Blue Star targets double-digit market share in room ACs in FY16

Air-conditioning and commercial refrigeration company is eying double digit market share in FY 16. Also, is planning to increase its installed annual capacity for room air conditioners in the next two years. It currently stands at three lakh units per annum and plans for five lakh units per annum.

The company is also setting up its 8th facility in southern part of India in the next 18 months. It is investing Rs 150 crore for this facility. It will have an added capacity to make around half-a-million air conditioners, in addition to freezers and components for backward integration. The new plant is scheduled to to be operational in two years.

"By 2018, we expect nearly half of our air conditioning and refrigeration business to come from room air-conditioners. Currently our market share in room air conditioner segment is nine per cent. We are looking at double digit market share. May be around 11 per cent. Last year the room air-conditioners industry grew by 10 per cent in volume terms and in Blue Star has outperformed the market growing 30 per cent, thereby increasing its market share.The incidental price of power efficient five-star ACs is one of the considerations for low adoption," said B Thiagarajan, Executive Director and President, AC&R Products Business.

Thiagarajan was speaking after launching a new range of air-conditioners in Pune today.

He said , "We are very clear to have our project in the South. Actually, our target to finalise the land is by September. May be we will sign up it by May or June. The company has alloted Rs 35 crore in this regard for new range of air-conditioners for the period 2015-16."

According Thiagarajan to the adoption of ACs in China stands at 50 million with an average penetration rate of 25 per cent, the Indian AC market is limited to just 3.75 million annual sales with a penetration rate of 3 per cent.

Blue Star entered the residential room air conditioner segment in 2011, has seen this segment now contributing to 70 per cent of overall room AC sales. Also, over half of these sales currently come from the non-tier-I towns and cities. The company has alloted Rs 35 crore in this regard for new range of air-conditioners for the period 2015-16.

He added, "For each of the star ratings, the price increases by seven per cent on an average. While the market for room air conditioners is expected to grow by around 15 per cent in FY16, considering our track record of outperforming the market, we hope to achieve growth of 25 per cent and achieve a 10 per cent market share."