ABB India to invest Rs 1,000 cr in 5 years; new plants in Karnataka

ABB India, a unit of Swiss engineering and technology company ABB Ltd, plans to invest around Rs 1,000 crore in the country over the next five years in setting up new manufacturing facilities and expanding the capacity of existing factories, senior company officials said.

A substantial portion of this proposed investment will be in Karnataka. ABB India plans to expand the manufacturing capacity of its unit located at Nelamangala, near Bengaluru in Karnataka. “We have a land bank at Nelamangala where we will build a new factory,” ABB India Chief Financial Officer T K Sridhar told DH.

Sridhar said the company has outlined investment plans to make its Nelamangala unit more efficient and add capacity. ABB India is headquartered in Bengaluru.

He said the company has also acquired land near its existing manufacturing units at Faridabad in Haryana and Vadodara in Gujarat. The company plans to use the land bank for setting up new manufacturing units.

“When it comes to investments we don’t look at year-on-year basis. We have planned to invest around Rs 800 to Rs 1000 crore in the five-year period,” Sridhar said.

Sanjeev Sharma, Country Head and Managing Director, ABB India, said the focus on capital expenditure (capex) by the government in the recent budgets offers big opportunities for ABB as well as other engineering and technology companies.

Prime Minister Narendra Modi’s government has earmarked capital investment outlay of Rs 10 lakh crore for the financial year 2023-24, which is 33% higher when compared with the current fiscal.  The proposed capital expenditure for the financial year 2023-24 will be almost three times the outlay in 2019-20. The capex outlay will be around 3.3% of the country’s GDP.

Sharma claimed that more than 90% of cement companies in India use an ABB system and around 65% of Made-in-India cars are painted by ABB robots. Around 60% of oil and gas produced in India is monitored by ABB systems while more than 80% of metros deploy ABB technology, he said. 

ABB India sees huge growth potential in the areas like data centre, renewables, railways, water and wastewater.

In 2022, ABB India order booking crossed Rs 10,000 crore for the first time. The company received orders worth Rs 10,028 crore during the calendar year 2022 while revenue jumped to Rs 8,568 crore.

ABB India CFO said the company has an order backlog of Rs 6,468 crore as of December 31, 2022. Given the huge order backlog and order trends the company expects a substantial jump in its revenue and orders in 2023. In line with its parent firm ABB Ltd, ABB India also follows the January to December calendar as its financial year.

Sridhar said ABB India has a robust cash balance of Rs 3,616 crore. The company plans to use nearly half of this money to fund “bolt-on acquisitions”.