SKF to scale up investments in India to double global revenues

Swedish auto component major SKF is looking at scaling up investments across its functions in India as part of a strategy to double global revenues, on improved margins, by the end of the decade.

In an exclusive interview, SKF Group Global President & CEO Rickard Gustafson told ET that India is a large market and an important one for SKF. Given the group’s focus on increasing regionalization in Asia to more than 85% from about 60% as per its recently outlined strategic framework, there will be opportunities for investments in property, plant and equipment in the country, to support growth ambitions.

“I am optimistic about the Indian opportunities and the Indian economy. And in order to support those opportunities, we need to invest not just in our footprint but also in our supply chain,” Gustafson said, without sharing details of the investments earmarked for the local market mid-term.

He added the group has strong technical capabilities and there are a number of different industries, such as high speed machinery, agriculture, railways and electrical motors, which are of “high interest.”

The Rs 25,938-crore Production Linked Incentive (PLI) Scheme approved by the government to encourage indigenous manufacturing of eco-friendly vehicles and components with advanced auto technologies especially augurs well for the local industry.

He said, “If the Indian government incentivizes the shift toward a greener future, I think that is good not just for India, it is good for the globe, because you’re a big part of the globe. Of course, it will also drive demand. And that’s good news for SKF.”

Gustafson said the three global megatrends – electrification, automation, sustainability – will amplify growth opportunities in India. “Electrification – that’s part of the sustainability agenda. Renewable energy is going to be key. Renewable energies will require rotation, we play there. I truly believe that we’re going to see more focus on hydrogen to drive more and solve the energy crisis. To compress hydrogen, you need high speed rotation. We play there. Carbon Capture will be another tool that we need to use in order to really reduce our CO2 footprint globally. And that will require compression and rotation. So these are some areas where I think there are business opportunities,” said Gustafson.

Globally, SKF Group itself is targeting net zero emission at its manufacturing facilities by 2030 and across its suppliers by 2050.

Overall, given the growth prospects in the country, Gustafson expects India’s role in global operations to expand over the next few years. “We already have a very sizable operation here in India. which I hope will continue to evolve, grow and further excel. And over time, my ambition is to ensure that India becomes an even bigger and even more important part of our global portfolio,” he said.

SKF Group reported a turnover of Rs 69,811 crore in 2021. India currently accounts for about 5% of global revenues.