Kolkata: Siemens VAI Metals Technologies, a world leader in technology for the iron and steel industry, will set up a new factory to make steel plant equipment in India. The 2.2-billion global major also hopes to rapidly increase its local headcount to 1,000 people and expand its service base in the country.

Werner Auer , CEO, Siemens VAI Metals Technologies said, "We are growing our base in India where the steel industry is on a growth path. We want to set up our own factory to make steel mill equipment at an investment of around 25 million." "We are looking for land in Bhilai and Vizag for this," he added. When it comes up this will be Siemens VAI's second manufacturing unit, the first of which is located near Mumbai.

To augment its service capability, Siemens VAI also plans to recruit aggressively in India. In the past couple of years, the company has doubled the number of engineers on its rolls to almost 800 people. "Apart from big steel companies we work with, Siemens VAI is increasingly targeting small and emerging ones with an eye to the future. We are expanding our capabilities in India in project management and other service areas. We would thus like to grow to a 1,000-people organisation at the earliest," said Auer.

He and other senior executives of Siemens VAI were in Kolkata recently to address a meet on metals and mining. Post recovery of the world market in 2010, demand has been growing for steel plants and high-quality steel grades. But rising raw material and energy prices and tighter environmental norms are posing new challenges for steel producers.

"Besides new construction business, we are now expecting stronger demand for modernisation and service, following the economic crisis. This will further optimise operating procedures and individual processes in the steelworks," Auer said.

"We will continue to develop our expertise in China, India and Russia in 2011," he said. "We want to strengthen our local presence, press ahead with complex projects and use innovative solutions to further expand our marketshare in the plant modernisation business," he added. At the same time, the time-to-market for new de-velopments will be cut by up to one third. "More than ever before, we'll be manufacturing components for steelworks ourselves and hence, set up new factories in China and India", Mr Auer added. In 2010, Siemens VAI's order intake was nearly 2.6 billion. In the coming years, the company expects an annual market growth with rates in the mid-single digit percentage range.

"Out of this, China and India will drive growth with values of up to 7%," he said. Siemens VAI came into being after the 2006 merger of German major Siemens, and VAI, which stands for Voest Alpine Industrial of Austria . Both companies have a long history of association with India. Developed by VAI, the Linz-Donawitz (LD) process, now a standard oxygen steel-making process, was tried out in Rourkela in 1958.