Air conditioning and commercial refrigeration-maker Blue Star is looking at import substitution as it looks to counter probable trade barriers and rising currency volatility.
The plan is to bring down the percentage of imported components for its air conditioners to about 30 per cent from the current 75-80 per cent.
Focus on indigenisation
According to CP Mukundan Menon, President – Sales & Marketing, Products Business & Corporate Management Representative of the company, the components that are brought in include compressors, electronic drivers and indoor unit (for split ACs).
As of now, the company has started making the indoor units at its Himachal Pradesh unit.
Nearly 250,000 indoor units are to be produced in India this year.
Blue Star currently has an AC production capacity of 550,000 across two units in Himachal Pradesh.
“We began in-house production of indoor units on a pilot basis last year onwards. This year, 250,000 ACs made from the Himachal units (nearly half the total capacity) will have indoor units that are made indigenously,” he told BuinessLine on the sidelines of the launch of AC models.
According to Menon, the company has also tied up with two Japanese universities to indigenise the electronic drivers (that are used in the outdoor units of split ACs).
It is likely to take shape in the next two years.
The company can look at India-made compressors too once the ecosystem picks up. Currently, compressors are being imported from China.
“Over the next five year or so, imported components in our ACs is likely to be the tune of 30 per cent,” he said.