In talks with states to set up third production unit in India
With increasing focus on health and hygiene across the supply chain, Japanese major Daikin India is looking at bringing its global commercial refrigeration solutions for supermarkets and convenience stores to the country.
Daikin India currently has two factories in Neemrana, Rajasthan. The company has been talking to various states to set up its third manufacturing facility in the country. It is also looking at ramping up exports, as the government has identified air-conditioners as a priority sector to reduce imports,
Kanwaljeet Jawa, CEO & Managing Director of Daikin India, said the company will be aligning its growth agenda and future investments with the government’s phased manufacturing programme. “The penetration of AC in India is just 6-7 percent. Despite the short-term disruptions due to the pandemic, we believe the long-term potential for the AC industry is strong. The government has identified AC as a priority sector to cut down on imports. So, we believe there is a strong opportunity to leverage India as a manufacturing base for domestic demand as well as exports,” he added.
Jawa said the company is in talks with states and awaiting the final details of central and state government policies to finalise the location for the third manufacturing facility. “Many Japanese companies are looking at strengthening their manufacturing bases in India. We want to ramp up exports to countries like Sri Lanka, Bangladesh, Nepal, East Africa and Latin America from India,” he added.
Currently, the Indian AC market is pegged at 6-7 million units annually but is heavily reliant on imports. Companies broadly rely on imports from China and Thailand.
Bounce back in demand
Daikin India is currently running its factories at 25-30 per cent capacity. “It is a challenging situation since we need to navigate the complex and integrated supply chains with MSMEs slowly getting back to business and with the fear among consumers regarding the spread of the pandemic,” Jawa said.
On the impact of the pandemic, Jawa said: “Overall, we estimate a 25-30 percent drop in volumes this year compared to the previous year. However, we may see demand bouncing back in the September-October period.”
Meanwhile, the company sees new opportunities in the commercial refrigeration business in India. “Besides ramping up manufacturing and exports, we also see new opportunities in the commercial refrigeration segment. As focus on health and hygiene grows, we are now seriously thinking about bringing our global commercial refrigeration solutions for supermarkets and convenience stores to India,” he added.-The Hindu Business Line