The Telegraph
Tuesday , February 19 , 2013
Since 1st March, 1999
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Blue Star mulls unit in south

Calcutta, Feb. 18: Air-conditioning and refrigeration company Blue Star Ltd is scouting for locations in south India to set up a manufacturing facility for room ACs at an estimated cost of Rs 150 crore.

Room ACs refer to both the window and split varieties. However, with the gradual phase-out of window ACs, the company’s focus will be on the split version.

The company is also keen on doubling exports turnover within three years from Rs 100 crore. Revenues, which stood at Rs 2,700 crore in 2011-12, are expected to grow 10 per cent by the end of this fiscal.

“We manufacture 2.25 lakh units of room ACs . This year, the number could touch 2.75 lakh units and by 2014, we expect the manufacturing figure for room ACs to touch 3.5 lakh units. By that time our existing facilities will not suffice and we may want to look at having a big plant with a capacity to manufacture 5 lakh units. Investments could be anywhere between Rs 150 crore and Rs 175 crore. We now have two room AC manufacturing plants in Himachal Pradesh,” said B. Thiagarajan, president (air conditioning & refrigeration products group).

He was speaking at the launch of a range of room ACs — to be sold from 2,500 outlets across 500 cities — here today.

Blue Star expects a 15 per cent growth in volume sales and a 6 per cent jump in value terms. The current market size of air conditioners in India is 3.4 million units, which is expected to reach 10 million units by 2015.

The company expects to increase its market share to 9 per cent in 2013-14 from 7.5 per cent. It expects the market for window ACs to decline. “It will exist for the next three years driven by entry-level demand and the replacement market,” he said.

The expansion of the export market for ACs and water coolers is on the cards with a focus on Saarc countries.