Growth in India has probably been one of the fastest for Legrand – a leading brand in electrical installations and digital networks – as compared to that across other markets. Sameer Saxena, Vice-President – Marketing, Legrand India, tells The Dollar Business about his company’s organic and inorganic road to growth in the Indian subcontinent. 

Interview by Deepak Kumar | December 2015 Issue | The Dollar Business

 

TDB: Legrand has been in India for nearly 20 years and the growth in the country has probably been the fastest for the company in any region across the globe. What made this high growth rate possible?

Sameer Saxena (SS): Legrand has two approaches for growth – organic and inorganic. Under organic growth, we put in a lot of R&D. In fact, 5% of our global turnover goes into R&D. We introduce a lot of new products. We are not in the catching up game, we set standards as far as technology is concerned. This is possible only by good investments in R&D. Globally, we have a huge catalogue. We have about 40-60 thousand products in these catalogues and 50% of these catalogue numbers are less than 5 years old. This means we need to launch products every year. India, in the last three years, has seen quite an aggressive launching of products. And today, in 2015, approximately 40% of our sale is coming from these products. Clearly, this is one very strong pillar – product innovation and launching of new products. We spend time in the market to understand what customers need and use their feedback to create new products.

The second area (inorganic) is acquisition. In 1996, the first company we acquired was called MDS (Morarjee Dortmund Smith), and started our journey in India. Since then, we have acquired companies like IndoAsian, Numeric UPS, Adlec Systems. Today, in India, half of our growth has come from new product launches, creation of new market segments and, of course, acquisitions.

TDB: What is the growth projection for Legrand India for the next five years?

SS: The focus is India itself. We also firmly believe that we have shown potential within India; the pace may go up or down a little bit in a year. But globally, we feel that over a period of 5-10 years, our growth can be sustained from the macro-economic indicators, and we don’t want to slow down the momentum. In twenty years, we have grown 10 times; and for the next five years, we will keep the accelerator on. Legrand will be proactively working with Green City and Smart City projects.

TDB: Are there any new products in the pipeline?

SS: We have been continuously launching new products over many years. It’s a part of our DNA. Going forward, we will have new products in air circuit breakers, microprocessors, trip free switches, signaling and metering devices, protection, isolation, controlling, wiring and home automation devices, security devices, and lighting sensors, to name a few.

TDB: There has been news that Legrand may start exporting products from India. Is it true? If yes, when do you plan to start?

SS: Indian operations also include Nepal and Bangladesh. Legrand is already present in more than 70 countries across the globe through its subsidiaries that sell its products in those countries. However, having said that, we are keen on making India as one of our manufacturing hubs.

TDB: There has been a “healthy rise in sales” in India, according to the company’s 9-month figures for CY2015. To what extent have acquisitions of Valrack and other Indian companies, helped achieve this result?

SS: Quite a lot! Valrack has been adding to the overall growth as well as our organic growth. Although it’s difficult to quantify as both strategies have contributed to the growth in 2015. In 2015, we have outperformed the market; like I said, the company has grown in double digits. That’s how I can quantify as of now. But importantly, we have gained market share in most of the product segments we are present in and have outperformed the market in many. The performance, so far in 2015, has been really satisfying I would say.

TDB: What segments does Legrand India operate in? What are its market shares in these segments?

SS: Traditionally, we are a very strong player in residential and commercial segments. In residential, be it individual bungalows or builder-made, we cover both areas with most of our products. In commercial, we have sub-segments; we do hotels, hospitals, offices spaces and data centres. We work closely with the hospital segment, hotel segment, IT spaces and office spaces to give best solutions as per their needs. However, the focus on commercial segment is much more. With the acquisition of Adlec Power, we have strengthened our position in the industrial segment and we now see new opportunities in this sector.

TDB: Make in India, Digital India and a many such new initiatives are in focus these days. How does Legrand plan to benefit from them?

SS: Make in India, of course, is a buzz phrase at present. But for Legrand, it has always been the philosophy. We want to be close to our customers and as such, in most markets including India, manufacturing in the local country becomes most important. Today, we have 13 plants in India catering to our business. So, Make in India and local products adaptation has been our philosophy. Though our R&D is global, we understand the philosophy of what a good technology is and then try and adapt it in India to see how we can manufacture products using the technology in India. Initially, there may be a big import component but soon it becomes localised. Today, most products we sell in India are local products from our local plants. So clearly, before Make in India happened, Legrand was already making in India. But we appreciate this philosophy. It gives us more opportunities to work closely with structural policies of the government. But, like I said, irrespective of these policies, we have to be closer to customers and our manufacturing bases have to be closer to the customers. It becomes a win-win situation for both the customer and the company. Our 13 plants are a testimony to the fact that we manufacture quite a lot in India.

TDB: Like any other successful company, there are some challenges and hindrances; what do you feel as Legrand’s major ones?

SS: I would look at challenges as opportunities. If viewed from a macro level, half of India doesn’t have electricity today. And we being an electrical company, it becomes an opportunity. But somewhere it also becomes a moral obligation to work closely with all the stakeholders, whoever is involved in this area. In all dimensions, Legrand tries to put whatever it can.

Legrand, along with all the stakeholders, needs to work hard for the country. On the digital side, as much as electricity is important, we have seen we can’t live without data. That’s also an area where Legrand plays a very important role. We have a full business vertical for digital infrastructure. As India, be it private sector or a public sector, gets connected through data, Legrand will play a much important role in the days to come. We have a strong product portfolio to support this area. We take it as an opportunity, not as constraint.

50% of the world’s population too is not connected either by electricity or to the digital world. We can play a small part, along with the governments, stakeholders and our competitors. As a company, we will grow and contribute to the society and India as much as possible.