(Bloomberg) -- Kone Oyj spent 4.5 billion rupees ($63.5 million) to open a new factory in India, where the Finnish elevator maker sees demand increasing as more tall towers will be built to accommodate people moving to cities from the nation's vast hinterland.
The company's revenue from India will continue to grow at between 5% and 9% in the coming years, even as the country's economy slows, Amit Gossain, managing director of Kone's India unit, said in an interview in Chennai on Tuesday. India contributes about 3% to Kone's global sales.
“We know the market has been challenging for the past few years,” Kone's Chief Executive Officer Henrik Ehrnrooth said at a briefing. “You have to take a longterm view and you have to look at what the megatrends are: the Indian population is growing. It is an urbanizing population.”
Kone is betting that Prime Minister Narendra Modi's pledge to offer affordable housing to all Indians by 2022 will drive the construction of apartment blocks and boost demand for elevators.
India is the world's second-largest elevator and escalator market with sales of about 50,000 units a year, according to Kone. The company says it holds about 23% of the market.
To contact the reporter on this story: Ganesh Nagarajan in Chennai at gnagarajan1@bloomberg.net
To contact the editors responsible for this story: Jeanette Rodrigues at jrodrigues26@bloomberg.net, Anto Antony
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