“Our Indian Business Is The Fastest Growing Business Across Markets”
Headquartered in the United States, NYSE-listed Belden Inc. is a leading global provider of network infrastructure and digitization solutions. BW Businessworld caught up with its President and CEO, Ashish Chand, on his first visit to India after taking over the reins at Belden in February 2023 to understand the company’s India playbook. Excerpts from a conversation with Arjun Yadav:
What’s behind Belden upping its game in India? What are the indicators that are driving this interest?
India is a very interesting country where new infrastructure is being built and made more efficient using technology. Typically, countries first build infrastructure and then make it more efficient. But in India, this is happening in parallel. Many other indicators make this market attractive, such as the demographic dividend, the growing middle class, and their aspirations. Credit is growing at 15 per cent per annum, showing a lot of investment capacity. But at the same time, there can be issues around capital efficiency. If capital doesn't become more efficient in India, it can lead to too much debt. The purpose of my visit was to reassess our posture, expose some of my colleagues to the realities of India beyond the headlines, understand the pros and cons of each of these dimensions and see where we can add value.
How do you see the thrust on infrastructure in India and how do you see Belden tapping it?
If we look at public investment within India over the last three to five years, 95 per cent of it has gone to transportation. So, that certainly is a big focus area for us.
The second aspect of investment is in power transmission and distribution. Some parts of India may not yet have electricity, but the interesting part is that there is a surplus in power generation. We don't have enough power because of transmission and distribution losses and inefficiencies. This is an excellent example of where capital efficiency is critical.
One underlying, overarching theme here is critical infrastructure. Simply put, it is the infrastructure that cannot be switched off once you switch it on. For critical infrastructure you need very robust solutions. These cannot be typical enterprise-grade solutions. That's where Belden comes in. We have highly robust solutions that go from data acquisition to data transmission to data orchestration and management. They are designed to operate under extreme situations, including cyber-attacks, floods, etc.
How much does India contribute to your top-line at present?
India, at present, contributes to our revenue globally in single digits, around 2-3 per cent. It's not that dramatic. However, our Indian business is the fastest-growing business globally. We grew at well over 35 per cent over the last three years on a compounded basis, and that is very significant compared to how our revenues grew in other parts of the world. This is why we want to double down on investing in India.
Ashish Chand, President & CEO, Belden Inc.
How does Belden plan to enable this growth in India? Can you elaborate on the investments?
Belden offers network and data solutions. Data is generated and needs to be moved reliably and cost-effectively. Before it's processed, it must be stored somewhere. We collaborate with our customers to understand their workflow; then we develop a solution that addresses their pain points and provides efficient data flow. For this reason, we created Customer Innovation Centers (CICs). These are large technology centers and validation labs. We have built four such centers globally and recently inaugurated our fifth Customer Innovation Center in Bengaluru with an investment of about Rs 100 crore. Beyond this, we have made significant investments to build our talent as well as manufacturing facilities in the region. We recently held the ground-breaking of a new manufacturing facility in Chakan, Pune, a suburb where we have been manufacturing for the last five years. This represents an additional investment of around Rs 340 crore. Overall, we are investing in solutions as well as in the capacity to support the sales pipeline.
You had a mixed set of numbers in your recent quarter? Give us an update on what was at play and the guidance for the coming fiscals.
Our automation business continues to grow, due to a labour shortage in the United States as well as across other developed markets. The only way to implement reshoring is through automation. Broadband as a business continues to grow because there are many places where high-speed internet is still unavailable. The smart buildings business has been more sluggish due to work-from-home or hybrid working phenomenon, causing a reduction in the need for commercial spaces. Therefore, a lot of our business is moving to hospitals, hotels, higher education, etc.
Regarding the outlook: Belden will continue to grow globally in the midterm at mid-single digits. Within that, our automation business will grow at higher single digits. Smart buildings will grow at lower single digits, and broadband will be in the mid-single digits.
You are the first non-western and Indian origin CEO in the company’s 120+ years of history. What led to your appointment and what is the legacy that you wish to leave?
First, it reflects Belden's openness; they are so open to new ways of thinking and bringing in new talent. I've been with the company for 22 years and have been exposed to multiple aspects of doing business.
My appointment has much to do with the type of challenges our customers face globally, which we try to solve through our solutions. This approach began when I was the head of the APAC region at Belden and has evolved to become our global strategy. Finally, the fact that I come from a country that is very innovative and solutions-oriented has worked out very well.
As far as the legacy is concerned, the world is far more complex than it used to be. But I also think it's far simpler. It is complex because there are more variables that you must deal with. The era of the superhero CEO, who can deal with all those variables alone, has passed. I think now we are in this era of teamwork. So, you will assemble teams equipped to handle complex problems versus one person knowing it all.
I want to leave this job better than I found it. That means completing Belden's transformation from a product to a solutions business and enabling complex connections - be it at a hospital or an airport. We need to build that into Belden's DNA; therefore, talent development is the biggest task that I can do in this position, to ensure we have empowered leaders to carry the company into the future.
