Air-conditioning products manufacturer Blue Star Ltd will take a call proceeding with its proposed manufacturing plants in Jammu and Andhra Pradesh by November.
The company is currently studying the benefits assured by the Centre under the Good and Services Tax regime for the plant in Jammu. The company had invested ₹20 crore for the land purchase there.
Speaking to media at the launch of its water purifier range in Chennai, B Thiagarajan, Joint Managing Director, said the company is re-evaluating the plan since it is unsure if it is worthwhile to proceed.
The company had planned to invest ₹120 crore in its first phase for to produce air-conditioners. However, it was put on hold due to lack of clarity over the benefits the State would offer under the new tax regime. Additionally, the manufacturing equipment cost has gone up in the recent times. “The investment makes sense only when the GST benefits are fully available,” he added.
Similar investment of ₹120 crore was planned in Sri City, where the company had acquired land. Thiagarajan said, “We will have come to a decision by November about plants in Jammu and Sri City.”
CP Mukundan Menon, President, Sales and Marketing, Product Business, said while the room AC segment is a major revenue generator, the company is seeing significant business from commercial ACs in the last two-three years. “This is driven by rise in co-working spaces and banquet halls in the tier III, IV and V towns,” he added.