Daikin to invest 250 cr to expand AC production in India

Daikin to invest 250 cr to expand AC production in India

New Delhi: Japanese air conditioner maker Daikin on Wednesday said it will invest 250 crore to increase AC production and enhance service network in India within a year as it looks to strengthen its position in the country.

“We have decided to put up a new manufacturing line for room air conditioners...We will pump in an investment of 250 crore," Daikin Airconditioning India (DAIPL) managing director Kanwal Jeet Jawa told PTI.

He said out of the 250 crore, 122 crore will be invested for setting up a new line to produce room ACs while the remaining will be utilised in strengthening their service centres and distribution networks.

At present, the company imports room air conditioners for the Indian market, particularly from Thailand.

Jawa said the new manufacturing line will be developed within its existing facility at Neemrana in Rajasthan. The new unit is expected to be operational by July, 2012, and will have a total capacity to make 5 lakh room air conditioners per year.

“We will still be using global sourcing advantage of our supplier base and market knowledge and develop vendors locally. In the new unit, we will customise room conditioners as per the requirement of the local customers," he said.

So far, Daikin has invested 210 crore at its Neemrana plant that is spread over an area of 1,60,000 sq metres.

Besides, the new unit will also house a sub-research centre for customisation of products for the Indian consumers.

The company, which has been primarily present in the high-end and commercial segment, had entered into the mass market segment last year.

In the mass market segment, the Indian air conditioner market is currently dominated by firms like LG, Samsung, Videocon and Panasonic.

“The split AC segment (in India) which we operate will be around 3.3 million units this year. We have a share of less than 5%. Our target this year is to double our share to 10-11% within this year," he said.

As part of the plan to sustain the growth momentum in India, Daikin has earlier said it will focus on the volume segment by bringing in more products and enhancing its distribution networks.

The company has recently also moved into tier-II and tier-III cities, enhancing its distribution network across the country. It currently has 760 outlets. It also has 50 Daikin solution plazas or exclusive brand shops. The firm plans to take the number to 200 by 2013.