Amit Gossain, Managing Director, KONE India

Vertical Mobility - the Growth Story

Today, elevators save more than 90 percent of energy compared to which elevators used 15-20 years ago, says Amit Gossain, Managing Director, KONE India.

What is your perspective on the current Budget?

When you look at it from a real estate perspective it's quite a good move of having affordable housing as a part of infrastructure. With demonetisation, a lot more white money is in the system now, which will make things in the future better. With interest rates coming down, houses becoming more affordable, price correction happening, the real estate industry in the long term will stand to benefit, though there are some short term challenges. Overall the Budget sentiments were in the direction to make sure that both the end users and developers stand to gain whether it is in the affordable, medium or the premium segment.

As you said that the government has initiated with more focus towards the affordable segment. Does your product line fall in place of the affordable segment?

We will have to get it that way; Along with the affordable housing other housing segments will also flourish because of price correction and interest rates. Customers are looking at innovative solutions with good aesthetics. So the elevator and escalator industry should do better.
What are the main challenges that your company is facing presently and how do you look at demontisation?

The industry had some challenges when demonetisation was announced, more from a real estate perspective. Elevators are only a small part of the overall industry. When you look at the challenges that are there in this industry they are more to do with not having lift regulations in some of the states.

At times the end users are not aware whether the elevator AMC has been signed with the OEM or any other third party. If there is no AMC with the OEM or if the AMC has not been renewed, providing the necessary service becomes quite challenging. And if the service contract has been given to a third party, an OEM cannot provide service. I don't think the elevator AMC should be given to a
third party; it should be given to the OEM to make sure safety is not compromised with,Therefore, regulation becomes very important, specification becomes very important, safety becomes very important. While the OEM's make sure that their elevators are safe in all respects, third parties may not experts in this field.

The government is pushing for Make in India, so where are you outsourcing the products from?
Most of our products are manufactured in our factory in Chennai. There could be certain high end or highly customised products, which are imported either from our factory in China or in Finland that we get for some of the major projects, but primarily our factory is geared up very well; we have got a good capacity in India. We also have the technology center in Chennai, which helps us in developing products that the Indian market needs.

How do you address this issue for the unorganized sector?

The companies that have the right technologies have the right mindset for safety and quality: whether they are small or large, it doesn't matter. They should be given equal opportunity. Businesses are there to make money but it is important that technology, quality and safety are never compromised with and the unorganized segment may not be in line with all of the above parameters.

Do you see a change compared to your plant in China, in Finland and in India; what is the major difference that you find between these markets and which are the markets to which you cater from India?

China and Europe manufacture products for their kind of market which could be different from the Indian needs. The specs and standards could be different too. And our Indian factory caters to our market requirements, but follows all the global processes with respect to safety norms, product designs and quality.

We design some of our aesthetics like colors, patterns, material etc. to appeal to the India market. Our recent product launch incorporated the concept of the 5 elements inspired from Vastu in the aesthetics. Some Indian colors are distinctly different from some of the global designs. Hence we try and make sure that those colors are there in India and people feel comfortable and can relate to the same. Vandal proof finish is common in the country due to the rough usage of the elevators and a lot of customers want that.

What kind of product lining are you planning because something that is smart should also be intelligent and should be self-operating?

KONE is the only elevator company to be featured in top 100 most innovative companies in the world, six times in a row in the Forbes magazine. Innovation is a way of life at KONE and now we are moving into the era of digitalization where it is important to keep reinventing.

When you come to smart cities everything from eco efficiency, sustainability to waste management etc. is being done to make a city self-aking a lot of initiatives towards this.

We invented the gearless elevators 20 years ago. Today our elevators save more than 90 percent of energy compared to those elevators used 15-20 years ago. With our people flow intelligence solutions, we can integrate with smart buildings and provide smooth people flow.

India has the world's second largest elevator and escalator market presently after china with a current market size of 50 thousand units per annum which will increase in 2017. So with more stress on infrastructure, what do you think you can achieve in the coming year?

Our market share in India is about 20 percent. We are the leaders but it's not only about the industry growing and we growing, it's more to do with whether we can meet the needs of our customer. We try and make our customers succeed, that's our endeavor. So while the industry will continue to grow because of urbanization we need to constantly innovate not only in our products but also in our services, to give the best service that the customer is happy and satisfied with.
It's almost 1.5 years since you have taken over this position. In the equipment industry, we do not deal with ambience, you just sell your product, understand all the construction needs and all that. Now you have moved to an altogether different segment. So what encouraged you to take this up and if you could throw some light on your present scenario.

I actually moved from an exciting and interesting company and industry. It was good to lead the Industry Association as the President. There was everything right in that industry but moving to a different industry is always very challenging. Then when you look at elevator industry it's not much different. Like you mentioned it has all the functions of the equipment industry but it's also got aesthetics and ambience as well. Being different is always good but more importantly it was moving to a company like KONE which is one of the most innovative companies in the world. KONE is an organization that really cares for its customers and people. Therefore our slogan that 'We are from KONE, We take care' is very apt and I knew it was an organization that puts into action what it says Our recent tie up with IBM to work on internet of things is a step further to embrace digitalization. I really think this is the right industry and more importantly the right company to work for.

What are the challenges that you faced, presently what do you see and what is your plan three years down the line?

The challenges currently are the lack of proper lift regulations in the industry. So we as an industry need to work together towards those regulations and that's being done by the industry leaders already. The second challenge which we have here is to ensure that we are meeting the needs of the customers on time. The challenges of cultural and regional diversity will always be there in India.

Would you like to share any numbers for last year, current and the next year?

KONE globally, for 2016 as a whole, increased sales by 3.9 per cent at comparable rates, to EUR 8,784 million. Our operating income was driven by positive developments in all businesses, reaching EUR 1,293 million or 14.7 per cent of net sales. In 2016, KONE had annual net sales of EUR 8.8 billion, and at the end of the year close to 52,000 employees. We have also introduced the next phase in our strategy, winning with Customers. This marks the start of a new and inspiring period for KONE.

After you joined in, you were nominated and won the Best Elevator Company award in Construction Times award. So how do you feel about it and what are your plans going forward?
It was great to receive that award from the Minister and Construction Times. It was well recognized and I met a lot of industry friends there. The jury was good and it was a good feeling to receive this award as the Best Elevator Company.

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