In end-January, French mobility major Alstom completed the acquisition of German rival Bombardier Transportation. The new entity has combined revenues of around Euro 15.7 billion, order book of Euro 71.1 billion and employs 75,000 people in 70 countries. Ling Fang, President, Alstom Asia-Pacific, spoke to P.B. Jayakumar on Alstom becoming the largest overseas mobility player in India and why the country is going to be a crucial market for the company. Edited excerpts:
With the Bombardier acquisition, how has your footprint changed in India?
Alstom has made huge investments in India. We have set up several factories, recruited a lot of people and also invested significantly in technologies. This was primarily to meet the needs of the Indian railway sector. We decided years ago to put India at the heart of our strategy as the country is a global delivery centre for Alstom worldwide. This includes delivering projects for international markets. We do a lot of research & development and innovation activities out of India.
In India, we have 8,000 employees, six factories (two from Bombardier Transportation) and two large engineering centres (Bangalore and Hyderabad). This makes India the third-biggest country for us. On an average, we have been recruiting 1,000 people per year in India. India will become the number one country for Alstom in two-three years. As our CEO recently said, "If India succeeds, Alstom will succeed, and if India fails, Alstom will fail". India is important not only because of its market potential but also innovation, manufacturing and engineering capabilities.
The merger has made you the largest multinational mobility solutions provider in India. What are the synergies expected from this acquisition?
Combined, we now have a larger presence in metro rail projects in different Indian cities - Chennai, Lucknow, Kochi and Mumbai. We have won several big projects like Mumbai Metro III, rolling stock for Mumbai Metro IV, Agra-Kanpur metro, signalling for Bangalore metro. There is a little bit of Alstom now in nearly all metro rail projects in India. Bombardier was traditionally more present in the Delhi Metro.
Alstom had won a contract to supply 800 electric super powered double-section locomotives of 12,000 HP to Railways. We have already delivered 76 locomotives. These are the most powerful locomotives used in India.We are able to deliver 10 double locomotives per month. This performance is very good compared to other factories in the world. Recently, we completed part of the Dedicated Freight Corridor. From ex-Bombardier, there are several projects, particularly in component delivery. Now, we have a combined backlog of close to ?4 billion in India. We are hopeful about gaining new projects too. We will be delivering for the Mumbai Metro Line 3 project. We also have maintenance contracts such as the e-loco maintenance contract and the maintenance contract for Delhi. These are normally for 10-20 years.
We will be delivering the majority of backlog projects in a year. We have strong delivery capabilities. At Savli and SriCity facilities - for metro rail coaches - we can make 900 metro cars per year. Our Madhepura factory can deliver almost 120 locomotives per year. The Asia-Pacific region accounts for 10-15 per cent of worldwide revenue and India has a very important part in that. Among the 8,000 employees in India, 40 per cent are engineers, who deliver 30 per cent worldwide engineering hours for us. It is not just industrial but human capital investments too. While we are open to expanding our footprint in India, we believe we have enough facilities to deliver our backlog, as of today. In future, as we continue to win new orders, we will surely consider further investment in the country.
Of the 25-30 metro rail projects planned for the last 20 years, 10-12 have taken off. Based on your order book and projects being pushed, what kind of business do you foresee in coming years? How important will India be for your global business?
In metro rail, India presents very good growth prospects. The plan is for 1,000 kilometres network in 30 cities. Recently, the Indian government launched new ideas and strategies, such as Metro Lite and Metro Neo. These are for medium sized and smaller cities. We are closely following these opportunities.
These opportunities are not for rolling stock alone. We are the leaders in signalling too. Railways plan 100 per cent electrification of the broad-gauge network by 2023. With inauguration of the first dedicated freight corridor line, we have the experience to secure more orders. Indian Railways is happy with the performance of our locomotives and we are looking forward to securing new locomotive opportunities. Private train operations is another area. It is an excellent initiative that will not only create competition on the mainline but also optimise operational cost and improve efficiency. Alstom is working actively on this project and looking forward to providing competitive and efficient solutions and contributing to long-term reliability, efficiency and safety of the railway network in the country.
The Indian business delivered some very symbolic and iconic projects we did internationally. We delivered the Sydney metro project fully from manufacturing to engineering from India. It began commercial services in May 2019 and was the first driverless metro line in Sydney. The second example is Montreal metro, which is also being delivered from India. From ex-Bombardier, we delivered commuter trains to Queensland. We are also delivering some very strategic projects for Alstom worldwide from India, which shows how India is important for our global operations.
How does Alstom see the future of mobility? Will it be Hyperloop or autonomous driving?
Alstom announced its strategic plan - 'Alstom In Motion' - in 2019 to become the leading global innovative player for green and digital mobility or smart and sustainable mobility. One aspect we believe in is green mobility and the second is smart or digital mobility. Currently, the world is undergoing a very profound socio-environmental transition because there are some new challenges to be addressed. These include acceleration of urbanisation, climate change and providing equal economic development opportunities to all countries and regions. To address all these challenges, transportation, particularly green transportation, will be at the heart of the ecological transition. Thats why we believe that, as a major player, we have the duty and responsibility to bring innovative solutions to address these challenges. Green mobility is an important part of this strategy. Alstom's vision and plan of the government are perfectly in line. Alstom is one of the major players in green mobility and we believe we can bring solutions to improve the situation worldwide.
Today, everyone is talking about Hydrogen trains. Alstom was the pioneer. The first Hydrogen train was operational in 2018. We have Hydrogen trains in commercial service in Germany and secured several orders in Europe. We are working on many projects in the UK, France and the Netherlands. Hydrogen trains ensure zero emissions. They could positively impact the future of railways in the Asia-Pacific region. That's why we are exploring the opportunity of introducing Hydrogen trains in this region, including India.
Then there is smart or digital mobility. Our experience of implementing autonomous trains shows we can be more in time and allow more trains to run on the same lines, which means there is no need to invest in adding new trains. We can reduce the time between two trains and improve efficiency. This will lead to more flexibility for operators and save energy. Alstom is working actively on innovations for autonomous technology that can be deployed on the mainline network, not just in metros. We are positive we will soon have autonomous trains running on mainlines as well. We believe that the future of mobility will be green and digital.