FORTUNE 500 COMPANIES IN INDIA
SIEMENS LIMITED
Background
Siemens Limited is a 55 per cent subsidiary of Siemens AG. Siemens Limited has a wide presence across the country, and its operations include seven manufacturing plants and 19 sales offices. Siemens is also part of a vast global network of 4,30,000 people, operating in over 190 countries and that fact also serves to enhance its standing.
The operations contribute to around 2.5 per cent currently in terms of revenues, with Siemens Limited at 0.8 per cent. In India, Siemens Limited mirrors the portfolio of Siemens AG, except that Siemens VDO Automotive, and Siemens Public Communication Networks Ltd operate as separate companies. Siemens Information Systems (SISL), another group company, is now a 100 per cent subsidiary of Siemens Limited and Siemens Building Technologies (SBT) has already been merged into Siemens Limited. The Siemens Ltd. Board of Directors has recently approved the merger of Siemens VDO Automotive Ltd into Siemens Ltd with a 1:6 share swap ratio, subject to statutory approvals.
Siemens is a major company engaged in the business of manufacturing industrial electrical and electronic equipment, medical imaging equipment, railway signalling and traction equipment and a host of other electrical products. The company has an industrial projects division which undertakes supplies, installation and commissioning on a turnkey basis. In many of its product segments, Siemens is the leader and in the other product segments where it is not in a leadership position, it ranks among the top five major companies in the country.
Siemens Limited employed 4,094 people in India, as on September 30, 2004.
A major player in the Indian engineering sector
Significant market share
The domestic market size for enterprise networks is approximately US$ 105 million, of which 40 per cent is owned by large players. Siemens owns 23 per cent of the market share. The company has 18 per cent market share in the US$ 252 million domestic motor and drives segment. Siemens has 22 per cent market share in the US$ 250 million domestic automation market.
The domestic market for power transmission and distribution (T&D) excluding towers and conductors
was approximately US$ 178 million in FY 03, of which Siemens had 10 per cent share.
More than just an engineering equipment manufacturer
Siemens Limited derives 33 per cent of its revenues from the automation and drives division, followed by 24 per cent from the power division, 18 per cent each from SISL and Healthcare/other services divisions.
The fastest growing business both in terms of revenues and earnings is SISL. The net profits for SISL are also higher due to the effective low tax rate for a software company.
Sales turnover of Siemens Ltd. increased by 26 per cent and stood at US$ 381 million for the year
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SUCCESS STORIES ended September 30, 2004, compared to US$ 303 million in the preceding 12 months.
The profit after tax stood at US$ 32.2 million compared to US$ 29.7 million in the previous year, registering an increase of 9 per cent.
stadiums and also manufacture small light bulbs. In healthcare, they execute complete solutions for hospitals, and also provide “in-the-canal” hearing aids.
In the communication segment, they offer a complete spectrum of products from large public networks to mobile phones.
Exploring new business opportunities
Siemens Group is using its collective strength to address the key industry and infrastructure segments in India. It also intends to make aggressive inroads into the Indian market by exploring new business opportunities and avenues. The Indian operation of Siemens is playing an increasingly important role in the global network. Siemens is also enhancing local skills by increased investments in training programmes.
Leveraging the India Advantage
Leveraging the IT capabilities of Indian operations to support worldwide projects Siemens Information Systems Ltd. (SISL), the 100 per cent subsidiary of Siemens Ltd operates in its core traditional business segment, SAP implementation services etc. and the niche verticals of healthcare and telecom. Nearly 87 per cent of its business comes from Siemens Business Services (SBS), a division of Siemens AG and its subsidiaries like SBS-USA, SBS- Italy etc. SISL has established itself as a niche player in the software space.
Increasing hardware sourcing from India to enhance the value chain
Production cost arbitrage has prompted the company
Factors for success
Complete range of offerings
Siemens India is a strong player in the field of electrical and electronics engineering, and has the capability to integrate diverse products, systems and services into turnkey solutions across the life cycle of a project.
Siemens provides a complete range of offerings in all the areas of its operations. In the energy sector, the company’s expertise ranges from power plants to switches and in the industry sector they build airports, as well as take on contracts. In transportation, they deliver complete high-speed trains, right down to safety relays, whereas in lighting, they illuminate large
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In Power Transmission & Distribution segment, Siemens is a key player in the domestic as well as the overseas market. It provides a variety of systems, solutions and products
(excluding towers & conductors)
FORTUNE 500 COMPANIES IN INDIA to increase production and hence exports from the Goa factory. The Siemens Goa plant is being used as a manufacturing hub for catering to the international market. The Goa factory will become the hub for manufacturing X-ray tubes as it can save up to 30 per cent on cost.
Future plans
German engineering giant Siemens AG is exploring acquisition opportunities in India in order to expand its presence in the Asian region. Siemens top brass in India have started the process of identifying segments beyond its traditional businesses that would fuel growth in the coming months. According to Siemens AG Executive Vice President and CFO Heinz-Joachim Neuburger, Siemens will be taking a close look at acquisition possibilities to supplement their current product range and skill sets, so as to build upon the platform that they already have in India. Siemens Limited has ample financial resources, and with the backing of Siemens AG, the company should be able to make optimum use of those resources.
Siemens Information Systems (SISL), now wholly owned by Siemens, will be a major beneficiary of the group’s outsourcing plans. Around 80 per cent of SISL’s revenues come from the global market.
According to Siemens MD Jurgen Schubert, Siemens is scaling up the capabilities of SISL to cater to the organisational needs of the group and the IT services requirements of their customers. At the same time, Siemens will continue to focus on the domestic market.
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Siemens Building Technologies provides security, heating, ventilation, air-conditioning etc. solutions for all types of buildings.
Siemens technology in this area is particularly in demand for modern hotels.
Siemens registered office in Mumbai, India
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Siemens in India plays an important role in all the key industries.
The automotive industry is an upcoming sector and Siemens technology plays a key role in the manufacturing of modern cars.
Siemens Ltd., also plays an important role in the infrastructure segments in India, particularly for India’s massive Railway network.
