Voith Turbo India managing director Volker Grosse Wilde is a happy man today as the demand for his products from the Indian power sector is surging ahead
Chennai: Forty-eight-year-old German Volker Grosse Wilde, managing director, Voith Turbo, didn't have any clue about the Andhra Pradesh summer when he landed in Hyderabad early this year.
Wilde came to India with his wife (their two children - son Pascal and daughter Jennifer - are studying in Germany) as the company's deputy managing director with a mandate to assume the mantle soon and chart the Indian subsidiary's future growth path.
"It was a terrible summer," he recalls. This year Andhra Pradesh experienced one of the worst summers with the temperature going over 45 degrees and the heat wave claiming over a thousand lives. "Nevertheless, my wife likes this place. And she is learning the Andhra cuisine."
For Wilde, a business economics graduate, the Indian assignment is the first one outside Germany, his home country. Prior to this assignment, Wilde was the commercial director, Voith Kuesel. As expected, April 2003 saw his elevation as managing director and Wilde is all set to heat up the market segments where Voith Turbo is currently present.
The Rs 30-crore turnover company manufactures power transmission equipment - constant and variable speed couplings - and aluminium castings. The company also imports and sells automatic transmissions for buses, hydrodynamic retarders, universal joint shafts, flexible couplings and other products.
Part of the euro 3.3-billion Voith group, Voith Turbo's Rs 7-crore equity is shared by German companies Voith Turbo GmbH and KG of Crailsheim. Voith Rail Transmissions, another group company headed by Wilde, targets the domestic rail projects for its power transmissions and other products. The Voith group had supplied helical gears and couplers for the Delhi metro rail project.
Wilde is one of those typical head honchos of a multinational company's Indian unlisted subsidiary, generally avoiding the media glare. But when he does meet, Wilde minces no words - perhaps a trait he picked up while in the German army before getting into the corporate world.
Wilde conservatively puts the topline growth estimates for this fiscal at 7 per cent. The company closed last year (accounting year October-September) registering a 15-per cent growth in turnover and the highest profit in its history. "The order book position is healthy enough to take care of 10-month production."
Part of the growth strategy is the expansion of the foundry. Declining to give the expansion outlay, Wilde says: "The capacity will go up to 12 tonnes per month from the present 7 tonnes per month."
The expansion is necessitated to manufacture bigger and high-end castings to meet the external and the group's own demand. Nearly 15 per cent of the company's turnover is contributed by exports. "Ours is the only aluminium foundry in the whole Voith group," says S Cyril, general manager (operations).
Supply to power sector up
Wilde is a happy man today as the demand for his products from the power sector is surging ahead. In the recent times Bharat Heavy Electricals (BHEL) is bagging good orders and this augurs well for Voith Turbo supplying fluid couplings.
Broadly, fluid couplings are of two types - constant and variable speed. The later could be further divided into geared and scoop types. Says A K Basu, senior manager (sales and marketing): "Voith Turbo is the only Indian manufacturer to make geared variable speed fluid coupling in India."
"In the high capacity power generation machinery Voith Turbo's fluid couplings really command the market. It is difficult for any other player to break that hold," says S Gopalakrishnan, managing director, Hydrodrive Systems and Controls, a Chennai-based fluid coupling manufacturer.
Nevertheless, competition rages in the constant speed fluid couplings and smaller power rating scoop coupling (used by power, cement and mining industries) market where Voith Turbo is slightly disadvantaged due to its premium pricing. With quality taken for granted these days and price being the deciding factor, is not Voith Turbo on a sticky wicket here?
Says Basu: "Agreed. But the lifetime cost of our product is lower. And user industries understand that quality means efficiency, which costs slightly more. As a matter of fact our market share in this segment is around 25 per cent."
Aggravating the cost problem is the increase in the input (iron and aluminium) prices. "We are able to minimise the adverse impact through long-term contracts with the suppliers and productivity improvements," says Wilde. Apart from the products from the company's plant, he sees good potential for the company's engineering design and trading divisions.
"The CAD/CAM engineering design division has 11 engineers who cater not only to our own design needs but also for external customers, Wilde adds. The Voith group is looking at increasing the design sourcing from India. "But this activity will grow in an organised way."
Similarly trading income is also set to rise with Volvo India deciding to import hydrodynamic retarders from next year onwards. "The road network is also seeing good improvement and this should result in increased demand for automatic transmissions for buses," hopes Wilde.
In the same vein Wilde projects bright days for Voith Rail Transmissions as more and more Indian cities opt for metro rail projects. The Voith group has identified India and China as the growth markets for the rail industry in Asia and other East European countries.
Currently selling the imported products, the company may in the future undertake manufacture of hydraulic transmissions, axle drivers, carden shafts and coding systems as per the Foreign Investment Promotion Board sanction. Till date the German group has supplied 793 transmissions for locomotives and railcars in India.
Surely, India is going to be a hot market for Wilde.