India is one of the world’s fastest growing air conditioning markets that has a low penetration of barely 5 percent and is poised for an explosion in air conditioning demand. The HVAC industry has the potential to grow two to three times of its current base in the next 7 to 8 years alone. This will not only put excessive strain on our power infra requiring as many as 300 new electric power plants but it will also lead to billions of tons of carbon pollution notwithstanding issues related to ozone depletion and global warming.
In order to combat such environmental challenges, manufacturers are beginning to develop green and efficient technologies with focus on environmental sustainability.
On the technology front, the industry will continue to be driven by inverter-based smart products for energy efficiency, usage versatility, and reliability. Advancement in precision and control mechanism will lead to better comfort, ease of operation, installation, and effortless maintenance of the system throughout its functional life.
Climate control and building management systems with advanced minimal analytics capability will soon become integral parts of IoT and digital centralization wherein all HVAC equipment will be interconnected and will also interact with each other seamlessly.
Increased consumption in large infra projects and developer driven residential apartment projects in particular have resulted in a sudden rise in demand for HVAC solutions in this space. With a consistent narrowing of the price gap, there is a clear shift in demand from split room air conditioners and duct AC systems, which were the preferred choice in the recent past, toward a basic VRF system meeting minimalistic air-conditioning objectives.
As a result, there is a tendency among domestic manufacturers and other players to bring products and solutions to meet value-based demands from low-cost bulk suppliers leading to clutter in this price conscious segment. This has created a void in both premium and mass premium segments. We see this as an opportunity for us to address the need of uncompromising and discerning consumers who will not mind paying a premium for HVAC solutions that deliver true comfort and ease of ownership for the entire useful life of the product.
On Vestar’s performance in 2017-18 in commercial air conditioning units
Vestar has just begun its operations in the commercial HVAC space. We plan to quickly put a basic organizational structure in place with a network of capable HVAC solution providers in all major towns across the country to address the growing demands of customized HVAC solutions in the general premium space.
On advertising, promotions, distribution, and network expansion strategies
To continue to evolve HVAC technology solutions, we need a great deal of consumer insights and closer communication with target consumers. Our major thrust initially will be on communication through conferences, seminars, and one-on-one interactions with opinion leaders, influencers, and industry specialists including HVAC solution providers, HVAC and project management consultants, architects and designers, and infra project engineers to effectively educate buyers and end users.
We will be very selective in choosing our channel partners as quality and capability of HVAC solution providers is the key to success in this industry. Though we will go aggressive and quickly ramp up appointment of channel partners in all major cities, we plan to integrate only top 10 percent of the partners in terms of infra and project handling capabilities from the industry. There will be special emphasis on B-class/tier-II cities as these cities have shown higher growth potential with growing disposable household income and aspiration to go beyond owning conventional air-conditioning products.
Apart from rapid industrialization all major cities are either planning to or are soon going to launch their own metro rail projects. Improved road connectivity, new airports and SEZ launches, among other major infra projects, will strengthen economic activities and are going to drive growth for years to come.
On plans to improve upon higher energy efficiency in commercial cooling
Close to two decades, we as a group, have gained an enviable reputation by offering the most advanced and state-of-the-art air conditioning system in the Indian HVAC industry.
With Vestar we have raised the bar further by introducing features that are unique and India-specific in terms of comfort, ease of maintenance, efficiency, and reliability in hot and humid conditions. VIP mode operations and preconceived controls will ensure continuation of critical operations even under partial breakdown/shutdown.
Introduction of cutting-edge technology and processes like EVI (Enhanced Vapor Injection) scroll compressors and unique G-type heat exchangers in Vestar VRF systems will lead to high energy efficiency. Smart, self-cleaning outdoor units will enhance reliability and improve efficiency by reducing the power consumed by the entire system.
With the increasing demand for inverter splits in premium residential apartments and mid to small offices and commercial establishments we plan on offering more options in indoor units to match various styles of décor and energy-efficient inverter- based outdoor units capable of handling multiple indoor units with one single unit.
On manufacturing plans for HVAC units
We plan to garner 7 to 8 percent market share by 2019-20. Initially, we will continue to depend on 100 percent imports till we reach critical volumes. Improvement in local infrastructure conducive for manufacturing high-technology HVAC products and availability of quality resources locally will also be factors to consider local production through partnership with technology partners in the future.