Highly India plans to produce 3 million AC compressors by FY20

Air-conditioner compressor maker Highly Electrical Appliances India today said it is planning to increase its production capacity from two million compressors to three million by FY20.

The company said it is yet to decide if the expansion will be in its current factory in the state or through a greenfield development.

"From the investment point of view, we have doubled our production capacity from one million units to two million by FY17. We have an expansion plan to increase our production capacity from two million units to three million by FY20," said Li Haibin, chairman, Highly Electrical Appliances India.

Sameer Bhargava, director and vice-president of the firm, said, "We are in the process of making a decision to expand a factory or build a new one. That will be depend on how the market grows and needs of our customers."

The company, a joint venture between Japan-based Hitachi and Highly of China, had established its first facility in Sanand town of Ahmedabad district in 2013.

 

"The air-conditioner market grew at 12 per cent CAGR in India last year. Surprising thing is that growth in the inverter air-conditioner segment was 40 per cent last year, against our expectation of 30 per cent," said Bhargava.

"We expect the market to grow at higher rates as the penetration is low," he said, adding if the government extends some support to the sector, it will have a robust growth.

"At present, if we import a finished air-conditioner compressor, the duty is 7.5 per cent, but if Indian manufacturers like us want to import high grade steel as raw material, the import duty is 10 per cent to 12 per cent," he said adding that the cost of imported compressor is cheaper than that manufactured in the country.

He said that they have requested the Centre and the state government to look into such issues.

He further said that the Sanand plant has started export of air-conditioner compressors to west Asia, Malaysia, Vietnam, Egypt, among other countries.