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Denmark-based electrical and electronic components maker Danfoss A/S, which has invested $100 million to set up a plant in Oragadam, near Chennai, says the timing of its investment is “very appropriate”.
With a new Government at the Centre, the mood is changing and “the optimism in India gives us the appetite for more investments there. That is where we have the platform with a new site and increased R&D and engineering capability,” said Niels B Christiansen, President & CEO, Danfoss.
“If things play out right, we have a good story in India,” he told reporters at the company’s headquarters in Nordborg.
Danfoss, a family-owned company in business for over eight decades, sees India as a hub for Asia-Pacific.
Its products cater to the heating and cooling systems for industrial, commercial and residential applications.
It also makes hydraulic systems for a wide range of applications at its factory in Pune.
Increasing urbanisation, investments in cold chain infrastructure for agriculture produce and processed foods, mechanisation in agriculture will all drive demand for Danfoss’ products, said Christiansen.
After consolidating in China where growth is tapering off, the company sees India and the US as ‘high growth’ markets. Europe presents limited avenues for growth for now.
In India, investments in cold chain infrastructure are particularly interesting, including transportation and container cooling.
Over the next five years, increased mechanisation and automation in agriculture will see tractors and harvesting equipment becoming more advanced. “We have a hydraulics factory in India and this will take off,” he said.
While the first priority is the opportunity in India, some of the pan-Asia Pacific activity will be out of India because of the engineering and production capability.
India will increasingly cater to the region as we move into traditional volume production. “That’s how it happened in China and we will repeat it,” he said.
(The writer was in Danfoss headquarters in Nordborg at the invitation of the company.)
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