Blue Star consolidating manufacturing ops to bring down costs

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Chennai | Updated: June 20, 2015 1:18:15 AM

Blue Star is consolidating its manufacturing operations, for which it has roped in research firm KPMG.

Air-conditioning and commercial refrigeration major Blue Star is consolidating  its manufacturing operations, for which it has roped in research firm KPMG. Acoording to the consolidation plan that began in March, operations at the six existing manufacturing units will be streamlined to cut costs, especially on the logistics front.

B Thiagarajan, executive director & president, air-conditioning and refrigeration products business, Blue Star, said: “We are consolidating our manufacturing facilities and the production of components, VsRF (variable refrigerant flow systems, chillers will be centralised. Manufacturing of room air-conditioners may not get centralised. KPMG is doing that exercise for us”, he said.

Speaking on the sidelines of the launch of next-generation inverter VRF air-conditioning system on Friday, Thiagarajan said the company was spending about Rs 150 crore annually on transportation and logistics alone.  “I expect costs to come down after the consolidation exercise,” he said. Explaining the rationale behind the process, he said that instead of making different parts in different locations, the company would want to have centralised system.

The company has closed its Baruch plant as it was not keeping pace with the the industry’s advancements, he said.

The company was also planning a new manufacturing unit in one of the southern states.  It is in talks with Tamil Nadu, Andhra, Telengana and Karnataka and looking at Andhra Pradesh (Sri City), Tamil Nadu (Oragadam) and Karnataka (Bangalore, Tumkur).

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