Eaton Corporation, a New York Stock Exchange-listed power management company with $16 billion sales in 2011, is looking at emerging markets to grow faster. It expects 30% of future revenues to come from developing nations. Curt Hutchins, president (Asia Pacific), Eaton Corporation, speaks to FE’s Shubhra Tandon on the company?s strategy for India.
How has your business been in India so far?
We are in the automotive and commercial vehicle space. We sell transmissions, clutches, valves locking differentials as part of our portfolio. Our hydraulics business sells pumps, hoses, valves, actuators, we sell into construction equipment and stationary infrastructure too.
Our electrical business have two parts ? products which saves power cost to companies and other products which we sell to power distribution companies. Through the power quality business, we are supporting any application where they need critical guaranteed source of supply. The first range of products are used in hospitals, hotels and data centres.
We are helping customers with technical solutions that they need for the most critical power applications. We also have a good portfolio of power distribution products and we are optimising those products to meet the specific needs into the Indian market. We have started to launch those products and increase our share there. We are not in high voltage transmission, but a step down where you have all of the back end breakers and control panels that serve any large manufacturing side, hospitals and stadiums.
Anything missing in your global portfolio in India?
All five of our business segments are present in India. We can start with our aerospace business and in that we have significant content whether it be Boeing or Airbus or C17, 864 helicopter. We have a very significant global footprint in aerospace. We are serving the market here today and think that the market will expand significantly over the next decade. So that?s a priority in China or India.
Our hydraulics business has significant growth opportunities when you think about the infrastructure in India. When you think about the growing agricultural business, the growing construction equipment markets will look to serve those that continue to localise more products from manufacturing perspective. We intend to continue to launch more products in automotive and commercial vehicle space. In our electrical space, we have good footprint and our UPS is helping our customers generate next generation data centres.
How have you won Indian customers?
In our vehicle space, we have integrated hybrid platform with CNG engine and that was with Tata. And that vehicle is delivering 25-30% in fuel efficiency which was launched during the Commonwealth Games. Two of those buses are also plying in Mumbai as part of a pilot project.
The payback for the incremental cost could be anywhere between four years and 10 years depending on the ultimate application. We have a very strong presence in the hydraulic steering space, which is localised here and we are helping our customers make that transition.
You seem to have a large R&D lab in India. Your goal ahead?
It is a very large operation. We have over 2,300 employees in India. Between 2006 and 2011 our compounded annual growth has been 29% of our business here in India. This fits into Eaton?s global goals of having 30% of all our revenues coming from emerging markets and Asia Pacific is a big piece of that strategic objective. And Eaton?s overall growth objective is 12% to 14% per year through 2015.
Would all this be coming in through steps taken through organic activity or are there some acquisitions on the cards?
Of 12-14%, we expect 2 to 4 percentage points of that growth to be from inorganic activity.
Where do you feel an Indian company would make a strategic fit?
We see in all of our businesses as we think of our growth objectives opportunities to enhance solutions that we provide to our customers. I will not comment on one business versus another where we see priority. We are focussed on product segments, markets, businesses that we can really outgrow the end markets.
What would be Eaton?s plans for India in the next two to three years?
We hope to get $500 million of revenues by 2015 by continuing our sales growth, localising products and launch new products optimised for local markets.
