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Blue Star Plans Rs. 185 Crore Spend On Sales Push, R&D

Blue Star is planning an investment of Rs. 185 crore in the next fiscal as the air-conditioning major prepares to take advantage of demand revival.

The company, which is celebrating its 75th anniversary, will invest the money in manufacturing, research and development and advertising and communication.

It is hopeful of achieving better growth and margins on the back of easing commodity prices, stable exchange rates and better inventory level besides favorable demand outlook in the upcoming summer season.

The company hopes to increase its share in room AC market to 13.5 percent during the next fiscal from 12.8 percent now. Blue Star has introduced 75 new air conditioner models. The range includes a variety of inverter ACs with a promise of 30 percent extra cooling and significant power savings.

It will also increase the number of exclusive brand stores to 250 by the end of next fiscal from 200 now. The company will also boost its advertising and brand spend to Rs. 55 crore in the upcoming summer season from Rs. 45 crore in FY19.

Sri City unit delayed

The company has, however, deferred its greenfield unit plan at Sri City and will spend the money next fiscal in existing units due to a slump in demand in recent months.

“For the current volumes, we can still manage with the existing units and we will be investing about Rs. 80 crore in modernization and automation across the existing factories. So, the Sri City project will have to wait till FY21,” said B Thiagarajan, Joint Managing Director, Blue Star Ltd, said here.

Thiagarajan said the company will increase R&D investment to Rs. 50 crore in FY20 as against Rs. 40 crore this fiscal.―The Hindu Business Line

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