For a company that has global revenues of $40 billion, recording $1 billion sales in India may look scant in absolute figure, but growing it at around 15 per cent per annum is definitely not a small feat, says Akshay Bellare, vice president and general manager, Honeywell Technology Solutions India. Speaking to Business Today, he also discussed key areas of focus for the company, the way it views the competitive landscape and how it is trying to differentiate itself from the competitors. Edited excerpts:
What is new at Honeywell that you plan to offer to your customers?
Over the last two-three years, we had a change in our strategy. We sell a lot of physical devices, but if we connect those devices with the digital world, then all of a sudden we shall have a lot more opportunity to improve our offerings for our customers, generate more value for them and for us. So, we are in the process of transforming ourselves into a software industrial company. This means adding a software layer to our products so that they can become connected products. For example, we sell a lot of sensors. Previously, those sensors were sold as just hardware. Now, we sell sensors and the software with which customers can gather environmental data on a real-time basis so that they can make decisions on the basis of the data they receive. We are also well-known in RFID and mobility solutions, but all of these, when connected, provide real-time information to our customers, so you can track and trace products in a warehouse. There are many such examples. Honeywell, for instance, is a leader in APUs (auxiliary power units) that are used in aircraft. By making those APUs connected, we can get some real-time information on how APUs operate so that an aircraft can do proactive maintenance. We call them smart products with everything connected to the cloud.
What is the share of connected products in your total product offering?
We have hundreds of thousands of products that we sell across all our businesses, but almost all the products that we are now bringing in the market will be connected. We sell our legacy products too, but all our new products will be connected. This is an area that has got a lot of focus at Honeywell over the last two years.
What about the Indian market and where does it fit into your overall scheme of things at Honeywell?
We have a terminology called, the high growth regions. Here, a president who reports to Honeywell CEO mostly has 10 to 12 countries under his portfolio. In this, India is emerging as a high growth region for Honeywell. Since India is seen as a high growth region, in the country, we should ideally be growing at two times its gross domestic product (GDP). So, if GDP in India is roughly between 7 and 8 per cent, our aim is to grow at two times that number between 14 and 16 per cent and our performance over the last few years is indicative of that. Over the last three to four years, India has become a very strategic region for Honeywell. India has always been important to us but over the last two to three years, under our new CEO, there has been intense focus on India plus, and there have been a lot of initiatives in India like Digital India, and increasing focus on smart cities, all of which are aligning well with Honeywell's growth strategy. We are designing products for India, and manufactured and made for India.
Financially, how critical is India for Honeywell today?
In the last three to four quarters , Honeywell has had a topline global growth of roughly 5 per cent, which is good, but in India we have been growing at two times its GDP at 15 per cent or thereabouts in the last two to three years. Our revenues (domestic sales and exports from India) here stand at about $1 billion, while Honeywell's total revenue is roughly around $40 billion. That said, $1 billion out of $40 billion is significant, especially when India is growing at 15 per cent.
What is the picture you can give us of Honeywell and what India would look like in it in a year from now?
There are a couple of focus areas for us in India like the smart cities initiative of the government. We are playing an important role in 65 cities already. Honeywell is a big player in oil and gas, both in process technology and refinery controls. That is again an area where India is growing. Digital India and e-commerce is also growing rapidly in India. In one of our businesses of safety and productivity solutions, we have a business that focuses on warehouse automation. We also look at mobility solutions that have a significant growth opportunity in India. In a year from now, these will be the areas we shall focus on. We also have workers safety equipment. This is another area of opportunity for us in India with more focus on worker safety. These are not connected products but are more from a hardware side, be it the hard hats, masks or shoes.
How is the manpower break-up in India today?
We have roughly 15,000 people in India, and of these, 7,000 are engineers. Globally, we have about 125,000 people.
How do you view the competitive landscape in India and how you are trying to position yourself differently?
We have four major businesses - aircraft, oil and gas, buildings and safety of workers and ecommerce-related areas where Honeywell is strong globally. To stay strong in India, we focus on building the same domain knowledge to make our products more useful for the Indian market. India has a very cost-competitive market and you have to find the right balance between cost and performance. Because we have a large presence of engineers here in India, utilising the same domain knowledge and seeing how we can make our products more cost-competitive for Indian market with the Honeywell knowhow.