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    Xylem bets big on India, may make export hub here

    Synopsis

    Water solutions company considering adding another factory in India that will localise its water treatment technology.

    water---gettyGetty Images
    The company is currently sourcing $80 million of products out of India for other markets, registering a high double-digit growth rate since 2014.
    MUMBAI: American water solutions company Xylem Inc. has zeroed in on India as its fastest growing market in the next three years even as it readies the country to be an export hub by localising production, a senior executive told ET.

    On his visit to India last week, Patrick K. Decker, Xylem’s CEO, compared the current scenario with the India he knew in the nineties, which was full of promise but slow to fulfill it.

    “Back then, whenever I would come, I could predict the front page of the newspaper. Because the opportunity was always one year away. But that has changed now. The pace has picked up. We're a water technology company… getting it right in India is critically important,” said Decker.

    Finding a rare similarity with US, Decker underlined the “extreme flooding” in one part of the country and “extreme scarcity” in the other. “We have the same challenges in the US, just maybe not the same scale as we face here in India,” he added.

    Xylem is considering adding another factory in the country that will localise its water treatment capabilities.

    The company presently earns around $100 million (Rs 700 crore) from the country out of a total global revenue base of around 4.7 billion dollars. It’s currently sourcing $80 million of products out of India for other markets, registering a high double-digit growth rate since 2014.

    “Currently, the China-India combine represent less than 10 percent of our total revenue…but in terms of growth rate, in the course of next three to five years, India is expected to be our fastest growing market,” said Decker.

    Decker also said that even though its strategy of acquiring companies in the clean water and wastewater side is 90% complete, it may look at larger scale mergers and acquisitions in the industrial water management side.

    "There, I would say, we scan the world globally and certainly keep our eyes open in India...it's important that whoever we acquire has a capability in India, has a channel in India, or at least has a technology that we believe would be applicable to India that could be localized," Decker said.

    But before considering acquisitions, Xylem would look at scaling its projects and bidding pipeline that has already been growing at a high double-digit rate.

    Xylem, Decker said, is immune to the recent trade tariffs spats between countries as its strategy is to focus on the local market.

    “We do not import that much into the US from other countries, other than mainly Sweden and Germany. We don't import a lot from China, or from India, as of yet. So, there's not much of an impact on us in terms of the increased tariffs that are being levied or are being talked about in the US,” Decker said.

    Roughly 90% of Xylem’s revenue in India and China is for the local market. “So there's very little, you know, kind of retribution effect on the other side. Again, a little bit, but it's manageable from our perspective,” he added.

    The NYSE listed company has its products installed in the municipal, irrigational and industrial sectors in the country and is working at de-polluting the river Ganges through the Ganga Action Plan, as well as playing a role in the Smart Cities Project.

    Through its engagement with local as well as global NGOs, it wants to position itself also in a socially relevant manner by penetrating related areas like sanitation and supplying treated water to people in villages.

    Apart from setting 25 water towers a year in India’s remote villages, the company now wants to play a part in tackling floods that have wrecked the southern state of Kerala.

    “We are trying to talk to the government and it’s still a work in progress,” said H. Bala, managing director, Xylem Water Solutions India.



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