Kojin Nakakita, Managing Director, Hitachi India Pvt Ltd, speaks on the macroeconomic environment in India and the areas he plans to focus upon.
You have been present in India for a long time. How do you view the new government´s thrust on building new infrastructure assets across the country? Firstly, while the global market remains volatile and has an impact on the Indian economy, India is expected to retain a growth rate of 7.3 per cent for FY 2015-16, as per the International Monetary Fund (IMF). This makes India the world´s fastest growing major economy. This is an attractive ecosystem for business and infrastructure. Secondly, the government has committed itself to expanding infrastructure investment and promoting a healthy ecosystem for ease of doing business. This is obviously a positive sign for companies which are driving concerted efforts of doing business in India. The ´Make in India´ campaign is another positive growth indicator for the Modi Government. Not only does it promote growth in infrastructure, it also showcases the ample business opportunities in India, thereby opening up to more FDI and investments. This initiative offers world-class products to the Indian populace through localisation, generates employment opportunities and creates export opportunities for India.
Based on this momentum, we believe that growth in Indian economy is a positive sign which will also complement Hitachi´s business and expansion plans for the Indian market.
What are the benefits that Hitachi can give to India as part of the close cooperation between Indian and Japanese companies and indeed, between the two governments? Bilateral relations and commitment between governments creates an encouraging environment for companies to do business in India. The moment Japanese companies are confident of the relationship between the Indian and Japanese governments and perceive the ease of doing business in India, Japan´s contribution to the Indian economy will be highly visible.
India and Japan are partners in progress. In fact, Japan was one of the first countries Prime Minister Narendra Modi visited after he took charge. This clearly showcases the government´s commitment to making India an investment hub. India has the right mix to become one of the largest economies in the world, as the government continues its momentum and creates policies that support growth.
Bilateral ties instill faith and confidence in companies. A positive phase like this fuels growth and allows for companies like Hitachi to explore opportunities for business expansion in India.
What are the opportunities that you are excited by and in which of these are you most keen to participate?
Hitachi´s main focus areas in India will be IT, healthcare, water, oil & gas and transportation. We expect a growth spurt in these verticals and are prepared to extend our support and technical expertise to the Indian government.
Rapid urbanisation brings with itself myriad infrastructure complications which have impacted countries globally. On account of Hitachi´s global presence and diversified experience across industries, we have developed an in-depth understanding of the issues that plague countries due to rapid urbanisation. We look forward to partnering with the Indian government to overcome these growth challenges and contribute to nurturing cities and towns to become self-reliant and combat rapid urbanisation issues which is in line with our vision of building a sustainable society.
What are the capabilities you bring to India? Do your strengths lie in consulting, technology and execution, or are you present across the value chain?
Hitachi´s capabilities and forte are all aligned to our Global Brand theme - Social Innovation - It´s our Future. All our business verticals work to deliver on this concept and in India also, we focus towards driving the Social Innovation Business. Essentially, this theme implies how we as a company can help nations overcome their infrastructure issues and leave a safe and comfortable future for the generations to come.
Since masses of people are immigrating to cities every day, it is putting a lot of pressure on the infrastructure currently existing in the cities. The zeal to solve society´s issues and enhance people´s living standard form the underpinning of Hitachi social infrastructure businesses which include power, rail systems and other industrial solutions. Hitachi can boast of best-in-class IT solutions and services including payment services, IT platform solution, software solutions, data centre solutions, IT services and GIS solutions.
These are some of the ways Hitachi is progressing towards the path of achieving its mission. The crux of our business principle is ´Collaborative Creation´. This is an approach where Hitachi creates innovations (such as state-of-the art products and services) by incorporating the knowledge and experience of our partners and customers. Therefore, our innovations are very much a result of the feedback of our partners and customers.
Smart cities is a big project of the Indian government. However, it needs at least a few basic things like water, waste management, energy and transportation. These are essential for any smart city. How are you going to be able to help in any of these areas? Can you tell us which cities are you looking at in the first phase?
The Smart City Project offers ample opportunities for Hitachi to partner the Indian government. Hitachi can provide infrastructure systems such as energy, water and transportation systems basis our experience in implementing these systems globally. Therefore, Hitachi can participate in addressing even the most very basic aspects of smart cities in India.
Hitachi has already collaborated with CII to form a consortium that will create pilots and replicate them pan-India for setting up 100 smart cities - the dream project of Prime Minister Narendra Modi. Hitachi is leveraging opportunities across sectors. For instance, in the healthcare sector, Hitachi is conducting a feasibility study at AIIMS (All India Institute of Medical Sciences) in partnership with New Energy and Industrial Technology Development Organization (NEDO). This study is aimed at analysing existing energy efficiency conditions at the hospital and how to best structure the humongous database of medical records of patients which are in millions today. Once we kick start delivering on the expertise we possess, visible transformations will be witnessed and the length and depth of the entire smart city project would be observed post implementation.
Are you interested in the high-speed train projects in India? Are you in any discussions with the government and at what stage are these discussions in? Have the feasibility reports been prepared and presented?
At the outset, I would like to state that Railways is a very exciting sector for us. Just recently, two consortiums led by Hitachi bagged contracts worth Rs 2410 crore from Dedicated Freight Corridor Corporation of India Ltd (DFCCIL). These two orders are the biggest ever placed in India for Japanese signaling and telecommunications works. These contracts are to be implemented along part of a dedicated freight corridor traversing India´s biggest industrial cluster between Delhi and Mumbai. Besides this big win, Hitachi does intend to make serious efforts in the High Speed Railway (HSR) network by Indian Railways. As and when there is any development, we will update you on the progress.
What do you think are the biggest challenges of infrastructure projects in India? How do you plan to deal with these challenges?
India has all the right ingredients for becoming self-reliant in the infrastructure domain. The need of the hour is to structure the policies and processes that not only pave way for an efficient rollout of infrastructure projects but also assures the partners about fulfilling future commitments.
By future commitments I mean ensuring the technological experience that goes into an infra project becomes a benchmark for related projects and we become the preferred partners for such projects. Like I stated earlier, once the environment becomes conducive, India will naturally start falling in the developed country´s league and the future looks promising in the years to come.
As the new MD of Hitachi India, what are your plans to drive the company´s growth here? Where do you see Hitachi India in the nest 5-10 years?
Hitachi enjoys an unshakable and strong relationship with India, forged over a period of 8 decades. Today, Hitachi has around 30 business bases and over 10,000 employees in India. It is a privilege to spearhead an extremely competent and talented team at Hitachi India.
The future in India seems challenging, yet promising. The Indian government has ambitious plans to transform India and this is a conducive environment for Hitachi to globalise and localise Indian operations. Hitachi aims to contribute to a sustainable society in India as well as the country´s economic growth by offering its technological expertise and ´Social Innovation Business´. We have earmarked an investment of around 70 billion JPY from FY 2012 till FY2015.
As already stated before, our focus areas in India will be IT, healthcare, water, oil & gas and Transportation since we see a large growth potential in these domains. The business sentiment in India is appropriate and offers varied avenues for growth and expansion of Hitachi´s footprint in India. Our key focus will be to strengthen and consolidate our position.