Chennai: Denmark-based Danfoss Group, a producer of components for refrigeration and air conditioners, on Tuesday said is planning to invest $100 million to set up a plant near Chennai.
The plant to be established in Oragadam, will be its largest research and development centre.
“We are in talks with the Tamil Nadu government and will shortly sign an agreement to set up a plant in 50 acre at Oragadam. Products from the firm’s new plant are expected to be rolled out in 2014 and will cater both to the Indian and export markets,” said Noel Ryan, president of Danfoss Industries Pvt. Ltd, after inaugurating the Indian subsidiary’s filter-drier plant in Chennai.
The company also plans to increase the number of its employees in the country. “We would be scaling up our employee base (in India) to 2,000, of which 1,000 will be dedicated for research and development in the next two years,” Ryan said.
Currently, the company has 350 employees in India.
“The availability of quality engineering talent and relatively lower costs make India an attractive destination for research and technical centres of global companies,” said Venkat Shankar, investment director at Peepul Capital.
“Significant investments will go into developing products in refrigeration controls, power electronics and commercial compressor division,” Ryan said, adding the company plans to manufacture three products in industrial refrigeration for local production.
The new plant will be an export-oriented unit with a manufacturing capacity of two million pieces a year. It will cater to the Asia-Pacific market, currently handled by Danfoss’s plant in Mexico, and help cut transportation time by six weeks, the company said.
“As the air conditioner business is of a seasonal nature, proximity of the plant to an export region will offer the company the flexibility to ramp up or trim production based on demand,” said Henrik Schurmann, vice president of the company’s refrigeration and air conditioning division in India.