Daikin is one of the companies that applied for the Production Linked Incentive Program (PLI) for the manufacture of components required for air conditioning, which was recently announced by the government.
The new plant would cover an area of 75 acres, with the potential to create 3,000 jobs, and is expected to start operating from 2023. It will serve domestic and international markets, according to a joint statement from Daikin Air Conditioning India. and businesses. city Sri City.
“With the start-up of the third manufacturing unit in Sri City, Andhra Pradesh, Daikin aims to achieve aggressive growth in the AC export market over the next few years.
“Daikin wants to make India its manufacturing hub to serve markets such as West Asia, Sri Lanka, the Middle East, South America and Africa,” the company said.
According to industry sources, Daikin has so far invested more than Rs 2,000 crore in India to set up its two factories and a research and development (R&D) center in Neemrana, Rajasthan.
The new plant could also attract an investment of between Rs 800 and Rs 1,000 crore from the company for the development of this 75-acre greenfield project.
Daikin aims to achieve aggressive growth of the AC export market over the next few years.
“Sensing a great manufacturing opportunity in India and an endorsement of the Indian government’s ‘Make in India’ vision, Daikin chose Sri City in South India as one of the next hottest destinations to establish. its third manufacturing base, ”the company said in a statement. declaration.
Daikin India President and CEO KJ Jawa said that for the AC segment, as a strategy, the company is focusing more on rapidly growing markets.
“India is the fastest growing market for us. Daikin has a very clear strategic intention to improve its air conditioning, air filtration and refrigeration portfolio, for which India has been identified as a development pole, ”he said.
Jawa added that the company believes India has the potential to become its offshore delivery center for R&D and exports. “We believe it can serve as a regional hub for markets such as South America, the Middle East and Africa.”
According to Jawa, the AC penetration rate in India is currently only 5-6%, and there is huge potential for growth and consumers are looking for energy efficient products with lower total cost of ownership.
“At Daikin, we are seeing faster adoption of air conditioners around the world, which guides us towards making this investment in India,” he added.
Chief Executive Officer of Sri City Founder Ravindra Sannareddy said, “We are pleased to announce that this is the first major investment in Sri City this year, with the potential to create over 3,000 jobs.
Sannareddy added that he reaffirms that Andhra Pradesh, with its competitive incentive policy and investor-friendly business environment, remains at the top of the concerns of investors around the world and in various industries.
The Indian residential air conditioning market is estimated to be around 7.5 million units per year and 9 million in this fiscal year.
Earlier this month, on September 16, the government said 31 companies, including Voltas, Daikin, Panasonic, Hitachi, Blue Star and Havells, had applied to benefit from PLIs for component manufacturing, offering an investment of approximately Rs 4,995 crore.
The selection of candidates will be made within 60 days of the closing date of the application window or no later than November 15, the Department for the Promotion of Industry and Domestic Trade (DPIIT) said.
The PLI program for white goods (air conditioners and LED lamps) is expected to increase domestic added value in the manufacturing process by 25% to 75% by 2026.