Can you give us a brief overview with regards to the operations of Wabtec Corporation in India & Faiveley Transport Rail Technologies India Limited?
Wabtec Corporation has been in operation in India for over two decades. We have fuelled strong growth over the last three years through expansion of our footprint, strategic partnerships and global acquisitions. Two major acquisitions have catapulted Wabtec into one of the largest rolling stock and rail equipment manufacturers globally and in India - Faiveley Transport in November 2016 and GE Transportation in February 2019.
The organization is now coming together as ‘One Wabtec' by driving integration of the merged companies, businesses and functions, and leveraging operational synergies. The industry will see this in our unified presence at the 2019 International Rail Exhibition and Exposition (IREE) from October 21 - 24 and we invite your readers to visit our booth and learn more about our company, our products and our people.
There are two parts to the business primarily - Transit and Freight. Transit or passenger movement is under the legacy Faiveley umbrella and sells Brake Systems, Pantographs, Third Rail, HVAC systems, Couplers, Doors and Power relays for Electric Locomotives, Railway Coaches and Metros. Under Freight or goods movement, there are three sub-segments: (1) Freight Components, primarily making Draft Gears, Friction Wedges, Relays, Bogie Mounted Brake systems and Brake Blocks for freight cars or wagons and MTC which makes Metal Bonded Rubber products for Primary and Secondary suspension for Bogies (2) Freight Equipment - part of this business is legacy GE Transportation that manufactures Diesel locomotives (3) Electronics & Digital Solutions for Railway Infrastructure. We also have a robust Services business with integrated offerings tailored to our installed base of 23,000 locomotives in operation around the world.
Today in India, we have our operations driven out of five factory locations across the country from Hosur in Tamilnadu just across the border from Karnataka to Baddi in Himachal Pradesh near Chandigarh, to Kolkata and Marhowrah in Bihar where we are building the Diesel Locomotives for Indian Railways. Over the years, we have invested in 360000 Sq-m of manufacturing operations footprint. In addition, we also have over 2000 hardware and software engineers seated in Engineering Centers of Excellence in Bangalore designing locomotives, signaling infrastructure, and various electronics and digital solutions serving both India as well as all our global geographies.
Within the Transit business, we design and assemble Brakes system for Electric Locomotives, LHB Coaches, EMU/MEMU's, Semi High-Speed Train sets and Metro trains. We also have a very diverse product portfolio comprising of Couplers, Pantographs, Heating Ventilation and Air Conditioning systems and Automatic Doors for Indian Railways mainline and the Metro rolling stock. We proudly say that every Indian Metro has something of Wabtec in it!
What are the things that you see working in the favour of Wabtec in India and what are the things that you would like to improve upon?
Indian Railways is going through a rapid modernization phase. In the Union Budget 2019-2020, railways received the highest ever capital expenditure outlay. Key announcements also included formulation of a new PPP model to encourage public - private participation, greater investments in building suburban rail infrastructure and significantly higher allocation to Metro projects. Passenger safety, comfort and speed are a high focus area for railways today. On the urban transportation side, several cities in India have seen metro rail connectivity over the last three years and the future is even bigger going by the fine print from Ministry of Urban Development and Ministry of Housing & Urban Affairs. Our cities are expanding very quickly, and urban mass rapid transport systems are clearly a sustainable solution going forward.
Both the Indian Railways Mainline and Urban Metro Rolling Stock segments provide an enormous opportunity for the company to grow. Wabtec has a very diverse range of products that go into Electric and Diesel Locomotives, LHB coaches, Semi High-Speed Train sets, EMU's and MEMU's and Metro rolling stock. The company has a very large local manufacturing footprint and has been investing continuously in enhancing capacity. Wabtec strongly supports the ‘Make in India' initiative of the Central Government and has established a strong local supplier base to cater to the needs of railways and metros. We would further look to improve upon our local content in the different products, build on our engineering and R&D strengths and introduce the latest global technologies in India. We are also actively working with our group companies and engaging with our customers to introduce a plethora of new products for the India rolling stock market.
What are the key challenges faced by the Company and how are you addressing them?
Wabtec is today one of the largest global players in the Rolling Stock and Rail Equipment industry after the mergers with Faiveley Transport and GE Transportation. It is also amongst the largest players in the rail transportation market in India. Our challenges are both within as well as from the market.
The rapid integration of the different organizations under one Wabtec umbrella to leverage our scale and portfolio is a key challenge and is essential to drive synergies and operational efficiencies. We are bringing together employees from very different companies and different levels of the product chain and uniting them with a common vision - this is the key imperative for us for the near future.
