World Is Moving Towards Regional Supply After The Pandemic, Says Metso Outotec CEO
Dependence on a single supplier such as China is a concern among customers, says Pekka Vauramo.
The world is moving closer to regional supplies for equipment after the Covid-19 pandemic raised concerns over restricted supply chains, according to Pekka Vauramo, chief executive officer of Metso Outotec.
The role of global manufacturing hubs like China came under the scanner as it increased dependency on a single location, which impacted global supplies during Covid-19, said the CEO of Finland-based supplier of infrastructure and mining equipment told BQ Prime. "As the world is fragmenting and new trade barriers get imposed, it makes sense to meet supplies from factories nearby than to depend on global hubs,"
It makes sense to have sustainable operations as logistics' contribution to Metso's carbon dioxide emissions is around 60% as compared with 40% from plants, Vauramo said. "Moving factories closer to demand centres will help reduce emissions from logistics as well."
Pekka Vauramo, CEO, Metso Outotec. (Source: Company)
He expects the company's largest facility in Alwar, Rajasthan, to become the global supplier of equipment to customers in Europe and the U.S. Metso has invested Rs 1,350 crore in India, of which Rs 650 crore was invested in the past three years.
The Alwar factory facilitates manufacturing of several Metso Group brands, he said. In addition to the mobile Metso Lokotrack, McCloskey, and Tesab equipment—used in the construction and mining industry—the site also produces wear parts and pumps for the aggregates and mining industries.
In India, the company’s equipment have been used in some of the major infrastructure and mining projects including the Statue of Unity in Gujarat, major airport expansion projects in Delhi, Bengaluru, Hyderabad, and Kannur (in Kerala), he said.
Metso’s Indian operation has been exporting around 50% of the equipment manufactured from the factory in Alwar and the foundries in Ahmedabad and Vadodara. Besides, it has invested in research and development facilities in Vadodara and Alwar engineering centres, which house 250 employees each.
Kamal Pahuja, president of Middle East and India at Metso India. (Source: Company)
India contributed around 7%, or Rs 3,276 crore, to Metso’s global sales, which stood at Rs 47,700 crore in 2022. “We expect Indian sales to grow at above the market rate. If market grows at 10%, we will grow at 11% to 12%, given strong demand from infrastructure projects like highways, railways, river-linking projects, and hydroelectric projects,” Kamal Pahuja, president of Middle East and India at Metso, said.
The company is focusing on going green and against its global sales that is 24% planet-positive, its Indian operation is catching up and around 20% of its sales are planet-positive, Pahuja said.
