Blue Star to commence construction work at Sri City plant

: Air-conditioner and commercial refrigeration company Blue Star has decided to go ahead with its plan of setting up a factory in neighbouring Sri City with construction activities set to begin later this year, a top official said today.
The company, as part of expansion plans decided to set up two factories, one in Jammu and the other at Sri City, Tada, Andhra Pradesh, at an investment of Rs 210 crore.
The company had acquired land in both the sites and has been waiting for the rollout of Goods and Service Tax.
"It will not be beneficial for us without GST if we had set up plant in Jammu. But now, Jammu continues to be a question mark for us. We should wait for another couple of months for that State government (Jammu) to present the budget," Blue Star Ltd., Joint Managing Director, B Thiagarajan told reporters here.

He and Vice-President Sales and Marketing (Room Air-conditioners division) C Haridas were here to formally unveil 100 models of air-conditioners coinciding with the oncoming summer season.
Elaborating, Thiagarajan said the company has decided to go ahead with the plant in Sri City.

"Now, we are accelerating our Sri City operations and construction activities. It will get commenced in 12-18 months time," he said.
He said the company had acquired 20 acres of land in Jammu for the factory. "For us, Jammu would have got the CENVAT benefit and Sri City would have got logistics benefit with the presence of Krishnapatnam and Ennore Ports," he said.

On the launch of new range of air-conditioners, he said, the company had set a target of garnering 12.5 per cent market share this year.
"In 2016, our market share was 10.75 per cent. Last year, it was 11.5 per cent. We have set a target of 12.5 per cent market share for 2018. Our overall plan is to reach 15 per cent market share by 2021," he said.
To a query, he said the company had to increase the prices of air conditioners by 4-6 per cent on account of increase in commodity prices like 'copper and steel'.
He said the company had set up investments of about Rs 55 crore for taking up marketing purposes and another Rs 35 crore for research and development.

To a query, Thiagarajan said 36 per cent of sales was contributed from the metros while remaining 64 per cent was from Tier III, IV and V cities.