February 15, 2018
Since undertaking a signaling project for Kolkata Metro back in 1990, Alstom - a major player in the global rail transport sector - has grown considerably in India, even exporting their rolling stock from India to cities in Australia
The company’s production capacities have multiplied, and employee base expanded from 300 to 3,600 in three years; Alstom’s Bengaluru operations have become the company’s second innovation hub for the world after France
Alstom’s manufacturing in India includes its metro rolling stock plant near Chennai, a component manufacturing unit at Coimbatore, and an e-loco factory set up in partnership with the Indian Railways at Madhepura in Bihar
Simplification of the taxation regime, rationalization of regulations, improved transparency, and policy-level changes in the Insolvency and Bankruptcy Code have worked in tandem to create a thriving investment milieu in India
Leading its India operations out of Bengaluru, French multinational Alstom is a prominent supplier of railway infrastructure. The company’s current manufacturing footprint in India includes its metro rolling stock manufacturing facility at Sricity near Chennai, a component manufacturing unit at Coimbatore, and a recent e-loco manufacturing factory set up in partnership with the Indian Railways at Madhepura in Bihar. Since they first undertook a signaling project for Kolkata Metro back in 1990, Alstom – a major player in the global rail transport sector – has grown exponentially in India, even exporting their rolling stock from India to cities in Australia. Alain Spohr, MD, Alstom India and South Asia, explains what makes India an attractive destination to foreign investors:
What do you attribute Alstom’s rapid growth in India to? Is it linked to the rapid growth in metro rails in India?
Alstom’s growth in India has been exponential, particularly over the last four years. Our production capacities have multiplied, and the employee base has expanded from 300 to 3,600 in three years. Our Bengaluru operations have become our second innovation hub for the world after France. We are involved in electrification, signaling and telecommunication for a section of the Eastern Dedicated Freight Corridor, and we have established an electric locomotives manufacturing facility at Madhepura, as a joint venture between Alstom (74 per cent) and the Indian Railways (26 per cent).
Clearly, we have taken advantage of the metro rail boom in India. We delivered the first ‘Make in India’ metro coaches built at our Sricity plant for Kochi and Lucknow metro projects, respectively. The installed production capacity at Sricity facility is 225 cars per annum. We are keen to participate in new contracts for Mumbai, Pune and Bangalore metro projects and those in other tier 2 cities. Rapid urbanization and the smart cities initiative have opened up great opportunities for integrated urban mobility in India.
Your opinion on the ease of doing business in India?
Simplification of the taxation regime, rationalization of rules and procedures, improved transparency, and policy-level changes in the Insolvency and Bankruptcy Code have all worked in tandem to create a thriving investment milieu in India.
India’s major advantage is its highly skilled and motivated human resources. However, it is difficult to source local hi-quality, hi-tech components. I guess, subcontractors and vendors have not realized the huge potential in the metro sector. We want intermediate components manufacturing to be amplified so that we can easily source indigenous products.
Can you elaborate on your export activities and the Make in India push?
‘Make in India’ exists in two kinds of work we do in India. One involves our 600 engineers in Bengaluru working on design jobs for markets in France and elsewhere. Secondly, we export components from our Coimbatore factory and finished goods like trains from Sricity, catering to not just domestic but global markets. In the process, we are training talent, imparting knowledge and building industrial capability that will remain in the country.
Exports diversify our business activity, reducing our dependence on the domestic market. We are bidding for tenders in Europe, Russia and America very heavily today. Sydney is our first project here from India, and it was not easy in the beginning. They wanted to come to India and check our factory here before signing the deal. We had to break that psychological barrier. Today, our factory is an international facility and Sydney is our happiest customer. We Make in India for the world.
We had supplied rolling stock for Chennai metro but it was not entirely designed in India. However, Kochi and Lucknow are completely designed and built in India. Madhepura also comes under the aegis of Make in India, given the high percentage of localisation of the project.
Alstom’s expansion plans in India?
Although our priority is the domestic market, we want to accelerate our export business from India. It should be a 50:50 balance between the two. We have just launched a hydrogen cell based train and sold 14 units in Europe, and plans are afoot to make an electric bus. Asia is definitely a market for us. The Indian Railways is at the cusp of several major technological upgradations. For example, it has cleared a US$1.9 billion proposal to equip electric locomotives with the latest European train protection system. Alstom, positioned to deliver a total of 12 km of electrification per day on brown field territory, view this as a growth area. We are committed to India as a market and hope to keep investing in the country.