Philips sees India as an export hub to expand footprint

At the same time, global technologies will also be leveraged for serving new segments within the Indian market. Globally, Philips is an important player in the sleep disorder segment, and with 15-20% of Indians suffering from sleep disorders, the Indian arm is looking at building a portfolio in this space. It is currently talking to major Indian hospital chains which include the likes of Apollo Hospitals and Fortis for building infrastructure for this segment.

Murali Sivaraman the CEO of Philips India said "India, as a country, has two roles to play, it has to develop its market and act as a hub for improving our competitiveness globally. In next 12 months, we will be a big exporter of cardio-vascular X-ray globally. That apart, some of the new spaces that we've built organically, like water, modular switches, offer opportunities for exports to other emerging markets."

With India being a key emerging market, Philips is targeting a growth rate of over 12% here and it plans to leverage global acquisitions in Europe, Brazil and China to bring new technologies and products to India. It also plans to explore new segments such as shaving and beauty, mother and child care and premium upstream hospital equipment in the country. No wonder then that the top management believes that India's contribution to global revenues will rise significantly in the future.

Here is a verbatim transcript of the exclusive interview with Murali Sivraman on CNBC-TV18. Also watch the accompanying video.

Q:  Philips electronics has said that it will have an aggressive focus on emerging economies and plans to generate half its sales from these economies. What are the plans for India and how is India positioned vis-à-vis other emerging markets?

A: India is a key emerging market for the group and when we define emerging markets we go beyond the BRIC countries, we also look at parts of ASEAN and parts of Eastern Europe are coming specifically to India. We clearly have a pretty leading share in the lighting space, we are rapidly growing in healthcare, we are acquiring shares, we made a couple of acquisitions. We are looking at a manufacturing excellence centre both for domestic and exports purposes and in the whole consumer lifestyle space. We continue to bring our global ranges complemented with certain local ranges also we are working with a strategic new business development team. So holistically between lighting, lifestyle and healthcare, we have pretty clear organic growth options compliment what we have inorganically.

Q: Philips has plans to build India as an export hub. What are the plans for that?

A: We are in the healthcare space, the couple of acquisitions that we made, one was very much a technology oriented acquisition which was which is on the cardiovascular X-ray and the intention of this acquisition is that its just not local for local but local for global, so in the next 12 months we will be a pretty big exporter for cardio vascular X-ray globally because the technology that we have acquired gives us a competitive edge on both performance and cost and there are many other emerging markets that can leverage it. That apart, some of the new spaces that we have built organically whether you look at water or modular switches, all these offer opportunities for us to export into other emerging markets.

Q: But has the current global slowdown made you scale-back plans for exports?

A: We actually believe that post this global scale down, the whole business model globally will get redefined and even mature markets would realize that there are value conscious segments because the governments will get a bit tighter in terms of budgets they have for infrastructure and healthcare. So actually I believe this crisis is a great opportunity for emerging markets like us because the portfolios we build to be relevant and competitive in these fast growing emerging markets will also find good export potential.

Q: So with India becoming an important market, what are your projections for India's contribution to global revenues of Philips?

A: If you look at our global revenue, we are still in the range of maybe 2-2.5% and the intention is that India should increase its share of the global revenue and India will because very simply with this global crisis, the big mature markets have contracted because a part of their GDP has gone and they will take some time to catch up to their growth rates whereas our growth ambitions, not just the BRIC but all the emerging markets is to grow clearly more than two times the GDP growth rate, so simple mathematics, as we keep going forward, the share of India and the share of emerging markets within the whole global portfolio will only grow upwards.

Q: What are the new product launches you have planned for next year?

A: Next year would be a very defining year for us. Mother and Child which is leveraging our Avent acquisition in Europe which brings a whole range for both the mother and the child that will be a big launch for us in the home healthcare space. This whole creating the larger eco-system of sleep-labs working with sleep-physicians and ramping up the penetration of sleep acmnia  will be a major thrust area for us and what we have launched this year in the consumer luminaries and modular switches, ramping that up big time in terms of retail investments whether its lighting lounges which we are doing for consumer luminaries, modular switches brining in more additional range on the platform of lifestyle and safety, that would be a big thrust for us and we will continue to look, also shaving and beauty is an important space and we are a big player here globally but I think India is an untapped space. So those are some of the spaces where we will be actively focusing upon.