Daikin bets big on India, sees 4-fold rise in turnover

Daikin Airconditioning, the Indian arm of Japanese AC major Daikin Industries, has made India its top priority market and projected a four-fold jump in sales turnover within the next five years. While the company declined to share figures, sources said it may cross R3,000-3,500 crore in turnover in the next five years if it has to attain a leadership position.

Daikin Airconditioning India also aims to be placed among the top three firms in its category of operations, which includes room air-conditioning, chillers, and variable refrigerant volume ACs.

?We have to command at least 15-20% of the market share in each of our categories. We are not here to become fourth, fifth or sixth player. India is our main focus,? Toshio Nakano, chairman Daikin Industries (Thailand) told FE.

Currently, Daikin India commands around 7% market share with a turnover of around R800 crore. In order to be placed among the top three players in each of its categories, Daikin will have to dislodge the likes of Voltas, Samsung, Bluestar and Carrier, among others, which is an uphill task, according to industry experts.

However, in order to achieve a four-fold jump in its turnover within next 60 months, Daikin will soon undertake expansion of its existing 40 acre manufacturing plant in Neemrana, Rajasthan and double the number of workers to 300 within the year. ?Currently, we are utilising only 18-20 acres of our land. Expansion will be done on the balance area and funding will not be an issue,? Kanwal Jeet Jawa, managing director, Daikin India said.

While the company refused to divulge either its sales targets or the funding plans, industry sources said that in order to expand, Daikin may require investments of R250-300 crore. It has already invested R210 crore in the acquisition and setting up of its existing plans and R&D centre. It will add more manufacturing units and R&D centres for producing India-centric products across its categories.

According to Jawa, the penetration of room AC is 3% of the overall market and therefore the potential for expansion in immense.