<div>The turnstile is not something that a regular traveler on a metro rail system will give a second look. But, there is engineering, technology and security systems built into it. That is one of the security products that Gothenberg, Sweden-based Gunnebo AB makes. India is currently the third largest market after France and the US for the $ 1 billion Gunnebo. <strong>Per Borgvall</strong>, President and CEO of Gunnebo AB was in India as the company looks to focus on acquisitions as a growth strategy in the country to maintain an annual growth rate of 25-30 per cent. He spoke to <em>BW</em>'s <strong>Anup Jayaram</strong> on how the company looks to expand its presence in India. Excerpts: <br /><br /><strong>Your India business has gone up very sharply…</strong><br />Yes. Over the last 2-3 years there has been very rapid growth. Due to the fact that we are predominantly in the financial sector, it has been very strong growth. India was for us 2 years ago the fifth biggest market. Just a few months ago, India became number 2. Then we made an acquisition in the US a few weeks ago. So, India is number 3, but with a good chance to come back.<br /><strong> <br />You have been acquiring a lot of companies over the years…</strong><br />Over the last three years we have not made too many acquisitions. We have been focused on getting our act together. This group was established by making over 40 acquisitions during 1995-2005. Then we went into a phase of consolidation. Now we are into a new phase-it is all about growth. One way to grow is of course through consolidation. And we have a global agenda-we have decided to be strong in major world markets. We are looking for positions that would give us that geographical expansion, to strengthen our core business and to develop new business lines.<br /> <br /><strong> How do you see your India business plans over the next few years?</strong><br />Growth is the key word for all large corporations. When we started our strategic platform we are working on today, about 3-4 years ago, we had a very strong foothold into India which is now eight years old. But we haven't for a long time invested in India. I saw the opportunity in India. We started with people, since business is about people. It doesn't matter if you have the best strategy if you do not have the right people. Then we started to invest in the marketplace. As a consequence we invested in the factory and the capacity in the factory. We have invested over 3 million euro last year to expand our capacity for manufacturing. We will invest more. On a global perspective, we see that there is a slowdown in growth everywhere. However, everything is relative. The slowdown in Europe-particularly in southern Europe-is much stronger than in India. Then you have to look into specific segments of the marketplace. <br /><br />In India we see two sectors that are very interesting. The financial sector in India is growing much faster than the GDP. And we are averaging a growth of 30 per cent over the past several years since we are a major supplier to Indian banks. The second one is infrastructure, where in many markets we have a strong position. There is a security need for airports, metro systems, the railways, power plants and important buildings. I see both these sectors to grow over the next few years in India. <br /><br />I travelled on the expressway between Noida and Agra and saw a fantastic investment in infrastructure. If all the new projects around the metros and new airports come to reality, there will be a fantastic opportunity for our business. These are the two sectors where security and system needs will be huge. That's exactly where we have positioned ourselves. <br /><br /><strong>Also Read: <a href="http://www.businessworld.in/en/storypage/-/bw/gunnebo-plans-to-diversify-into-infra-in-india/368241.0/page/0">Gunnebo Plans To Diversify Into Infra In India</a></strong><br /><br /><strong>Do you see your company restricting itself to these two sectors or are you looking at other opportunities?</strong><br />In financial services, we follow the cash. We work with the national banks, the retail banks, the cash in transit companies and the big retailers. That's where the cash loop is. The other is infrastructure in the form of access control and building protection. <br /><br />However, if take India as an example, we are predominantly a physical security provider to the banks. That's where we have our stronghold. However, what we currently are doing is to expand the scope of business, because we know the marketplace and the segment we want to be in. So, for instance we are looking at electronic security, services and system integration. From a group perspective, the things that we are doing in other markets are relatively new for the Indian market. So we will extend in our strategic focus and broaden our presence in the market.<br /><br /><strong>So are you looking to invest more in India?</strong><br /> I am just coming from our plant at Halol. I just inaugurated the latest expansion of that plant that increased our capacity by 75 per cent. And we have invested over 3 million euro over the last 12 months. And, interesting enough, we are thinking about the next phase already. There are no final decisions, but we already have the plan on the drawing board. So what do we need to do? First, we need to keep up with demand in the market place. Second, with this expanded scope of business, there will be a demand for other products, historically not produced in India. So, therefore, we will have to look carefully for what kind of investment we need to do to have a 'Made in India' stamp for core products that are made for the sector. No final decisions on that, but that is what we have currently on the drawing board. Generally speaking, we are very happy to invest, because we have a very good payoff, and a very healthy business in India. <br /><strong><br />Are you looking to use the Indian manufacturing base for exports?</strong><br />There are two things about manufacturing platforms in India. The first is expanding capacity, because we have to keep up with the demand. Over the last three years, we have had out hands full keeping up with the demand in the domestic market. However, in future we are looking to extend that business as a global exporting base. But, over the last three years our hands are full with domestic business. We would very much like to have a manufacturing base in India to cater to the global business. With the current demand in India, our hands are full meeting domestic demand. <br /><br />We have a large manufacturing facility at Halol, with room for expansion. There are benefits to consolidate at one big place. However, we will look to set up an alternative platform if that is beneficial for the business. <br /><br /><strong>The government has opened up FDI in retail. Do you see that as a huge business opportunity in the future?</strong><br />In a way, yes. As I said, we are focused on following the cash. We operate in the landscape of the retail banks, cash-in-transit companies and retailers. And that is exactly where the cash is looping and of course if lots of international retailers will enter the market, they will have to have systems to protect their assets and money in the loop. Many of them are already customers of ours in other markets. Having said that, I think there are at least a couple of years of work for all of them before they are able to establish themselves. <br /><br /><strong>Will you be dealing in following the cash here too?</strong><br />All markets are different. It all starts with the central bank and we are dealing with the central banks on a global arena. Then the retail branches need equipment for their branches. Then in many markets the cash logistics is outsourced to the cash in transit companies. However, that is not the case in India, because the central bank is still dealing with it. In many markets there is another play in the form of cash in transit companies. We are already in that business in India as we are with the big banks and helping them with opening new branches. The gold loan banks which have grown significantly over the last couple of years are another sector which is unique for India. <br /><br /><strong>Are you looking to get into sectors like defence and government security too?</strong><br />There are two types of security for high demand buildings. Defence and government are two important sectors for us. If you look at the business in this sector, there are two issues-one is perimeter and access security equipment. The other is the security demand within the building. Then of course there is electronic security. This is exactly where we invest currently in India to try to extend our business to this traditional perimeter security and access control systems.</div>
