'Expedite critical reforms in India to accelerate investments'

Freudenberg India, a part of €7-billion German diversified industrial giant, is seeking to expedite critical reforms to further accelerate its investments in the Indian market.

In an interaction with Deccan Herald, Freudenberg Regional Representative in India Jorg Matthias Grossmann expressed the company’s long-term commitment to India and its belief in the potential of the Indian market.

“But to fulfil that promise and for the investments to grow beyond current levels, there is a need for significant improvement in fundamentals in the country,” said Grossmann.

The group reported revenue growth at Rs 1,553 crore for India in 2015, and expects it to grow anywhere between 7% and 10% in 2016. It made investments of more than Rs 290 crore in the country in 2015.

Expressing support for the Make in India initiative, Grossmann cautioned that while the thought behind the initiative is good, there is a need for substantive action and progress on the ground for it to make global majors like Freudenberg invest in India more.

“Freudenberg already makes in India extensively and investments will continue to happen in the Indian market, which is key to our Asia-focused global growth strategy,” he said.

Grossmann said that though the group grew in the last five years in India, the pace was not as expected, but he is confident that the next five years will be much better and its growth in India will soon touch or be in excess of double digit.

He said the importance of industrial production continuing to grow like it did in the recent quarter on top of the 7% plus GDP growth projected, will help the group’s increased investments in India.

The group is looking to further expand its shared services centre in Bengaluru which does technology support work for the group beyond India. He also said that further investments are likely in its Mysuru plant and elsewhere once the current capacity nears utilisation and was hopeful it will happen in the next 2-3 years.

The investment in R&D in India will continue to grow for the group which already has four centres in India — in Mohali, Pune and two in Mysuru. It is currently present in 50 locations in India and has 14 production sites.

The group reported total sales of €7,571.6 million in FY2015, compared with €7,039.1 million in FY 2014, registering a growth of 7.6%. The consolidated profit of the company reached €522 million in FY2015, compared with €478.3 million during the same period in the last fiscal, registering a growth of 8.8%.

Freudenberg India is heavily focused on the automotive space in India and the group is trying to extend the same to other segments like infrastructure (includes construction & transportation) and pharma and food, in the next few years.