Q&A with Stephan Schmitt, Chief International Officer of TUV Rheinland
German firm TUV Rheinland, a global technical services provider, which started its India operations in 1996, today has 23 offices in the country, with 400 employees catering to the domestic market, to Sri Lanka, Bangladesh, Pakistan, Nepal, Bhutan, and the Maldives. TUV Rheinland intends to provide high-quality services, to become a top product testing service provider in the region. Stephan Schmitt, Chief International Officer, TUV Rheinland, on a recent visit to Bangalore, spoke on various issues relating to its Indian operations. Excerpts
How is the business doing globally especially in Europe under the present economic scenario?
As a service provider in the TIC (testing, inspection and certification) sector, the TUV Rheinland Group provides cross-industry products and services. As a result, it is largely independent of industry-specific trends. This applies to the implementation of statutory tests and inspections. In many business areas, TUV Rheinland is a market leader. Overall, the economic crisis in its principal markets Europe, Asia, and America may be important for TUV Rheinland but is not, the sole determining factor, in view of its industrial and regional diversification.
Though there is an economic turmoil in Europe due to Euro crisis but we are doing well with annual revenue of Euro 1.417 billion in 2011. Almost half of these revenues were received outside Germany. As far as IMEA (India, Middle East and Africa) is concerned, it is growing at a rate of 40% year on year.
Our business in other part of the world such as America, Asia pacific and China are also growing at a consistent rate. These figures show that we are on the path of continuous sustainable development.
How is TUV Rheinland facing the challenges?
In this world of stiff competition our customers no longer simply expect various tests; they want complex solutions. We are therefore accelerating our transformation from a testing service to a provider of solutions. As a result, our work will make our customers more successful in business. As a neutral, critical authority in globalized markets where the range of products keeps getting bigger and the product life cycles keep getting shorter, we create orientation and trust. You can rely on our word and our judgment!. As a sought-after industrial and scientific partner, we make an essential contribution to the development of innovative answers to the great technological challenges of our time. We are finding a solution! Moreover, as part of society we take responsibility for humankind and the environment that goes far beyond the limits of our company.
With our strong, deep rooted ideology and 140 years of experience in the testing, training, inspection and certification we successfully overcome the challenges offered by the Industry.
What do you see as the present trends in the industry?
TUV Rheinland maintains its market leadership in the number of CB certificates issued for electronic consumer products in 2011. The Products Business Stream is in an excellent position for current market trends such as testing 3-D screens, LED systems, wireless technologies, and lithium batteries. Our existing battery-testing labs in Nuremberg and Yokohama were replaced by state-of-the-art labs that test energy storage systems for electric bicycles, household appliances, tools, and electric vehicles.
In India we already have Electromagnetic testing lab, photovoltaic lab along with a 10 meter anechoic chamber for products safety testing. The new softlines and products safety lab in Gurgaon is another milestone in our products testing segment.
TUV Rheinland expects two basic trends to arise in future; for one, demand for sustainable products. And two, trend towards demanding more compliance from and sustainable performance by businesses. With the adoption of ISO 26000, organizations and businesses have access to a global guide for systematically managing social responsibility and sustainability on all levels.
Which countries look promising for TUV Rheinland globally? Is India one of them?
We defined our path in our Strategy 2017. Thus, we are working on a focused extension of our presence in global growth regions. Apart from Africa, and South America our most important future markets in Asia will be India and Middle East. Yet in doing so, we will in no way neglect our roots in Germany and in European markets.
As far as India is concerned we have invested heavily in setting up state of the art laboratories and also continue to do so in the future as well.
The testing capacity in Japan will be expanded to take the increased demand in the solar sector. TUV Rheinland was also able to expand its global network by opening new textile and chemical labs in Bangladesh and the United States. In Turkey, a growth market, TUV Rheinland recently invested in a new testing lab.
How is TUV Rheinland India faring in the last few years?
As the figures speak, TUV Rheinland India is doing well with a 35% growth year on year. Though, we have 6 business streams globally but in India only 5 are active (Industrial Services, Products, Mobility, Systems and Training & Consulting). All 5 business streams have performed consistently in the last few years and I strongly believe with our strategy 2017 they will perform better in future.
What do you see as major opportunities for India?
As the Indian exports are growing there is a great opportunity for TUV Rheinland with its worldwide network to participate in a sustainable manner. Apart from exports, India has an emerging & equally growing domestic market and the government is also pushing through various regulatory initiatives that would offer inspection bodies like us an opportunity to provide global quality benchmarks to the Indian industry.
Do you see India as being critical for the group globally?
Our investment in India in setting up state of the art laboratories is clear evidence on how significant and critical India is, for the group globally. We have observed Indian economy from a long time and noticed some quick developments. Indian industries are on par with industries in the west and also quite match the global certification standards. We think and believe that India is ahead of other emerging nations and has a large scope for improvement. This will help our company to grow globally and become a one stop shop solution for all kinds of technical services.
What is your Investment/growth strategy for India?
Since October 2011, TUV Rheinland has been testing electromagnetic compatibility and electrical products' interference resistance. In two years, TUV Rheinland India has established a photovoltaic testing center, several labs for pollutant analysis and materials testing, as well as a chamber for measuring electromagnetic compatibility (EMC).
We have invested Euro14.3 million in India and continue our efforts in doing so. The new softlines and products safety laboratory in Gurgaon is a result of our visionary goal. This means that TUV Rheinland in India has access to state- of the - art lab facilities and can offer manufacturers various solutions for product testing not only for the Indian market, but also for markets around the world.
How do you compare with competitors?
We are one of the leading technical service providers in India. We strive hard to maintain the growth, position and reputation in the market. It is very difficult to answer this question as we have 6 business streams which are further divided into 35 verticals. We have 2500+ services and our market leadership is different for each service.