the global food market, which of course will be impacted by this. It is not good news for the global economy. I think, though, that Europe will be probably more impacted by this than maybe Asia and other parts of the world,” he mentioned.
SKF Group will work at securing its provide chains, bettering price productiveness and growing product costs to handle inflationary pressures. “There are solely a few levers which you could pull and we’re going to pull all of them. First and foremost, we want to safe our provide chains, and have a number of sources. We want to drive our personal productiveness and effectiveness to compensate for this. And after all, we want to elevate our costs. We additionally want to use the worth mechanism in order to safeguard our enterprise and our margins,” he mentioned.
SKF is the world’s largest bearing producer, using 44,000 folks throughout 108 manufacturing items.