MUMBAI: ThyssenKrupp plans to develop an Indian procurement centre as a supply hub for its engineering business in its push to turn around the loss-making division.
The engineering business, which makes turnkey plants for the chemical, fertilizer, cement and mining industries, contributes up to 9% of the elevators-to-submarine group’s net sales, but has been mired in losses due to a weak global environment.
“Our target is to achieve the needed turnaround next year,” Marcel Fasswald, chief executive of ThyssenKrupp Industrial Solutions, told Reuters in an interview in Mumbai.
“India is already a global hub for some products and we are building up a global procurement centre here in India.”
He said mining and cement were going to be the major drivers of the business’s growth in India and, aided by the country’s cost benefits, it could become a hub for many more products.
Prime Minister Narendra Modi’s latest budget includes a major investment plan to boost infrastructure, rural consumption and foreign investment.
Fasswald said the continued emphasis on infrastructure such as roads, bridges and power would generate a bigger share of orders for the engineering business.
India currently contributes one-fifth of ThyssenKrupp’s industrial solutions business and one-fourth of its workforce.
Unlike Germany, where Thyssenkrupp is cutting jobs and costs, Fasswald said in India the group would be increasing its workforce.
He said India had substantial cost benefits that made the country a preferred location as a hub to supply to other south Asian countries.
The German industrial group embarked on a major restructuring programme after a failed merger of its steel unit in May with India’s Tata Steel’s European business.