SKF India Limited

Shishir Joshipura, Managing Director

Please give us a brief profile of your company and the businesses it is engaged in.

SKF’s roots in India can be traced back to 1923, when a trading arm of SKF Group was set up in Kolkata. Today, SKF is present in India
by way of 3 different entities – SKF India Limited (the listed entity), Lincoln Helios India Ltd (In 2010, SKF acquired Lincoln Group
which is represented in India), and SKF Technologies Pvt Ltd, which is a SKF Group subsidiary. SKF inaugurated state-of-the-art
Global Technical Centre India (GTCI) in Bangalore in December 2011, reinforcing its group strategy to bring technology development
closer to customers, locally. Over the years we have invested for long term growth and grown from 2 manufacturing plants in
the 90s to 6 manufacturing plants today. Together between the three entities, SKF in India has six state-of-the-art manufacturing
facilities and a supplier network of over 300 distributors across the country, SKF serves the fast-growing Indian market with high
quality products and solutions. Our manufacturing footprint is spread evenly covering the entire country to serve the small and
large size bearings, seals, housings, lubrication systems for virtually all automotive and industrial applications. SKF’s products and
services range across 5 platforms, namely: Bearings and Units, Seals, Lubrication Systems, Mechatronics and Services, and cater
to over 40 industry segments. To make full global resources of SKF accessible to our customers, we have created SKF Solution
factories which bring people, services and technologies together to deliver custom solutions. The services at SKF solution factory
range from engineering consultancy for original equipment manufacturers to bearing remanufacturing and cloud-based remote
monitoring and diagnostics. SKF‘s Global technical center in India that was set up in 2011 drives innovation by closely working with
the Engineering Research and development Centre in Europe to developing, testing and validating of products for global as well
as local markets. GTCI works in area of product engineering, development & testing, finite element analysis and simulation tool
development. It is equipped with advanced metallurgy and chemistry laboratory, product investigation, mechatronics, condition
monitoring and lubrication systems laboratories.

What opportunities do you see for your sector in the next five years? How is your company planning to tap those opportunities?

The Indian economy is the bright spot in the global landscape, becoming one of the fastest-growing big emerging market economies
in the world. 2015 is a window of opportunity for structural reforms that can benefit growth in the entire region over the next
several years. In India, the momentum of growth is expected to increase driven by reforms paving the way for higher public
spending that will result in increased manufacturing and industrial activities. The government has shown positive intent on this
front by providing a roadmap for GST, giving greater control to the states and making them a stakeholder for pushing the economic
growth. The government is creating a conducive environment that supports businesses by reducing bureaucracy and increasing
the ease of processes for business. This policy will further strengthen India’s capability in manufacturing, while giving the economy
a major push. Another key driver for growth of manufacturing sector is expected to come from the government’s push towards
spending in infrastructure and defence sectors, which was stagnant for the past few years. Modernization of existing railway sector
and newer long term projects such as freight and high speed corridors is likely to foster growth in the segment and allied industries.
In addition, the government’s conscious push for the policy of “Make in India”, manufacturers across segments and industries are
being encouraged to manufacture more in the country. India’s pace of urbanization is one of the fastest and that is likely to get
a push with the current government’s push towards creating smart cities. We also expect a rising demand in collateral industries
with creation of new cities, like transport, construction, PWD among others. This in turn will boost manufacturing of equipment
for construction, infrastructure and transport, thus creating opportunities of growth for these industries. SKF is well-poised to reap
the benefits of uptrend in manufacturing sector as well as increased government spending on key infrastructure projects. With its
diverse range of products, its proven leadership in providing continued higher-value to customers, the market leadership of SKF
brand, and its wide reach and presence, SKF is prepared to contribute positively to the growth and progress of the industry.

Which are the most significant and UNIQUE capabilities and opportunities that our nation has, which we could leverage in our
journey towards a USD 20 trillion economy? How can we capitalize on such opportunities?

