Q: Let me begin by asking you about the entire talk about the emerging markets being the next driver of growth. I was seeing your strategy paper that you put out and you said the next set of drivers would come in from countries in Asia, Middle East and Africa. Where is this optimism coming from? There have been a lot of issues in the emerging markets that we have seen in the last 3-4 years. However why do you say that they will be your next driver of growth?
A: ABB is the leader in power and automation. If you look at emerging markets already over the next year we are ideally positioned to serve the emerging markets in the next phase of growth. The demand in infrastructure is going up rapidly. The demands on automation and competitiveness in the emerging markets are going up. So, we are working very closely with local governments and with the relevant regions to have the right offering in place. It is a consumption story on one hand and there is a competitive story on the other hand because the emerging countries are more and more getting into competition with each other and automation and power efficiency will be a key differentiator for competitiveness.
Q: In that space how do you look at India? In the last couple of months especially with the new government coming in, every company CEO that we speak to says two words upbeat and bullish on India. How do you look at the growth chart in India especially now with the ne government in place?
A: The new government has given confidence back to the business. Since I arrived here in India early this week I met many of our customers. I can sense a certain improvement in sentiment, in optimism. So, I think the willingness is there, the openness is there, now we need to see the action.
Q: The sectors that you operate in power and automation, at least in the last four years or so we have seen those sectors really struggle in the Indian market as far as policies were concerned, as far as orders were concerned. Do you see things actually now improving on ground with the policy and the optimism that you are talking about from the new government?
A: I see dynamics on both sides of our business in the power side and the automations side. On the power side there is a big shift in the value chain in India. On the generation side there is a commitment to do more renewable power to become less dependant of all the imports become more clean in terms of power generation. So, that is one driver that we benefit from. That means this power needs to be transported over longer distances and we have just announced great new technology that is developed here in India like the 1200 KV breaker that we just installed here that allows us to uniquely play into long distance, high efficiency low loss power transmission business. If you looked it locally there are about 300 million people in this country that don't have access to electricity. If I look at the amount of investments, the 150 KV gigawatt of additional power generation that will come in the next couple of years. So, I am optimistic about that and I see good actions from the government coming.
On the automation side the strong focus on energy efficiency is one that we can really help in.
Q: We are talking about a lot of positives that could come in opportunities but for them to come on ground which are the certain policies which you think really need to change at this point in time?
A: Let me give you a couple of examples. The Make in India policy, it is really a strong requirement to set up industrial value chains, even stronger than the country has done so far will accelerate growth and create jobs and create prosperity, so that is a good one. The easing off of export policy and making it possible to export easier from India is another element. The changes that we see and the legislation that is being put in place on the renewable energy side is another piece.
So all together they are some really good pieces of the future jigsaw puzzle of the prospering India that will help to get this country to the next level of better quality growth.
Q: When you talk about the power sector with whatever optimism you have spoken about and the policy moves that you have spoken about have you seen on the ground movement in terms of order pick up. Have you seen that translate into order pickups. I understand ABB will see the late cycle recovery which is how you are placed in the entire value chain but at least in terms of a pick up which are the sectors where you are seeing a pick up and have you actually seen a pick up?
A: It is too early to celebrate a huge growth on orders but what we see is a significant increase in tender discussions where people really say we want to invest stronger on the power infrastructure side. If you look at 150 gigawatt that are planned in addition until 22 half of that is at the moment already being considered in concrete projects.
So in these concrete projects we have discussions with our customers to say not only how can we support the establishment of the power generation capacity but also how can we support the transport of the new capacity to the points of consumption.
The second half of this 150 gigawatt in addition that are coming is not yet planned. So, this is a long term game where we are working together with the key player in the industry to get going. So, tender activity coming up, long term project development needs coming and the orders building come also accordingly with it.
Q: So, what is the timeline that you are projecting for your company to actually see a pickup in these orders and them translating into formal orders for you?
A: Over the course of the next 24 to 36 months you will significant projects kicking in. We are optimistic that our orders grow in the field of infrastructure will go in line with that development.
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