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Blue Star consolidating manufacturing operations

Air-conditioner manufacturer Blue Star Ltd has undertaken an exercise to consolidate manufacturing operations for which research firm KPMG has been appointed, top company official said.

June 20, 2015 / 01:52 PM IST
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Air-conditioner manufacturer Blue Star Ltd has undertaken an exercise to consolidate manufacturing operations for which research firm KPMG has been appointed, top company official said.

The process of consolidation of existing six manufacturing facilities began in March and would save the company about Rs 30 crore per annum on transportation and logistics, Blue Star Executive Director and President (Air-conditioning and Refrigeration Products Business) B Thiagarajan told reporters. "We are consolidating our manufacturing (facilities).

Manufacturing of components, VRF (variable refrigerant flow) systems, chillers will be centralised. Manufacturing of room air-conditioners may not get centralised.. KPMG is doing that exercise for us...", he said.

Thiagarajan said the company was spending about Rs 150 crore annually in transportation and logistics alone. "I expect that cost will come down by Rs 30 crore after this (consolidation) exercise..," he said. The company was also planning a new manufacturing unit in southern states, he said.

Thiagarajan and senior company officials were here to unveil the first variable refrigerant flow airconditioning system Blue Star VRF IV Plus here targeting the residential and commercial segments.


He claimed the new system can save 50 percent of energy compared to the existing products available in the market, adding that out of the Rs 15,000 crore domestic AC market, six percent comprise VRFs segment.

The official said 60 percent of the product was localised at the company's manufacturing unit in Dadra and Nagar Haveli.

On export business, Thiagarajan said presently the company was making around Rs 200 crore from its overseas market, which comprise the Middle East, North Africa and SAARC countries. It planned to more than double the export turnover by 2018 when the company would celebrate its 75th year. "Exports are around Rs 200 crore out of the Rs 3,000 crore total turnover.

We export our products to Middle East, North Africa, SAARC countries. Our goal is to take export to Rs 500 crore by 2018...", he said. On the status of the new plant which the company was eyeing to establish in southern states, he said, "the investment will be around Rs 150 crore and yet to finalise".

"Basically, we are looking at uninterrupted power. It may come up on outskirts of Bengaluru or Sri City SEZ or Oragadam industrial corridor near Chennai or even in Telangana. Actually, the bifurcation of Andhra Pradesh made us to delay", he said.

The company has been looking at establishing the unit for more than a year. 

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