Chill-out Time

Calcutta, March 14: Daikin Airconditioning India Pvt Ltd, the 100 per cent subsidiary of Japan-based Daikin Industries, plans to more than double its market share to 15 per cent by 2010.

The company, which is building its manufacturing facility in the Neemrana industrial area in Rajasthan with an investment of Rs 140 crore, will commence operations from March next year.

According to Kenichi Yasufuku, general manager (sales planning) of Daikin Airconditioning India, “Window air conditioners will be a thing of the past and will gradually give way to only splits and variable refrigerant volume (VRV) ACs and chillers for buildings and institutions.

“As an air conditioning company, we will be manufacturing VRVs and the chillers at our Neemrana plant. The needs of the Indian AC market will evolve into integrated systems rather than individual units like the window AC,” he said.

The company expects to clock a turnover of $230 million by 2010 from $33.5 million in 2004-05.

Daikin will be operating in the premium AC segment, which has a market share of 50 per cent. The Indian AC market is estimated to be at Rs 4,000 crore, growing at 25 per cent per annum and slated to reach Rs 7,500 crore by 2010.

Of this, 70 per cent will be in the commercial or institutional space and the rest will be retail.

At present, the VRV system comprises just one to two per cent of the total market. “The BPO and the retail boom will contribute significantly to the sales upswing,” said Yasufuku.

The Neemrana plant will have capacity to produce 20,000 VRV units and 1,800 chillers per annum.

Earlier, Daikin used to import equipment from Thailand and Japan and assemble them in India. Around 60 per cent of Daikin India’s imports are from Thailand. Daikin also plans to export to Southwest Asia, West Asia and Africa.

Daikin will set up a research and training centre in the factory premises to improve product quality, installation and after-sales services.

Daikin had entered India through a partnership with the Siddharth Shriram Group. Eventually, it took over the Shriram Group’s manufacturing facilities and services of water cooler and air conditioning businesses and sales and marketing of Usha International’s air conditioning division.