Legrand India, part of France’s €4.5-billion Legrand Group, which operates in 70 countries, has logged 10-fold growth in India since its entry in 1996. India operations account for 4-5 per cent, or Rs 1,500-1,900 crore, of the group’s turnover.
Today, Legrand is the industry leader in circuit breakers and second in wiring devices in India. Jean-Charles Thuard, MD and CEO of Legrand India, spoke to Business Line about the company’s 17-year run here. 3p Contactor
How did you enter India?
We entered through the acquisition of switchgear maker MDS and then Numeric India and Indo-Asian.
We have grown 10 times over the past 10 years. Initially, we imported products from Europe (from the parent company’s units) and developed our business, while progressively building a base to manufacture them in India.
We have replaced the old range. We have, over time, brought our wiring accessories range to India. We now make moulded case circuit breakers (MCCB), bus-bars (power distribution racks) and cable trays (metallic part for cables).
What is the percentage of imports in your India sales?
Eighty-five per cent of what we sell is made here.
What is that you do not make in India?
We are in a business where you need sales volumes, up-to-date technology and, importantly, competitive pricing alongside.
We import home automation systems. Legrand has a few bases across the globe for the product. The main one is in Italy from where we import. Typically, we start by importing and, when the volumes go up, we begin manufacturing. That is what we did for MCCBs and cable trays. At the beginning, the products offered were copy and paste. Now, they are designed for India and made in India.
The competition you face in India and your strategy…
India has all the international players and strong domestic manufacturers such as L&T. There are a large number of local manufacturers, who offer low-cost products.
However, due to transfer and acquisition of knowledge, we are able to make products that comply with international standards and that are priced as per India needs.
How do you lower prices?
When we develop a range of products, we also develop strong suppliers who work with us. Sometimes, we design their manufacturing processes. We certify them and accept supplies from them only when satisfied with the quality standard.
Do you export from India?
Up to now, Legrand India was a base for the local market. However, progressively India will become a manufacturing hub for the Asian markets. Further, the environment and exchange rates are favourable for export.
What sort of products will you export?
They will be wiring devices and energy distribution products. We expect exports to form 10-15 per cent of our India business from 2014.
How much has the rupee depreciation hurt you?
It does not affect our bottom line. We have tightened expenses, improved efficiency and partially passed on the price increase.
You were earlier with Legrand China. How much were the exports from there?
The main part of production was for China.
Then why is the India operation looking to export?
It is a question of volume. It is better to concentrate the volume somewhere to export part of it and take advantage of the production facilities.
From China, we import door-entry systems, where the market is huge for the product. It does not make sense to start manufacturing it here.
Here, we are stronger in MCCB and we will export it. Legrand facilities are complementary.
Finally, it is a choice dependent on investment, additional cost, transportation and taxes.
> shanker.s@thehindu.co.in
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