Daikin mulls 2nd manufacturing plant in India

The company plans to invest Rs 350 crore to expand its capacity to one million units

Daikin Airconditioning India Private Limited, a wholly-owned subsidiary of Japanese airconditioning systems manufacturer Daikin Industries Limited, is evaluating various locations to set up its second manufacturing facility in India with an investment of Rs 350 crore, according to its managing director Kanwal Jeet Jawa.

"Our task team is currently scouting for suitable locations in western and southern India for our proposed plant. The exercise is expected to be completed pretty soon," he told Business Standard.

Daikin entered India in 2000. Its 100 per cent India subsidiary, floated in 2004, rolled out its first Made-in-India product from its manufacturing unit at Neemrana in Rajasthan in 2010. The Neemrana plant currently churns out 500,000 units of airconditioning systems a year, including 22,000 variable refrigerant volumes (VRVs) and around 1,000 chillers.
 

Jawa said the proposed expansion would double Daikin Airconditioning's manufacturing capacity in India to one million units. The company had recently started exporting to Sri Lanka. Post the setting up of the second facility, it would start exports to Bangladesh, Nepal, South Africa and West Asia, he added.

"At present, close to 90 per cent of our air-conditioners are manufactured locally, while the remaining are imported from Japan and Thailand. Our idea is to completely localise our production ... localisation and supply chain efficiency would make us competitive," he said, adding that the company wanted to "inverterise" the Indian market with R-32, a refrigerant with low global warming potential.

Outlining Daikin's 'Strategic Plan 2020' for India, Jawa said the Indian subsidiary currently contributed Rs 2,600 crore to its parent's global revenues of over $18.5 billion. "We see India as a strong, long-term market. We hope to become a Rs 5,000-crore company in India by 2020," he said.

At present, Daikin commands an 11 per cent share of the Indian airconditioning market. It should be the number one by commanding 20 per cent space of the market by 2020, he added.

Daikin opened two exclusive Solution Plaza outlets in Hyderabad on Monday, taking its exclusive store network across the country to 200. The new outlets would be managed by Hyderabad-based sales and services dealer Sri Comforts.

"Andhra Pradesh and Telangana are key markets for the company. We will continue to expand by opening more Solutions Plazas in the two Telugu-speaking states in due course," Jawa said.