Products and services vendor Areva Transmission & Distribution (T&D) India Ltd is hopeful of nearly doubling its turnover by 2010 from the current sales of Rs1,658 crore.
“India is a very challenging market. We plan to clock a turnover of Rs3,000 crore by 2010 by growing in all our business segments,” said Rathin Basu, country president and regional vice-president, India region, Areva. Areva T&D is the Indian subsidiary of Areva France SA.
In order to do so, the company plans to invest Rs400 crore for capacity expansion in existing plants and two new manufacturing facilities in the next two years. Of the proposed investment, around Rs200 crore has been earmarked for capacity expansion at the company’s eight manufacturing units by 30- 35%, which it plans to complete this fiscal year.
The new facilities include a high-voltage power transformer unit at Vadodara, Gujarat, and an instrument transformer factory at Hosur, Tamil Nadu.
The company’s manufacturing units in India have already become an attractive sourcing base for its global operations.
“Around 10% of our volumes are exported,” Basu added.
India has emerged as a very important market for Areva, due to the opportunities that its power sector offers. While India has a power generation capacity of 135,006MW, its total transmission capacity is only around 16,500MW, which is not sufficient to handle the 78,570MW of additional capacity that the government has targeted over the next five years. Areva competes with ABB, Siemens and General Electric in India.
“The product mix of Areva offers it a place in the complete value chain. Transformers will see a compound annual growth rate of 35% over the next five years. Both switchgears and control panel will also see the same growth trajectory,” said Hitul Gutka, an analyst at Mumbai-based India Infoline Ltd.
The other area for growth for the company is developing solutions that would help lower the aggregate technical and commercial losses, at present in the range of 40%. The power ministry has a target of bringing down such losses to 15% by the end of 2012.
“This offers Areva a fantastic area of opportunity and they are at the right place at the right time,” Gutka added.