U.S. multinational TE Connectivity (known previously as Tyco Electronics) has announced an investment of Rs.250 crore in a greenfield facility here.
The company provides “connectivity solutions” to a wide range of products used in industries ranging from automobiles to power utilities. It has eight plants in India — five in Bangalore, two in Pune and one in Kochi.
The company planned to “consolidate” the Bangalore facilities, President of its Indian subsidiary, TE Connectivity India, V. Raja, told this correspondent.
“Obviously, we would like to take advantage of the economies of scale that we can harness by bringing the other manufacturing plants in Bangalore,” said Joseph Donahue, Executive Vice-President and CEO of the parent company whose global revenues amounted to $14.3 billion in 2011.
The Indian subsidiary, which now employs about 4,500 employees, earned revenues of Rs.1,400 crore in 2011 (accounting year October-September).
Mr. Raja said the company had made a cumulative investment of about Rs.600 crore, including in the takeover of Pune-based XOL Technologies in 2011. A company source explained that the acquisition gave TE a ‘foothold’ in the domestic market because XOL had established itself as a “credible supplier of connectors for the two-wheeler industry in India.”
It also gave TE access to “local manufacturing competence,” the source added.
Worldwide TE’s source of revenues is distributed across four main verticals —automobiles, consumer devices, energy and industrial segment (which includes aerospace, marine and defence segments) and broadband connectivity. The Indian subsidiary, Mr. Raja said, was not aspiring to develop India as a supplier of component for the parent company’s global operations. “Instead, we aim to manufacture locally, which is the only way we can build products that are suited to India and are cost competitive,” he said.
Mr. Raja said the company was targeting annual revenues of $1billion in the next five years.
“We plan to drive localisation from the current level of 20 to 60 per cent in this period,” he said.
“We will consider acquisitions wherever we see synergies to achieve our objective,” he said. “After all, we are a cash-rich and zero-debt company,” he remarked.