Air-conditioning and refrigeration major Blue Star Ltd said it has restructured its manufacturing operations, closing two of its old units, while it gears up to finalise the setting up of a greenfield manufacturing facility by October.

The company, which had seven manufacturing facilities, earlier this year shut down units at Thane and Bharuch as they had become old and unviable after offering the workmen a Voluntary Retirement Scheme.

“This is part of the effort to rationalise manufacturing capacity while we seek to set up a new one in the South, which accounts for 55 per cent of total volumes. A new plant in the South would be ideal as it would bring down logistics costs by 6-7 per cent,” B Thiagarajan, Executive Director, President, Blue Star said.

Speaking after the introduction of new generation Inverter AC System here today, Thiagarajan said the company expects to finalise by October the location for the new manufacturing facility, which would come up at an investment of Rs 150 crore. “We had zeroed in on the Sri City facility about two years ago, but due to bifurcation concerns had put it off. The company was also hoping for clarity from the Centre on the roll-out of GST and special status to AP. This would have expedited our decision,” he said.

However, the company has also been offered land and other benefits from the Telangana Industries Department. “We are yet to take a decision on the final location. It would be taken before October,” he said.

Blue Star has appointed consultancy firm KPMG to help finalise the location. Tax sops, if special status is granted, could make a big difference, CP Mukundan Menon, Executive Vice-President, said.

The company closed the last fiscal with a turnover of Rs 3,081 crore in a market estimated to be about Rs 15,000 crore. “Though the market has been subdued so far this year, we expect to register double-digit growth, though our aim is to achieve growth of 15 per cent,” the ED said.

The new air-conditioning systems developed and designed in-house by its R&D teams are sophisticated and intelligent and provide higher cooling. These products would be rolled out of the company’s Dadar facility, the ED said.

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