Siemens to Invest $40 Million in Indian Operations in 2009 Despite Economic Slowdown
Despite the economic slowdown, Siemens Limited (Mumbai), a subsidiary of Siemens AG (Munich, Germany), is moving forward with plans to invest $40 million in India during the next fiscal year. According to Industrial Info Resources (Sugar Land, TX), the firm plans to make the proposed investment across various business verticals with special focus on the infrastructure segment. The proposed plan is part of the firm's ongoing investments in India where it has been investing about $40 million per year for the last two years. With more than $178 million in liquid assets, the firm will rely on internal accruals to fund the investment program.
For the year ending in September 2008, Siemens Limited reported an increase in sales turnover by 7 percent at $1.65 billion, compared with $1.53 billion last year. The firm registered an after-tax net profit of $117.5 million, the same as the previous year, largely attributed to an increase in costs in certain large projects. In its base business, the firm registered an increase of 21 percent in sales, 27 percent in orders and 68 percent in profits from operations compared with the last fiscal year. The firm secured new orders of $1.73 billion over a period of 12 months ending on September 30, 2008. The value of unexecuted orders as of September 30 stood at $1.95 billion, 5 percent higher than 2007.
At an annual general meeting, Managing Director Armin Bruck declared 2007-08 as a period of satisfactory growth and said that the company is looking at the present 2008-09 fiscal year with "cautious optimism." The firm is focusing on attaining equal growth for all the sectors in which it is active in the current fiscal year. The firm's key business drivers in India are in the power, automation and drives, and industrial solutions and services sector. Bruck also maintained that the firm's software division, a captive unit that caters to companies of the Siemens Group, was not affected by the prevalent economic downturn.
Siemens Limited is also taking steps toward merging group companies. It has approved a divestiture of its 51 percent stake consisting of 2.1 million equity shares of U.S. 0.198 cents each in its subsidiary, Siemens Information Processing Services (Bangalore, Karnataka) to Siemens Corporate Finance, which is a wholly owned subsidiary of Siemens AG. The organization's management has also approved the acquisition of the balance 50 percent stake consisting of 2.16 million equity shares of U.S. 0.198 each in Flender (Kolkata, West Bengal), which would become a wholly owned subsidiary of Siemens Limited.
