Chinese consumer durables firm Midea aims to manufacture its products locally in the country by next year and is setting up a new facility in Pune at an investment of Rs 13.50 billion.
"India is a strategic growth market and we expect our investments in this market to yield good growth. Considering the potential of the market we have committed over Rs 1,350 crore investment for a new facility," Krishan Sachdev, managing director of Carrier Midea India and also Midea Group India region, told PTI.
"We have a manufacturing facility at Bawal in Haryana and we are strengthening our base here with a second plant in Pune. By next year, 100 percent of our products shall be manufactured locally," he added.
He further said that the company is evaluating prospects of exports from India.
The new facility near Pune, with a technology park, will have three manufacturing units for home appliances, HVAC products and compressors and will also include a manufacturing facility for Carrier Midea India, a 60:40 joint venture between Midea and Carrier.
The complex is likely to begin commercial operations at the beginning of 2020 and the technology park is expected to generate employment opportunities for over 2,000 people, both directly and indirectly.
Over a period of five years, the facility will produce refrigerators, room ACs, washing machines, water purifiers, water heaters, commercial ACs and compressors.
The company, which has been growing at a CAGR of 25 per cent over the last five years, said plans for manufacturing other home appliances categories in a phased manner have been completed.
Sachdev further said the rupee depreciation has had an impact on their business.
"Even though we manufacture 70-80 per cent locally, production cost has gone up because some of the components are imported," he said.
The company is expecting a good festive season this year with 25 per cent growth and by next year it plans to have IoT enabled product solutions for this market.
South and East are the leading markets for the company, contributing significantly to the business, while non-metros contribute 30-40 per cent of the overall revenue.
Midea India plans to double its footprint across the country.
"For the RAC, which is the refrigeration and air conditioning category, and which contributes 80 per cent of revenues), we are targeting to be in around 5,000 retail outlets before next summer apart from 800 plus sales and service dealers.
We are constantly looking to expand our reach to consumers. We are already present in more than 400 cities and towns of India," he said.