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Blue Star plans to cut down import content in air-conditioners to survive trade barriers and rising cost of imports.
Approximately 30 per cent of components in Blue Star ACs are now imported, down from 40 per cent a year ago. The plan is to further reduce imported components.
Compressors, the most valuable component in ACs, however, will continue to be imported. “Local sourcing compressors can also be explored once the ecosystem picks up,” B Thiagarajan, Joint Managing Director, Blue Star, told BusinessLin e. Thiagarajan said the rising trade barriers are a deterant to import dependence. As a part of the de-risking strategy, the company plans to reduce the import content in ACs. The company reduced import of plastic components for indoor cases, inverter drives, and so on. The aim was to replace the import of components like remote cases and PCBs in the days to come.
It is also spending on R&D to improve indigenisation of its offerings, primarily across ACs and water purifiers.
Thiagrajan was in the city to launch the company’s new range of water purifiers targeting the mass, mid-premium and premium segments.
Water Purifiers
Although room ACs, commercial cooling solutions and projects, and refrigeration solutions, account for a chunk of its ₹ 4750-crore revenues, Blue Star is now focussing on its new vertical which includes water purifier. The company follows the managed contract manufacturing model in the segment.
Water purifiers accounted for just ₹50 crore of its topline in FY18 (the first year of operations for the vertical) with ₹100 crore being the target revenue this fiscal (FY19). In three years, the segment is likely to be a Rs 500 crore vertical for Blue Star.
The company is also increasing its international footprint. It already has entered West Asian countries like UAE, Oman and Saudi Arabia, and, North African nations like Egypt. It is also exploring sales in Asian nations like Bangladesh and Philippines.
“Earlier we would be selling only on inquiry basis across West Asian countries. But, over the last three years we started putting in our distribution and seller network there,” the Joint MD said.
According to Thiagrajan, the company may explore assembling units in Egypt and Bangladesh to comply with local laws.
In India, it will invest ₹220 crore as cap-ex to set up two new AC manufacturing plans — one each in Andhra Pradesh (Sri City) and another in Maharastra (Wada).
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