Diversified industrial manufacturer Eaton Corporation has announced a sales target of $500 million in India by the end of 2015, which would triple its current revenue in the country. The business drivers would be its aerospace, electrical and automotive component segments, all high growth in India.
Globally, Eaton Corporation registered a 14.6 per cent increase in operating margin for aerospace business in 2010 from 2009. And its revenues from emerging markets increased from $2.6 billion in 2009 to $3.4 billion in 2010 of the overall sales of $13.7 billion. International sales for Eaton had grown exponentially from 20 per cent in 2000 to over 55 per cent in 2010.
Considering the enormous business opportunities in the Asia-Pacific region, Eaton is increasing its presence in India. In an interview with SP's AirBuz team, Eaton Chairman and Chief Executive Officer, Alexander M.Cutler outlines the road-map in India.
SP's AirBuz (SP's): Could you tell us about your aerospace business in India and how it is growing?
Alexander Cutler (Cutler): Eaton began operations in India in 1999 through the global acquisition of Aeroquip Vickers. We are basically into four aerospace product solutions hydraulic, pneumatic, fuel and electrical systems. A substantial number of commercial and military aircraft in India are powered by Eaton solutions. With the aviation sector in India and also the region growing fast, we see enormous opportunities here. India will be an important part of our goal of generating 30 per cent of our sales from emerging markets. We are excited and bullish about participating in the development of India's infrastructure including airports. I landed at Terminal 3 of the Indira Gandhi International Airport and must say that they have done a good job not just because Eaton has provided electrical solutions here.
SP's: What is your strategy with regard to partnerships - do you partner with OEMs (Original Equipment Manufacturers) and also the end-users such as airlines?
Cutler: Eaton has partnerships with both. There are many airlines which opt for our product solutions knowing our strengths and the OEMs go along with them. Our solutions are on most airlines and as we are known to provide cost-effective solutions, Eaton has a long clientele list. Our systems are on most of the Airbus and Boeing commercial aircraft and also on several of the US and European fighter jets. Our fuel systems on the single-aisle commercial aircraft have brought about 30 per cent fuel efficiency which the airlines recognize.
SP's: Are Eaton solutions on the medium multi-role combat aircraft (MMRCA) deal that India is looking at?
Cutler: Yes, Eaton solutions are well represented on the fighter aircraft that are coming from the US and European contenders.
SP's: Where do you see the aerospace business coming from for you in India?
Cutler: If you look at the passenger growth in India and also in China, both countries will require more aircraft and also improved maintenance infrastructure. Presently, many airlines take their aircraft overseas for maintenance, but this is going to change in the next three-four years. Eaton has positioned itself to serve the opening up of the MRO business.
SP's: In India, the growth is coming from the low cost carriers (LCCs) who are cost-conscious, how do your solutions address their needs?
Cutler: Not just India, we see the LCC model growing in many regions including the US. Our product solutions focus on two important aspects reliability and cost-effectiveness. It perfectly makes sense for the LCCs to opt for solutions which give optimized performance at lower costs. Eaton does that.
SP's: Could you spell out your expansion plans in India, any mergers and acquisitions in the aerospace business?
Cutler: Eaton continues to grow both in an organic and inorganic way. We have always have some M&As in the pipleline. Importantly, we will expand our presence in India, both on the sales and the R&D fronts. The integrated R&D Centre in Kharadi, Pune, will add 200 employees to its engineering and other professional services work.
Earlier in the day (April 4), Cutler inaugurated the Technology Day at the Talkatora Stadium, showcasing leading solutions, technologies and capabilities that make electrical, hydraulic and mechanical power operate more efficiently, effectively, safely and sustainably.
A company executive said it was pitching for Indigo's mega order of 150 A320 neo for supply of components. "We as such have a good relationship with Indigo and hope that they will go along with Eaton as and when the orders come up for deliveries."