The Hindu Business Line : Fresh investments to boost ABB India

The ABB Group’s continued patronage to its unit in India reinforces the strong earnings prospects for ABB India. The Group Chairman has announced that India would be a ‘key focus’ area for the company and that an additional $100 million (about Rs 400 crore) would be invested in the next two-three years for capacity and range expansion.

The company had announced a similar amount in its earlier investment plan and has already completed the capital expenditure programme.

expansion plan

Interestingly this time around, the expansion plan appears to focus on the lower range of power equipment. The plan to set up a low voltage products and power electronics plant near Bangalore and a unit in Vadodara for small power transformers and distribution automation products is likely to provide competition to the smaller players in the power equipment industry. Given ABB’s superior technological skills and ample funding facilities, it may not be difficult for the company to penetrate this space.

While the lower voltage segments are known to offer less lucrative margins, ABB’s entrenched presence in the high voltage segment, as also its investments in this segment, suggest that it may not lose out on the margin front. The company has announced its plans to double production capacity in the high voltage range and also expand its range of large power transformers to 17,000 MVA.

It will also start manufacturing 765 kV range of power equipment in India. Demand for the same could be quite high given that the current reforms in the transmission and distribution space in India would require more transformers in the range of 400 kV and 765 kV.

ABB India’s exports may also see an increase as the group has stated that the low-cost manufacturing Indian unit will not only act as a resource base for the South Asia Pacific region but for global operations as well.

More Stories on : Electrical Goods | Stocks | ABB Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page