Finnish elevator and escalator major, 8. 6 billion euros revenue Kone Corporation will be setting up a new production facility in Tamil Nadu's Sriperumbudur and shift there the operations of its existing facility in Ambattur, said a top company official.
Declining to share the investment to be made in the new facility, President and CEO Henrik Ehrnrooth told reporters here: "The new facility will be ready by 2018.
We will be shifting our operations in the existing facility to the new factory. "
The new facility will come up on 18. 8 acre land while current plant at Ambattur is located on an 8. 8 acre plot.
Ehrnrooth said at 50, 000 units per annum, Indian elevator and escalator market is the second largest market in the world after China, but while the Chinese market for new equipments is degrowing, the Indian market is growing.
However he said launching a low priced product in India as the company had done in China with its Z - Mini model depends on the growth of affordable housing market where the building specifications are standardised.
"The volumes are high in China and there is standardisation in elevator specifications.
Otherwise elevators are largely custom built as per the specifications given by the builders, " he added.
Ehrnrooth said the Indian operations accounts for nearly five per cent of Kone Corporation's global business.
According to him, bulk of the market for the elevators is in the residential segment.
Queried about the demand for elevators from those who are building bunglows in India, the company's Executive Vice President and Area Director Asia Pacific Neeraj Sharma said the market is small but is growing.
"From being considered as a luxury elevator is now considered as a necessity, " he added.
According to Sharma, Kone Corporation in India is also into the freight and scenic (glass capsule) elevator segments.
Ehrnrooth said the increasing urbanisation, reforms in the real estate sector and the smart cities project are going to be the growth drivers for the elevator industry in India.
Speaking about possible acquisitions, he said Kone Corporation is open for it and is on the look for companies that are into the servicing space and not interested in acquiring competitors.
Ehrnrooth said the India Technology Centre here has around 400 employees developing products for the Indian market and also develops software solutions for the global products.
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