We plan to invest $500 million in India over ten years: Dalip Sharma, Delta Electronics India
Delta Electronics India, the local arm of the Taiwan-based $8 billion Delta Group, is bullish on the India growth story. The company is present in telecom power and renewable energy solutions apart from industrial automation. The firm plans to invest $500 million in India to grab the business opportunity thrown open by electric mobility and energy storage space, Dalip Sharma, Managing Director, Delta Electronics India told Ankush Kumar in an exclusive interview. Edited excerpts..
What are the different business segments Delta is present in India and how has been the experience so far?
With global revenue of over $8 billion, we are headquartered in Taiwan. We have our presence in India for around 20 years. We have business interest here in the areas of telecom power and renewable energy space. Our market share in the telecom power industry is 75 per cent in India and we are the leading suppliers of PV inverters with a market share of over 36 per cent in the renewable energy industry. We are also a prominent player in UPS for data centres, Information Technology, as well as digital display systems that constitute video walls and projection systems. Our market share is 5 per cent in UPS, 60 per cent in display solutions and we are among the top five players in the industrial automation space. Over the past three years, we have also been actively working in the Lithium-ion battery storage space.
We have announced our fourth manufacturing plant in the country at Krishnagiri in Tamil Nadu. Spread across 120 acres of land, the plant will be operational in the second quarter of 2019 and is expected to generate employment for thousands. The current revenue of Delta India is around Rs 1,300 crore. We have grown over 36 times in the last 15 years in India and are motivated to further increase our investments in the country.
What drives Delta’s business globally? Could you provide a revenue breakup for your business segments in India?
Our leading market shares are coming from power domain. Around 50 per cent of laptops in the world are powered by Delta power supplies. About 38 per cent of the servers is powered by Delta. Around 50 per cent of our revenue comes from telecom power and renewable energy would be about 20 per cent. UPS segment contributes around 15 per cent and the rest comes from industrial automation and display systems.
How would the growth of electric mobility and renewables impact revenue segments?
The contribution from each of these revenue streams is changing very fast as electric vehicle (EV) segment is going to pick up quickly. Even the PV solar inverters are undergoing a very sharp pick up. Energy storage segment would also be a very large contributor for us. With renewables witnessing continuous growth, the demand for storage systems will also rise to back them up for renewable integration application. Storage would be a very important aspect in the public EV infrastructure deployment, otherwise, we would end up loading the grid.
Within the renewable energy segment, solar inverters, lithium-ion and EV charging, put together, contributes around 23-24 per cent of our total revenue. Five years from now, this renewable piece would form about 40-45 per cent of our total revenue. In revenue terms, this is expected to grow from the current $50 million to $300 million in the next five years. We expect our revenue to grow from the current RS 1,300 crore to Rs 3,700 crore by 2023.
What kind of growth do you expect in the newly-introduced electric vehicle (EV) charging solutions in India?
The initial pickup of the EV charging infrastructure business would be mainly on the back of public transport infrastructure because buses will be the first one to take it up. Though electric buses will not be charged in the public infrastructure, they will be charged at the depot or at the terminal. And the size of this market in the coming two years would be around Rs 400 to Rs 450 crore only for the e-bus charging infrastructure. For the EV charging infrastructure for car segment, the initial pick up would be slow as it would be mainly driven by Mahindra and Tata cars. I expect that in 2020 most of the international brands would pour into the country. And that will be the time when EV charging public infrastructure will witness a hockey-stick pickup. So, if we include public EV infrastructure and the car infrastructure together, by 2020, we see it around Rs 700 crores. We think that we have entered this market at the right time and we have the initial movers advantage.
What is the overall investment and expansion plan in India?
We have plans to spend $500 million in the next 10 years in India. In the short run, we would spend $200-250 million in the coming 2-3 years. This investment is mainly going to be in two areas – the new factory in Krishnagiri and the large innovation and R&D center we are building in Bangalore. However, the substantial amount of investment will go into building the R&D center. Currently, we have around 350 R&D engineers and we have a target of increasing this tally to around 2,000 engineers by 2020.
Currently, our total manpower is around 1,800 and we expect to become a company of around 5,000 people over the next five years. We have a presence in 140 countries and have a manufacturing base in over 40 nations. Our R&D research centers are in geographies like the US, Germany, Switzerland, Thailand, China, Taiwan and in India.