Externally, as the Indian rail transportation market is growing, it becomes attractive to supplier companies all over the world. With this, our key challenge is to help prevent the market from slipping into a commodity focus with low price and low quality. We must partner with the market and our customers to understand the value of engineering, quality, project management, field service and all support that goes into delivering and maintaining a reliable product. We are cognizant of the fact that we must continuously challenge ourselves to take actions that will allow us to remain relevant and maintain a leadership position and we also believe we must support the Rail transportation market in India with expert counsel to maximize performance, reliability as well as cost competitiveness.
We have identified introduction of new products for Indian Railways as a key strategy for the future. Here, the biggest challenge we face is that a new product or innovation is treated the same as an existing product in terms of the tendering process. We believe this can be limited to finding high performance solutions that are needed to modernize and solve critical problems in the network. We would like to work with IR to create a separate innovation/new product introduction process; one that gives innovative companies that are willing to invest an impetus to develop products that are uniquely suitable for the Indian market - with attention to engineering that delivers the performance and reliability required for this market at the best possible cost.
We always face the challenge of strategic realignment within the railways market in India and the volume demand for products going up and down with limited lead time. The onus for us is to build smart factories that can accommodate these surges in demand without being impacted financially.
How do you view Indian government's ambition to create high-speed network? What role do you see Wabtec playing there?
Well, it is a realistic ambition to take for our country, but infrastructure has to be put in place to make a high-speed rail network operational. The success of Train Set 18 or Vande Bharat Express has improved speeds to 160 km/hour from about 110 - 130 km/hour. Train Set 18 will run on the busiest routes and replace the Shatabdi and Rajdhani coaches. IR is committed to have 40 such semi high-speed train sets manufactured by CY 2022. This will not only reduce journey time across cities but also significantly enhance passenger comfort. Having said this, overall modernization has to progress rapidly. The idea is to move towards higher speeds and separate out the passenger and freight corridors to maximize revenues for IR. The dedicated freight corridors will also be commissioned. This should help IR to grow both passenger and freight revenues that augurs well for diverse product manufacturers and integrators like Wabtec.
Our role as an organization is to support the expansion with the right product and solutions that in turn will fuel our business growth. Our locomotives for example are in operations in the northern, western and eastern corridors. They are not just efficient in heavy haul but are also extremely user friendly as per the feedback we have got from the loco pilots. On a similar note, a lot of our products from pantographs to brake systems are in commercial service across the country.
Wabtec also offers a wide range of signal and track products including switch machine layouts, rail gear, Positive Train Control, Design Engineering and System integration to the freight and commuter rail industry. The digital product and solutions portfolio may enable Indian Railways benefit from the Internet of Things (IOT) faster. Wabtec also has Condition-Based Monitoring systems that would enable IR to perform predictive maintenance by monitoring the health of bearings and wheels.
Tell us about Wabtec India's overall manufacturing capabilities and capacities. Do you have enough capacity to sustain the huge growth that the Indian railways sector is likely to see in the coming times with regards to both the general railways as well as Metro projects?
Currently, we have five manufacturing sites in India. While Marhowra is the primary factory that produces the Diesel Electric locomotives, with a capacity to produce 120 locomotives a year, we have the erstwhile Faiveley Transport factory in Hosur which is amongst the only Wabtec site in world to manufacture five transit subsystems - Brake systems, Pantographs, Couplers, Airconditioning systems and Door Leaves in one location. The site in Baddi, Himachal Pradesh caters exclusively to LHB coach equipment for the IR coach factories namely Axle Mounted Disc Brakes system and Brake Discs. In Kolkata, we have a JV between Wabtec and Texmaco which manufactures friction products, Bogie Mounted Brake equipment and Draft Gears including some exports. Our group company MTC has a manufacturing facility for Metal Bonded Rubber Products at Bangalore. Over the years, we have invested in 360000 Sq-m of manufacturing operations footprint.
Wabtec is making significant and continuous investments to enhance capacity and improve efficiency and productivity specially to meet the needs of IR where there is an exponential increase in production of Electric locos and LHB coaches. We are also working with multiple rolling stock car builders for both domestic and export projects and have established capacities for the different subsystems in our portfolio in line with the business plans of our customers. New product introductions and localization in India based on customer requirement is highest in priority for us. As a customer-centric organization, we will continue to invest in capacity and engineering innovations across our product range in all our existing locations.
What is the percent of local content used in your India made products at present?
The local content is significantly high and varies from 40 percent - 95 percent across businesses we operate in. For the locomotives, about 70 percent of the parts are manufactured or locally sourced from Indian suppliers. For Electric locomotives and LHB coaches, we have over 85 percent local content in Brakes system for Electric Locomotives and in Axle Mounted Disc Brakes System, Brake Discs and other ancillary Brake system components and equipment for LHB coaches produced by Indian Railways. We are the leading supplier of systems and solutions for India to all Metro rolling stock car builders from BEML to Bombardier and Alstom, which also have factories in India. Our products for metro rolling stock including Brakes systems, Couplers, Pantographs and Air Conditioning systems have reasonably high local content well above 50 percent going up to 65 to 70 percent depending on the product configuration and customized engineering design for each car builder. This is supported by strong after-sales support through regional Sales and Marketing offices and presence of over 150 Field Service Engineers across the country who are continuously catering to the needs of zonal railways of IR and Metro.
