In 3 years, we have invested $400 m in India

Emerson employs over 1,000 engineers with nearly 500 invention disclosures, and 270-plus patent filings at the Pune Innovation Centre

Ferguson, Missouri-based Emerson Electric Company is a $24.5-billion multinational electrical equipment major which  manufactures products and provides engineering services for industrial, commercial, and consumer markets. In an email interaction with Deccan Herald’s Umesh M Avvannavar, Emerson’s president (India, Middle East and Africa) Pradipta Sen talked about how the company is making the most of its presence in India.

What investments have you made in India till date? What are the challenges you are facing?

India is a significant region for Emerson. Over the past three years, we have invested over $400 million into our India operations. Emerson has operated in India since the 1980s and now employs over 10,000 people. We have more than 100 offices here, 16 manufacturing plants, and five global engineering centres. We take both a global and local view of India. Over the years, we have developed a large engineering talent base that now successfully serves our global operations.

For example, we have invested heavily in the Emerson Innovation Centre in Pune, which is engaged in product development and engineering solutions for various Emerson businesses worldwide. It employs over 1,000 engineers with nearly 500 invention disclosures. More than 270 patents have been filed by Pune engineers.

From a local perspective, we have invested significantly in manufacturing capacity and life-cycle service. Over 90 per cent of what we sell in India is domestically produced. Like all companies, we also face challenges. Finding the right talent is always a challenge. There are certain regulatory and policy hurdles that currently deter multinational companies from developing and investing in end-to-end product development value chains in India.

What are these regulatory hurdles?

India has well-developed engineering, research and development (ER&D) capabilities, but the investments in this area need to grow for supporting growth in domestic manufacturing.

At $44 billion, India invests less than one per cent of GDP in ER&D versus two per cent in China and nearly three per cent in the United States. Multinational companies operating in India currently see benefit in investing only in the engineering aspect of ER&D, given the current policy scenario in India.

Multinationals would feel encouraged to invest in developing complete ER&D ecosystem in India if every part of the product development process, leading to commercial-scale manufacturing, is treated at par and incentivised equally. Investments in developing the complete ER&D ecosystem would not only go a long way in boosting domestic manufacturing but would also position India as a global hub for manufacturing development, perhaps at par with software.

How many acquisitions have you made in India? How have they benefited the company?

During the 1980s, Emerson entered into joint-venture relationships with several Indian-owned companies. Over the last few years, Emerson has made six acquisitions or joint venture buyouts that positively affected the company’s business. One of our most recent acquisitions is of Virgo Valves in 2013.

Virgo has a very strong reputation in the marketplace, complemented by a very strong Indian manufacturing base. We are seeing benefits from this acquisition every day, in terms of our ability to offer solutions to diverse sectors from oil and gas, metals and pharmaceuticals, to food and beverages. We’ll continue to be on the lookout for acquisitions which make business sense. We believe in an ideal mix of organic growth and strategic acquisitions. The companies that we acquire bring in their own identities and track record of success. Emerson helps by adding its brand, its management expertise, technology, scale, and global reach.

What are the future investment and expansion plans of Emerson in India?

Many sectors including oil and gas, water and waste treatment, cold chain, manufacturing, construction, etc. are bound to grow significantly in India. We are prepared to manage this growth in terms of the solutions to be provided, and resources to manage it. Emerson will continue to be committed to invest and grow our businesses here. Our strategy is to focus on local manufacturing, product development, and business support facilities and provide innovative and mission-critical technologies to support fast-growing industries across verticals.

How do Emerson’s products and services benefit the industrial and commercial markets?
Emerson provides innovative solutions for customers in industrial, commercial, and consumer markets around the world. The company has five business segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial and Residential Solutions. Emerson Network Power protects and optimises critical infrastructure for data centres, communication networks, and information and data systems. At Emerson Industrial Automation, we provide products, solutions, and services that drive factory automation to greater heights.

Emerson Climate Technologies is the world’s leading provider of heating, air conditioning and refrigeration solutions for residential, industrial and commercial applications. Emerson Process Management helps process and power generating industries better manage their plants through intelligent control systems, measuring instruments, and regulation and control devices. Our solutions help reduce project risk, lower project costs, shorten overall project schedules, and allow plants to start up earlier to help maximise the return on investment.

What are the new product/service offerings by Emerson?

We are a leading provider of wireless technologies applied to industrial sector and these offerings have gained a lot of traction. A majority of Indian process industries, such as those operating in beverages/liquids, pharmaceuticals and offshore oil and & gas production, etc. are adopting wireless technologies in highly complex plant operations. They are applying Emerson Process Management’s Smart Wireless solutions for measurement, tracking, automation, and maintenance purposes.

Wireless technology basically enables industrial customers to monitor processes in places where wired connections are impractical. From monitoring oil pipelines in the desert where soaring temperatures and sandstorms can damage wired connections, wireless innovation has enabled industrial efficiency in the toughest of environments. With wireless, a plant’s power costs go down, while accurate measurement and tracking help in more efficient functioning. Emerson Climate Technologies reinforced its position as a leader in the HVACR (heating, ventilation, air conditioning and refrigeration) segment by being the first to indigenously develop a compressor which runs on the environmentally-friendly R290 refrigerant. The R290 is being used by some of the largest beverage manufacturers in India.

What, according to Emerson, is important while talking about smart cities?

When would a city be truly smart? A smart city is an efficient co-existence and convergence of institutional, social, physical and economic systems and infrastructure that ultimately enhance the quality of urban life. In a smart city, each of the systems (institutional, social, physical, economic) will be self-sufficient and sustainable and would be designed for efficient inter-system interaction. Timely access to basic resources like water and electricity, implementation of systematic processes like planned-garbage-disposal and real-time traffic diversion and reliable infrastructure like communication networks and mass-transits would form the backbone of such superior systems.

Unfortunately in an average Indian city today, most of the basic systems are present in a rudimentary manner. As an example, take the city water lifecycle. Potable water as a basic resource faces supply crunch in peak summer months, insufficient waste water recycling processes lead to unnecessary wastage, and absence of rain-water drainage and harvesting infrastructure wreaks havoc in the rainy season. A smart city would continuously evolve and respond positively to needs and changes of its citizens.

What is your market share globally? What are your plans to ramping it up?

Emerson recorded sales of $24.5 billion in 2014, maintaining a CAGR of 4 per cent for sales in the last five years. We do not disclose our market share.

How does Emerson see itself growing in thermal power sector?

In power generation, there is a substantial demand for the adoption of supercritical steam technology. This is driven largely by the need to minimise the environmental impact by achieving higher efficiencies of energy conversion. Power generation by coal as a fuel is around 55–65 per cent of the total power generation in India. Emerson’s offerings include state-of-the-art plant control systems, wireless measurement devices, and machinery health management systems for supercritical thermal power plants.

Please elaborate on investments made in R&D globally?

Behind Emerson’s progress in industrial technologies is an expansive network of R&D professionals that identify issues before they become problems. Emerson Advanced Design Center (ADC), based in Columbus, Ohio (USA) within the Battelle Memorial Institute campus (whose labs operate the largest R&D consultancy in the United States), focuses on developing and maintaining a ‘go-to’ network of external resources to assist in new product development for Emerson’s global businesses. The centre’s main objective is to gather a world-class group of experts who can analyse a project before it gets off the ground and assess technical risk.