Owing to the demographic dividend which will continue to drive demand from across industries and manufacturing industry will
be the key driver to cater to this demand, the long term prospects for Indian economy remains bright. In the short term, with
the revival of confidence coupled with positive signals towards reforms by the government, the country and the industry is well
poised to gain. The burgeoning middle class in the country requires adequate infrastructure to be developed for living, and this
itself presents a major opportunity for the economy, as urbanization brings with it a host of collateral industries like transport,
construction, power among others. SKF is well-placed to capitalize on these positive industry developments with its wide range of
industry specific solutions across product and service platforms including preventive maintenance, condition monitoring, decision
support system and performance-based systems.
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How, in your opinion, will the ‘Make in India’ campaign provide a thrust to economic growth?

The government’s call for ‘Make in India’ has sent out positive cues to the global manufacturing community. This augurs well
for the domestic manufacturing sector and will aid economic activities in the country. Along with this, focused roadmap of ease
of doing business and policy reforms will create conducive investment climate which is likely to fuel growth. With the recent
’high on governance’ Union Budget, the government has moved away from sectoral SOPs completely and has focused on critical
macro points such as transparency, ease of doing business and social welfare. Steps taken towards creating a transparent model
of governance and project clearances, setting a direction for GAAR is a clear and positive message to the investors towards ease of
doing business. The roadmap for reducing corporate tax gradually is a welcome move that will drive investments. Infrastructure, an
important sector has also got a positive impetus. Focused spending on future growth projects is likely to pave way for a sustainable
demand led recovery.

Which are the most crucial economic policy initiatives that the Government should consider in order to place the economy on a
sustainable growth trajectory over mid-long term?

The immediate steps taken by the government in an effort to revive the infrastructure segment resonated well with the sentiments.
However, the ground realities from a macro perspective have to change in order to see a sustainable demand led recovery. We
continue to see some positive signs with the increased investment in the infrastructure sector by the government. Policies should
focus on creating demand by speeding up infrastructure projects and clearance of long pending projects. In the commercial vehicles
segment, heavy commercial vehicle (HCV) demand relies on the growth in the core sectors such as mining, steel and cement
and infrastructure which are subdued and require favorable policy reforms. It is important that inflation is kept under rational
control, as increased inflation increases the cost of living in general, and also affects peripherals like transportation, raw material
and average spend by people. A controlled inflation ensures the economies keeps moving ahead with money coming in through
both investments by businesses, and spend by consumers. India has been perceived as a country which has a mix of skilled and
unskilled workforce. The focus has to now shift towards a greater workforce of skilled workers. This enables multi -disciplinary
businesses to set base in the country as they get skilled workers for operations. Skill enhancement also helps people to have better
job opportunities, resulting in better incomes thus enabling greater spends. The ‘Make in India’ initiative has had a positive impact
on global manufacturers. This will boost confidence of global investors and act as a catalyst for overall growth of the industry. A
focused approach to create investment favorable policies will further boost the program and thus bringing the “Make In India”
initiative to its intended conclusion.

Which are the most important changes that India’s leading corporates need to make today, in order to be effective contributors
to the process of country’s economic and social development?

Sustainable development is key to this process. Sustainable development here refers not only to environment sustainability but
beyond that. It means more conscious effort towards doing business, creating the right working environment for people, driving
a meaningful change in the lives of adjoining communities and of course caring for the environment wherever they operate in.
Businesses all around us are today driving these pivotal issues in some form or the other but in order to succeed, we believe need a
greater impetus from all around and to ensure that all of these elements are driven in the same spirit. This will enable a sustainable
growth towards all the critical stakeholders of an organization. Another critical area is skill development and enhancement. The
Indian manufacturing ecosystem is developing and evolving at a rapid pace. Bridging the skill gap is pivotal for any growing economy.
Manufacturing companies across sectors in India are on a constant look out for industry ready skilled labour. To keep up pace with
technology, companies are upgrading themselves by introducing technologically advanced automated systems which effectively
means that there is a strong demand for people with enhanced skill. It is critical for corporates to provide employees with a
platform to upgrade skills through vocational and technical training.

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