We Had Anticipated A Bigger Market

Updated: Oct 26 2002, 05:30am hrs
Krishna Mikkilineni, country head, Honeywell International India Pvt Ltd and managing director, Honeywell Software Solutions Lab is now working overtime to make India a a key global intellectual resource base for the $24 billion US-based Honeywell International. The transnational enterprise has businesses in a wide array of areas: from aerospace services and solutions, specialty material, transportation, power systems and automation and control. With a doctorate in electrical and computer engineering from the University of Florida Dr Mikkilineni has been with Honeywell for more than 17 years. He was a part of Honeywells research and technology organisation in the US, driving its software and systems related research. He has also worked with Honeywells Industrial Systems department managing improvements in their hardware and software development. In an exclusive interview with Sangeeta Singh of The Financial Express, Dr Mikkilineni talks about the businesses that hold potential in India and the companys India plans. Excerpts:

What was the basic idea about setting up operations in India Have the objectives been fulfilled
Honeywell International India has been in the country since 1999. The objective was to produce aerospace equipments, ACS (system Sensor) and specialty materials, our three main businesses worldwide. The 100 per cent subsidiary has a state of the art manufacturing system in Gurgaon. We have two manufacturing units here. While Metglas Solutions caters to the world market with a cost-effective and quality post-cast amorphous metal products, System Sensor India (SSI), a smoke and heat detector system takes care of the Indian market. I would say the objectives have been achieved to a large extent but we had anticipated a bigger market.

How much does the business contribute to the parent companys turnover How do you see it growing in the next five year
I must admit that the Indian business contributes a minuscule amount as of now, but we see a growth of 25 per cent on a year-on-year basis. While Honeywell International India contributes $55 million, Tata Honeywell Ltd $50 million and Software Solutions Lab $20 million last year. Compared to the global turnover of $24 billion, this amount ($125 million) is limited but we are sure it will grow.

Does that suggest that Honeywells India expectations have been belied And which are are the areas that you see the growth coming from, in the future
We had anticipated the market to be larger, as far as Honeywells manufacturing activities are concerned. However, the software division is supplying software solutions to our entire global operations. It is providing tremendous value to the organisation in the area of aerospace development for the last seven years. I would say that while our expectations were higher, in terms of the size as India is one of the biggest emerging markets in terms of its population size. But it has been sort of compensated for, as far as intellectual and research inputs are concerned. The software division is also responsible for designing and developing one of the best real time operating systems in the world.

Did Honeywell ever consider India as an export hub
We are still evaluating that as far as the manufacturing activity is concerned. But our information technology (IT) business has certainly shown that India can be an export hub as far as research and development and IT solutions are concerned. With a staff of 650, Software Solutions Lab headquartered in Bangalore caters to the entire global business.

What are the problems that Honeywell has typically faced in India Public sector units like Hindustan Aeronautics Ltd (HAL) and government departments like Defence Research and Development Organisation (DRDO) are governed by tender systems and take time in decision making Did you face problems there
Honeywell has no problems meeting the tender requirement. What concerns us are the size of the orders which are relatively smaller. For instance, India does not have too many aircrafts. There are only 200 of them.

So naturally our supply of aerospace equipment gets limited. More so, a large number of aircrafts are foreign-owned and leased which have their own equipment supply and replacement mechanism and Honeywell cannot find buyers in them. Besides, the countrys defence and armed forces do not require such sophisticated equipment in plenty. But of course it would be wrong to compare the Indian market with US where Honeywell has provided controls for all moon shots to date.

In automation and control solutions, Honeywell has a joint venture with the Tatas Why did you tie up with the Tatas
Tata Honeywell Automation and Control Solutions came to the Indian market before the 100 per cent subsidiary, Honeywell International, India was set up. Our knowledge about the Indian market was not good then and it required supplying automation and control solutions to the entire SAARC region in industries ranging from petroleum, petrochemicals, chemicals, metals and minerals and power generation. The equity with Honeywell Inc. USA is 40 per cent, Tata Industries another 40 per cent and 20 per cent is with the public.

The headquarters zeroed in on Tatas because, I guess, of the brand equity it enjoys in the Indian market and because of its strong marketing network.

What is the kind of technical staff Honeywell has in its manufacturing units and what are the product being made
We have a total employee strength of 300 in Honeywell International India Pvt Ltd. The company has a full-fledged technical and product specialists team at key customer locations to provide on-site support in operating Honeywell equipment installed on aircrafts. The equipments include aircraft auxiliary power unit, main engines, landing systems, environment control systems and avionics products. The avionics suite include communication and navigation systems and safety avionics.