Interview The Rise of India
MachineMarket India speaks to CSO, Walter & Ewag, Christian Dilger, on the global machine tool industry and India's role in it.
What is your outlook on the global machine tool industry for this year?
We are cautiously optimistic in terms of normal business development, for our brand Walter; we expect a slight growth as compared to 2016 whereas for our other brand Ewag, we expect a higher growth. This is because we have introduced new products and technologies such as the Laser Line Precision and Laser Line Ultra machines that have tremendous growth in the market. This year, we plan about 3% more growth as compared to 2016.
Last year in China, we witnessed a sharp decline in the economy however we expect it to recover this year. In America, there is certain optimism in the market owing to the appointment of Donald Trump but at the moment, it is not possible for us to make any predictions.
In Europe, we expect a solid growth like every year. The year 2016 was extremely good for us and we could compensate our declining Asian sales with Europe’s growing sales. One of the strongest markets in Europe right now is Italy and we see tremendous growth there. All over the world, we will see good development but not tremendous growth.
How do you view the India market for your business?
At the moment, India is a very small market for us. Around 5% of our worldwide business comes from here but we are witnessing constant growth. We hope that within the next 5-10 years we see acceleration in the growth of the Indian market.
Most of the leading machine tool manufacturers are importing their machines from Sweden based Sandvik or Kennametal from America. On the other hand, many medium sized Indian tool manufacturers are growing quickly. These players buy new machines from the local market and since we manufacture or design new machines for this market, we have a very high demand from them. For this year, we expect our Indian business to a growth at least 5–10%.
Kindly provide us with a bifurcation of the demand of your machine tools from various countries.
On the global scale, in terms of tools, I would say about 25% of the demand comes from China, about 25% from the rest of Asia (including India, Korea, Taiwan and Japan), about 25% from Europe and the remaining 25% from the USA. In the next decade, we expect that much more business will be done in Asia as many industries are moving into this market.
Reports and experts suggest that India will be the next China. What are the measures that India should undertake to move in this direction?
If you look back in China about 20 years ago, it didn’t look very different from India. We saw tremendous growth in China in a short period of time. This was because the Chinese Government provided many incentives to companies, for instance, when a foreign company moved their production unit to China, they had to pay only 20% tax, 80% tax was waived off. This was one important factor.
The second was heavy investment into infrastructure. For India, if we make the analogy it would be extremely important now to have investment programmes for foreign companies and invest in infrastructure. This is essential for India, if the government moves in this direction it will rise in the same direction as China.
Thank you for the interview.