We are bullish on how 2021 is going to playout: Nalin Jain, Wabtec’s Digital Electronics Business

After the completion of the merger between GE Transportation and Wabtec in 2019, Wabtec joined the ranks of the top three manufacturers and suppliers of rail globally, with a combined worth of $9 billion.

The company has one of the largest foreign investments in India's railways sector. It operates a diesel locomotive factory at Marhowra in Bihar. The company has a contract with the Indian Railways to supply 1,000 locomotives, estimated to cost around Rs 14,656 crore.

Nalin Jain, the Group President of Wabtec’s Digital Electronics Business globally, talks to Moneycontrol in an exclusive interview about the company’s global digital electronics portfolio, its software applications, mission-critical controls systems as well as the Marhowrah project. Edited Excerpts:

What is Wabtec’s digital business all about?

The business is divided into five different divisions or segments. There is an equipment business where we manufacture our locomotives and mining equipment. That's the one I was running before I took this role.

The second segment is where we provide maintenance and after-sales support to our locomotive and mining businesses. The third is what we call digital electronics, which is where I sit now. In this business, basically we manufacture three-four types of products. There are onboard products that go into locomotives or wagons and these are different types of digital technology. Then there is a segment in digital, which is focused on network and operations. These are the control centres that run the operations of a rail network and terminals, yards and ports - all that sits in this segment.

There is a third segment which is called core electronics and analytics; they do a lot of hardware design as well as analytics which is IOT (internet of things). Then there is a fourth segment which is called signalling and communication. We do classical signalling and side projects; that's what digital is all about.

The other one is what we call freight components in which we manufacture components for rail cars and we also make multiple products, which go to different industrial applications like turbochargers and heat exchangers.

The last segment is what we call transit and it basically caters to the metro segment, as we call it in India. They manufacture many different types of technologies or products, from brakes to doors to refrigeration air conditioning systems and multiple passenger information systems, among others.

Where does India stand in Wabtec’s global portfolio? What is the status of your Marhowrah project?

After the merger between GE Transportation and Wabtec, at a combined company level we are around $9 billion now. We have 27,000 employees in more than 50 countries. India is the third largest from an employee population standpoint after the US and Europe.

Take the case of Marhowrah. We have already supplied over 300 locomotives, which are delivering a lot of value to the railways. They say that the usage and the running kilometres on all those locomotives are going up every month. On the western corridor or a northern corridor, there is enough that these locomotives are doing right now for the Indian Railways.

Following COVID-19, your digital segment revenue has come down by 22 percent. What is the recovery road?

Digital is a growth business for us. We did see a bit of a decline last year, which was primarily driven by Coronavirus and slow down in capital investments that the railroads are making.  The software revenues were not coming in, because our revenues are dependent on operations. So, all of that is recovering now and the US is hoping to get back to 2019 levels in terms of freight activity in 2021.

The first three months’ trends are looking promising. But then we still are in a very, very unpredictable world because of the second wave, third wave and all the spikes, which are happening in different parts of the globe. So, we will continue to watch it. We are bullish on how 2021 is going to play out, especially on the digital side.

Which are your major products in the digital segment?

So, the group which is called Train Performance, and Automation in our business is the one that focuses on onboard products, which finally go on to a locomotive.

There are three or four types of products, which go into a locomotive. They create value, generate productivity, visibility, and all those things that everyone wants. Through digital, we are trying to drive more productivity, safety, operational excellence, more visibility and predictability on train operations. All this is enabled through our digital operations.

We have products like a radio-controlled locomotive management tool called Locotrol that can take decisions on accelerating and decelerating, which can help in operating longer trains. Similarly, there is another product or another solution, which we call Trip Optimizer, a software that allows running the locomotive in a kind of auto-drive mode. In the railroads in the US, we have around 20,000 plus such systems installed now. They save close to 500,000 gallons a day of fuel, which is 10 percent of their fuel cost. So, this is a very successful product.

We are also pushing for PTC or positive train control. PTC ensures that when you're operating a train on a network, it is following certain guidelines and directions to guarantee a safe operation. So, it will tell the driver, `you need to slow down this train because you're approaching a signal’, or `you need to slow down your speed from 50 miles an hour to 40 miles an hour because the next 10 miles is going to be weaker track or more traffic or whatever else’.