The Hindu Business Line : Energy conservation drives Danfoss biz

Chennai, May 1 In a way, the rise in energy costs is good for Danfoss Industries, part of the Denmark-based group of the same name which manufactures drive controllers for motors. Energy conservation plays a vital role in getting consumption under control and here is where, says Danfoss, the company’s role comes in.

“About a third of total power generated in the country is consumed by industrial establishments and pumps and the potential to conserve energy is estimated at 15-20 per cent,” says Mr K. Hariharan, Director and President, Danfoss Industries.

In India, Danfoss is into two streams of business — air conditioning and motion controls. Under ‘motion controls’, the company offers solutions for motors to optimise efficiency by providing frequency converters based on the torque demand characteristics. This helps the user to save on operational cost.

“Danfoss Group perceives India to be one of the fast growing and promising markets. The key drivers are industrialisation, growth in agriculture, demand for electricity, clean water and use of natural refrigerant due to issues related to climate change,” Mr Hariharan told Business Line.

He said that the company would target large contractors involved in construction and maintenance of airports, cement plants, effluent treatment plants and such projects.

In this 10th year of operations in India, “The headquarters is currently working on a business strategy to evolve a roadmap for DIPL to move ahead, after its 10-year presence in India, he said. The blueprint will be ready before the year end,” he said.

The company has been growing at 35 per cent CAGR for the last four years. In 2007, it achieved a turnover of Rs 200 crore, which is expected to rise five-fold by 2011.

The recent commissioning of a new plant to manufacture a series of pressure controls for refrigeration and air-conditioning applications will be a substantial help in achieving this.

As part of its group strategy to leverage cost arbitrage of emerging nations, Danfoss has begun sourcing components from India for its global operations. It sourced about seven different components amounting to €1 million last year.

“This will only increase substantially in the years to come due to quality of components and the capability of the local supply base,” Mr Hariharan said. Besides, the group is also looking at sourcing design and engineering services from India.