A Fortune 500 company, York International will initially bring in $3 million as investment in the holding company. The holding company will in turn invest $250,000 in the fully-owned subsidiary.

The joint venture company will manufacture airconditioning products and equipment while the wholly owned subsidiary of the holding company will provide specialised consultancy, designing, planning, erection and maintenance services for large refrigeration facilities in food processing and chemical processing.

The American company has already obtained clearance from the Foreign Investment Promotion Board (FIPB) for proceeding with its investment plans. According to industry sources, York has identified an Indian partner to set up the joint venture tomanufacture airconditioning products and equipment.

York plans to hold 65 per cent equity in the proposed joint venture. Over a period of time, York proposes to increase its stake in the joint venture.The American company proposes to transfer and utilise in India its state-of-the-art technology, engineering expertise and operation know-how to make the joint venture a low cost producer of high quality products.

York International is the third largest manufacturer of heating, ventilation, airconditioning and refrigeration products in the US. In India, the company is expected to compete directly with established players like Voltas and Blue Star. The company makes airconditioning products ranging from one tonne to approximately 60,000 tonne.

Worldwide, York has three product categories -- commercial airconditioning, residential airconditioning and refrigeration products for food, beverage, chemical and petrochemical processing industries. Sources further said that the investments in India would be routedthrough York's wholly owned subsidiary in Cyprus called YIC Ltd.

Sources added that the company plans to source parts and components locally not only for its use in India but also for its production facilities elsewhere. In addition, it is expected that some parts and components which are currently being imported to India would be domestically procured. In addition, York has drawn up plans to use the Indian operations as a base for exporting not only products made here but also Indian technical expertise and services.

The company has chosen the holding company structure for its operations here as it does not consider putting all activities under one entity a feasible proposal. It felt that the airconditioning and refrigeration businesses had different needs and addressed different markets, and therefore it was advisable to float separate companies to address each segment separately.

It is also believed that York may float more subsidiaries and joint ventures in future for some of its other products.