Room AC market to double by 2020; Blue Star to add capacity

Company to invest Rs 150 cr in two plants, gets set to launch air-coolers and air-purifiers by April

With the Indian room air-conditioning industry set to double by 2020, players like Blue Star have put plans in place to augment their production capacities by that time. The air-conditioner (AC) maker, which targets a 12 per cent market share of room ACs by FY17, is investing around Rs 150 crore to set up two plants, one in Andhra Pradesh, another in Jammu to add a capacity of one million units of ACs and freezers.

The company, meanwhile, is also readying for its air-coolers range launch in April.

C P Mukundan Menon, executive vice president, airconditioning and refrigeration products sales group, Blue Star Ltd said that the capacity augmentation would be completed by 2020. Blue Star currently has five plants across India, with a combined net installed capacity of 350,000 units of ACs per annum (pa) and about 150,000 units of deep freezers.

Read more from our special coverage on "BLUE STAR"

• Blue Star to invest Rs 215 cr to set up facilities in Andhra and Jammu

Menon said that the two upcoming plants would have a capacity of 500,000 units pa each, of which around 300,000 units pa would be for deep freezers and the remaining for ACs. The room AC market in the country, estimated to be around four million units per year at the moment, is clocking a 15 per cent compounded growth rate. It is estimated to double by 2020, to a size of around 8 million units.

Blue Star, he claimed, is clocking a 12 per cent growth rate, and enjoys a 10 per cent market share (in terms of value) in the room AC segment, and 9.5 per cent in terms of volumes. Inverter ACs, according to Menon, are the fastest growing segment, doubling every year. It currently accounts for nearly 8 per cent of the room-AC market.

Meanwhile, Blue Star, which has recently forayed into the air-cooling segment, plans to launch the products (about four products) by April, under the brand name Windus Air Coolers from Blue Star. The air cooler market is roughly around Rs 2000 crore in India, and is dominated by Gujarat-based Symphony. The AC market, on the other hand, is around Rs 10,500 crore.

Blue Star is also rolling out its air-purifier range, currently a Rs 250 crore market, by April, in its bid to open up newer channels of revenue. While the company would get the air-coolers contract manufactured at Dehradun, it will get its air-purifiers manufactured in China.