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GE India to localise bulk of its domestic products

November 16, 2010 12:06 IST

GE India is embarking on a major localisation drive under which 60-70 per cent of the products that it sells will be manufactured in the country in the next five years. At present, the localisation is about 10 to 20 per cent.

Under the new scheme of things, GE India plans to build a shared manufacturing facility over 5,00,000 sq ft. The location is yet to be finalised. The facility will be used to produce multiple products for the US giant. GE, which has had flat growth in the last five years, is targeting 30 per cent growth per annum.

Plans are also afoot to enter more joint ventures with local manufacturers, which could include sourcing agreements to produce products catering to the country's specific needs.

To ensure that a large chunk of products are designed within the country, GE India has set a target under which 50 per cent work at the research and development centre in Bangalore will be for technology or products meant for India. At present, only 10 per cent is India-specific.

Elaborating on the India strategy, John L Flannery, president and CEO of GE India, said, "Localisation of the company has been our main focus area, starting from marketing and manufacturing to what the customer needs."

Flannery is looking to take the localisation levels from 10 to 20 per cent to 60 to 70 per cent in the next five years. "The company will set up a manufacturing site over 5,00,000 square feet with shared facilities, manufacturing multiple products," he said.

Flannery said the company had seen flat growth in the last five years. "In the last five years, we were flat, we were not growing and it was not a good performance. We did not execute as well as we could have."

He added, "But now we are looking at accelerating our business and our CEO, who was here last week, gave us a target of 30 per cent per annum before further orders."

Flannery also said the company had to ramp up its resources. "We have 13,000 employees and though we don't have a macro headcount target, we expect the headcount to grow double digits. Surely, the challenge is how to increase the number of the top 200 people to the top 400 people."

The GE India chief said the company had already developed low-cost products for the Indian market in the healthcare segment. These include an India-centric ECG machine, a baby warmer incubator and ultrasound machines.

In the energy space, it is developing smaller machines, which will run on different fuels like biogas and biomass and can be used in rural India to generate electricity.

 

Surajeet Das Gupta in New Delhi
Source: