Wipro Infrastructure forays into automation solution business

Wipro will offer its automation solutions to companies which are in discrete manufacturing or firms that make individual items or those firms which make cars, airplanes, furniture and smartphones.

 Wipro Infrastructure Engineering, a business division of Wipro Enterprises Ltd, the privately held business by billionaire Azim Premji, has set up a new business division, called automation solutions, under which it will boost productivity of manufacturing companies in India, the Middle East and Africa by making up industrial robots in their facilities.

Wipro Infrastructure Engineering was demerged from parent Wipro Ltd, the listed information technology (IT) outsourcing arm in 2013, and along with Wipro’s consumer care business clubbed under Wipro Enterprises.

Wipro Infrastructure Engineering does not share its financials but is estimated to be a $400 million business division, offering solutions across four areas, including in hydraulic products, aerospace and defence, water treatment and additive manufacturing or 3D printing.

The Bengaluru-based company expects automation solutions to become at least a $100 million business division by March 2020, according to a senior executive.

“Initially, in the next 24 months, we will leverage our strength and offer solutions to tier-I and tier-II auto companies in India and then we will take these solutions to other countries in Asia and Middle East,” said Pratik Kumar, chief executive officer, Wipro Infrastructure Engineering.

Put simply, Wipro Infrastructure Engineering wants to play a role of system integrator by implementing and managing industrial robotics manufacturers like Japanese robot maker Fanuc Corp or a German robot maker Kuka and make these robots work with humans and other non-robotic gear in a factory floor, such as cranes and conveyor belts.

Wipro will offer its automation solutions to companies which are in discrete manufacturing or firms that make individual items or those firms which make cars, airplanes, furniture and smartphones.

Globally, Swiss engineering giant ABB and American conglomerate GE have emerged as large system integrators even though India remains a relatively underpenetrated market.

Wipro estimates that the addressable market for system integrators for automation solutions in discrete manufacturing in India to be a $400-$450 million, which has grown over 17% annually over the last few years.

“The government’s push towards Make In India Initiative, to my mind, will not happen only by setting up new factories or establishments. I believe it will also happen by making existing factories and assets more productive. And we believe with automation tools, manufacturing companies can get 25-30% productivity improvement,” said Kumar, who joined Wipro in 1991.

“Let me say that I’ll be disappointed if we cannot become a $100 million business in this space in the next 18-24 months,” said Kumar.

“Wipro is seeing a massive increase in demand for the production of new age industrial robots for automotive engineering. I see this as a logical move to keep WIN (Wipro Infrastructure Engineering) outside of Wipro mothership, as that company battles the headwinds of very tough competition and price erosion in certain IT services,” said Phil Fersht, chief executive officer (CEO) of US-based HfS Research, an outsourcing-research firm. “But there is a dire need to bring the two areas together in a smart way as tech is proving the real differentiator in the car business—so how Premji managing the cross-pollination of resources and innovations between WIN and traditional Wipro will be critical.”

Kumar, who was the HR head at the IT firm before becoming the CEO of Wipro Infrastructure Engineering in 2014, admits that his firm’s latest foray will work with engineers at the listed IT company.

For now, automation solutions has a team of 20 people and is headed by G. Sundararaman, who before joining Wipro worked at British construction equipment maker JCB and at the two-wheeler brand, Royal Enfield, owned by Eicher Motors Ltd.