Siemens Ltd, the Indian unit of German engineering firm Siemens AG, is planning to invest Rs 1.5 billion ($ 34.5 million) in a new power transformer factory to serve the domestic and export markets. The new factory in Kalwa, near Mumbai, will go on stream by the end of 2006. Jurgen Schubert, managing director, Siemens Ltd, said, "Establishment of the transformer factory will enable us to provide an entire range of products in the power transformer and distribution businesses." Schubert said that the Greenfield project met with competition from China, but quick approval from the Maharashtra government swung the decision in Indias favour.
Power demand in India - Asias fourth-biggest economy - is expected to rush as more companies set up cement and steel plants to meet the growing needs of the economy, which is forecast to grow by about 7 per cent in the year to March 2006.
Siemens has now committed Rs 5 billion to India over the past year, as part of $ 500 million it plans to plough into the country over the next three to four years. The new factory is expected to add about Rs 1.5 billion to Siemens turnover by 2009-2010.
The power transformer market in India is estimated to have a capacity of 40,000 MV per annum, and Siemens officials estimate that the demand will grow between 8-10 per cent over the next few years. "Looking at certain market trends, there would be a demand of opportunities for transformer capacity in India. This demand has got a big push from power reforms that the government is planning," Schubert said.