Are you also exporting from India?
We are exporting our Heating Ventilation and Air Conditioning systems to Sri Lanka and Nepal through ICF, Chennai which manufactures Diesel EMU train sets for Sri Lankan Railways. This is an order we received from Rail India Technical and Economic Service (RITES). We are also supplying our Brakes system for the Sydney Metro for Alstom, which is producing its metro cars at Sri city. We are also exporting our Brakes system and Couplers for some other global projects through the Korean car builder Hyundai ROTEM. We have also exported our Pantographs to China Railway Rolling Stock Corporation (CRRC), which is manufacturing trains in China for the Nagpur Metro project.
When do we see Wabtec adding ‘Design in India' and ‘Engineer in India' to ‘Make in India'?
You may be surprised to know that we have over 2000 hardware and software engineers seated in Engineering Centers of Excellence in Bangalore designing locomotives, signaling infrastructure and various electronics and digital solutions serving both Indian as well as all our global geographies. The legacy GE locomotive for Indian Railways was designed in India. We are also doing a lot of "Design and Engineer in India" for our respective subsystems. We are supported very proactively by our Centers of Competencies to train our engineers periodically so that they are acquainted with the latest global technologies. Development of talent in Design Engineering and building self-sufficiency is a key priority for our organization and we are investing significantly in it.
How's been the business so far in the ongoing fiscal. In line with the projections?
Our business this fiscal has been very encouraging, and we have seen revenue growth beyond our projections in the products segment for Indian Railways and also witnessed significant growth on the Services side of the business due to higher installed base and strong customer engagement. The metro projects business has also been stable.
What is your personal vision for the Wabtec Corporation in India & Faiveley Transport Rail Technologies India Limited and where do you see it five years down the line both in terms of the brand and revenues?
When I joined Wabtec/Faiveley in August 2017, one of the first things I worked on was the Strategic Plan, which is a five-year blueprint on where to take this business in India. In that plan, we articulated a clear vision - ‘To become an established leader and the most comprehensive solutions provider to the Indian Rail Transport market. To be a highly respected and valued brand in India to our customers, suppliers and employees.' Our vision continues to be the same and I believe we are in the path of this vision even ahead of schedule with the GET organization joining us.
There is a huge focus on digitalisation across the business world. How do you see this impact the Railways sector, both globally and in India?
For Railways there is a huge potential for digitization. A conservative estimate towards this could be at 3.5- 4 billion USD. Wabtec is looking at this opportunity as the railroad goes from automated to autonomous operations. The foundation of such technologies is already in revenue service globally. We are leveraging data to improve efficiency, performance and productivity of trains. Our brake systems are one such example at the product level wherein it can have an automated alert system inbuilt. Similarly, the locomotives in operations are also digitally monitored through Remote Diagnostics. A comprehensive and consolidated control architecture exists which enable higher reliability of the system.
On similar note, Wabtec's Interoperable Electronic Train Management System (I-ETMS) provides "Positive Train Control" (PTC) and "Communications Based Train Control" (CBTC) solutions which can be applied for Indian Railways, with more features and lower cost than European Train Control Systems (ETCS). This is based on Global Navigation Satellite System (GNSS) which does not require track sensors. It is also highly interoperable given multiple IP based communications systems which allow use of LTE, WiFi and other data radio systems. The savings opportunities are extremely high for connected railways.
The railways as well as manufacturing sectors have both been male dominated. However, women are now making inroads in both the sectors. What are your views on the same?
I have been asked this question on various occasions all my career … I don't see any reason why the Railways or any manufacturing sector should be male dominated, especially in the modern highly automated workplace. It certainly has nothing to do with competency, capability or dedication. I surmise it to be that this sector mostly employs mechanical and electrical engineers, both streams bring dominated by men from college itself… I am certain that women will catch up over time and we see that happening already…
From my perspective, when one steps into the workplace, the identity of whether you are a male or a female is irrelevant. In the modern workplace, if you have the intelligence, knowledge, work ethics and the right attitude, then gender is immaterial, and your career will progress on your merit. This has personally been my experience my entire professional life. While I know that gender-based discrimination exists in the workplace in India as well as the globe, my advice to women all over the country is to be less conscious of being a woman in the workplace. Do not attribute everything that is happening to you is due to your gender, neither should you give up the power of expecting from your company what is required for you to be a competent working woman.
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