Mumbai: Germany’s Thyssenkrupp expects revenue from its elevator business in India to grow to 1,000 crore over the next three years from 700 crore in the fiscal year ended September 2017. With India being the second largest market for elevators after China, Thyssenkrupp expects this segment to grow at 14-15% over the period.

“Demand for elevators in India is at about 56,000-57,000 units a year; that’s about 9,000 crore a year, of which a tenth is revenue from elevator maintenance," Bharat Vishnani, managing director, Thyssenkrupp Elevator (India) Pvt. Ltd, told Mint in a recent interview. “Growth in the elevator business is directly linked to that of the real estate market, and both had tapered off in the last 2-3 years. Going forward, however, we expect demand to pick up, particularly in the residential sectors."

About 65% of the elevator demand in India is from residences and the fastest growing markets are in tier 2 and tier 3 towns. “Residences in smaller towns are only now starting to build 4-5 storeys and the demand for safe, affordable, no-frill elevators are coming from them." He said that Thyssenkrupp is developing products that would specifically target affordable housing projects in India.

The firm makes 80% of the elevators it sells in India at its plant at Chakan, near Pune. The unit, built with an investment of 330 crore, can produce 6,000 units a year. It now produces about 3,500 units.

The next phase of capacity expansion, which is planned for 3-5 years from now, will ramp up production to 10,000 units a year, said Vishnani. “The high-end elevators, which we deploy in high-rise buildings are imported from our factory in China."

Globally, Thyssenkrupp is pivoting its focus from its steel production legacy to capital goods, elevators and industrial solutions. The company recently finalised a deal to merge its European steelmaking capacities with Tata Steel’s operations in the continent.

In elevators, India is a very small portion of the pie, contributing to only 3-4% of global unit sales. “But it’s a growing market and the second largest after China," Vishnani said. “We expect to grow in high double-digits from here on."