Wipro Infrastructure Engineering (WIN), part of the soaps-to-software conglomerate Wipro, is likely to set up a manufacturing base in the US as it seeks a global footprint to tap into newer markets. The engineering group primarily manufactures hydraulic cylinders and the proposed move into the US is the division?s most aggressive international move to date.
The company is looking at all options in this regard. This could involve setting up an assembly plant, a full-fledged unit or even buying an existing facility. The whole exercise may be completed in the next 12-18 months.
?We would need a manufacturing presence in the US, as it is one of the world?s biggest markets. We are making an assessment on whether we should do it ourselves or find some likely target,? said WIN president Pratik Kumar.
The US market, which contributes around 5% of WIN?s revenue, is currently served through exports from India.
WIN reported revenues of $305 million for the 2011-12 fiscal recording a yearly growth of 31%, with India being its largest market contributing 53% of the total sales, followed by Europe at 41%. The company has manufacturing units across India, China, Europe and Brazil and has grown some of these facilities through acquisitions. It had acquired a majority stake in Brazil-based hydraulic cylinder manufacturer RKM Equipamentos Hidraulicos in May 2011. Similarly, it bought Nummi Tipping Hydraulics in Finland in 2006.
Besides these locations, the company is also looking at having a manufacturing presence in Eastern Europe that would be a cost-efficient unit addressing markets like Russia and the surrounding region. On the rationale for developing such a diverse presence, Kumar said that in a very global buying environment, the expectation from the marketplace is to have a manufacturing footprint in all the growth markets.
Wipro entered the hydraulic segment way back in 1976. In fact, it is older than its mainstay IT services business. Today, WIN caters to segments such as material & cargo handling, truck hydraulics, mining, construction & earthmoving, farm & agriculture and aerospace & defence.
Kumar said the company is also looking to increase the production capacity from around 1 million hydraulic cylinders a year to about 2.5 million the next three years.