The Indian HVAC market is segmented by different product types like air handling equipments, heating equipments, cooling equipments along with air treatment, air filtration and de-dusting market segments,.

Aug 1 2014 | Q&A

The Indian HVAC market is segmented by different product....

"Today the need is to have streamlined policies, rationalization of excise structure, favourable incentives to domestic manufacturers, encouraging usage of technological innovations, creation of domestic research & development hub and a positive export support. Also the government has to build positive policies pertaining to import & export duty structure and should also outline India-centric FTA agreements attuned to create more empowerment of the economy."

Kanwal Jeet Jawa, Managing Director, Daikin Airconditioning India Pvt Ltd shares his views with Sandeep Sharma about his company, manufacturing base, product offerings, business achieved in the previous year, client acquisition, profitability, HVAC industry, technological trends and lastly what needs to be done by the Government of India to boost economic growth. Edited Excerpts...

Could you tell us about your company, manufacturing base, product offerings and core competencies?
Daikin Airconditioning India Pvt Ltd (DAIPL) is a 100% subsidiary of Daikin Industries Ltd., Japan, a global leader in the manufacturing of commercial-use and residential air conditioning systems. Backed by the superior technology, the organization offers a wide range of energy efficient air conditioning solutions to the Indian customers.

Entering the Indian air-conditioning market in 2002 in a joint venture with Usha Shriram Group, Daikin has in just over a decade become the No. 2 HVAC brand in the country with nearly 13% hold on the Indian market. Not just big corporate sales, Daikin has been able to establish itself as a massbrand over the years. Daikin India, from being a Rs 440 crore company in FY2009-10 has risen upto become a Rs 2,200 crore establishment by the closure of FY2013-14.

Daikin India’s wide-spread dealer and sales network includes 11 Branch Offices (Sales & Service), 15 Sales Offices, 4 Mother Warehouses, 17 Supporting Warehouses, 100 Daikin Solution Plazas (DSP), 1,800 Channel Partners and 175 Authorized Service Providers (ASP).

Daikin India manufacturers its air-conditioning units at its production facility based at Neemrana in Rajasthan. Set up with an initial project investment of about Rs 210 Crore, the Neemrana facility spread across a sprawling area of 160,000 square metres produces nearly 500000 residential air-conditioning units along with nearly 20000 VRV units and 1800 chiller units every year.

Some of the Daikin India’s industry leading technologies include:

• Variable Refrigerant Volume (VRV) technology – Daikin India has introduced the Variable Refrigerant Volume (VRV) technology that is utilized for large sized buildings, the VRV System offers High Coefficient of Performance (COP), large outdoor capacities, greater energy savings, easier installation, longer actual and total piping.
• Super Multi Hot Water Air-conditioning Solution – Daikin India’s Super Multi Hot Water Air-conditioning technology utilizes disposed energy to heat water, thus reusing the disposed energy for other domestic usage. Through this technology, the outdoor unit can be connected with up to three indoor units and one storage water heater to offer greater energy efficiency across installations.
• Room Precise Temperature Control Technology – This technology by Daikin India utilizes a revolutionary electronic expansion valve, which continuously adjusts the refrigerant volume in response to load variations in indoor units. This helps in maintaining a comfortable room temperature at a virtually constant level without temperature variations common in conventional on/off control systems.
• Pioneers of HFC32 Refrigerant – Daikin India has introduced the HFC32 refrigerant for the first time in the country. A low carbon-dioxide emitting refrigerant, HFC32 has zero ozone depletion potential and boasts of a lower global warming potential as well. Featuring a better lifecycle climate performance, HFC32 is very suitable for split air conditioners and heat pumps and is an excellent alternative to replace R410A in terms of performance.
• Introduction of Inverter Air-Conditioning Technology - Daikin India has introduced its latest Inverter airconditioner, which uses HFC32 refrigerant as its base technology. Powered by an in-built inverter AC that helps in sustaining the domestic power needs, the appliance integrates the Reluctance DC Inverter Power Control technology featuring the Reluctance DC Compressor Motor with a DC Fan Motor to achieve High COP’s.

How did your company fare in FY2013-14 in terms of business achieved, operating profit and new clients acquired?
Company reported turnover of Rs 2200 Crore in FY13-14 and is aiming to achieve Rs 3000 Crore in FY14-15.

Could you comment on the composition, industry size, and profitability of the Indian HVAC industry? What’s your market share in India?
Product OEMs, Contract Manufacturers, Service Providers, Component Suppliers, System Integrators and Maintenance Companies are the key stakeholders in this ever-growing market.

The Indian HVAC market is segmented by different product types like air handling equipments, heating equipments, cooling equipments along with air treatment, air filtration and de-dusting market segments,. Heat pumps, humidifiers/dehumidifiers, boilers, furnaces, air-conditioners, ventilation fans and airpumps are some key segments of the market.

The Indian heating, ventilation and air conditioning (HVAC) market is expected to grow by 15%-20% per cent on a Y-o-Y basis and reach upto Rs 15,000 crore in FY’14, up from the Rs 10,000 crore revenue achieved between 2005 and 2010.

The current market share of Daikin India in the residential sector is 12-15%, which the brand aims to grow to 20% by the turn of the current fiscal. In terms of the Light commercial (VRV) market, Daikin India holds more than 50% of the market, while in the Commercial (Chillers) category it lays claim on more than 25% market share. For Daikin India, 70% of its revenue sales come from the Residential sector while, the remaining 30% revenue comes from its commercial sales.

Apart from commercial and residential solutions, do you also offer HVAC solutions for the industrial segment? How far your solutions are green?
As global leaders in air-conditioning, Daikin has taken a pioneering step towards mitigating the environmental impact from refrigerants, with the adoption of HFC32 refrigerant. Daikin products, using HFC32 based products bear only one-third of the global warming potential (GWP) when compared with R410A & R22 refrigerants. This is basis a UNEP Technology and Economic Assessment Panel report that considers HFC-32 not only as an alternative to HCFC-22, but also as an alternative to R-410A. Daikin considers that HFC32 is very suitable for split air conditioners and heat pumps and is an excellent alternative to replace R410A in terms of performance. The HFC32 refrigerant is a low carbon-dioxide emitting refrigerant which has a lower global warming potential and boasts of zero ozone depletion potential. The HFC32 refrigerant also enables to reduce the amount of refrigerant needed per air conditioning unit which helps in suitable for refrigerant recycling as well. Enabling products to be made compact, owing to its properties, HFC32 refrigerant’s lower global warming impact helps curtail greenhouse gas emissions thus guaranteeing better energy efficiency.

Technological innovations are happening all the time. How far your solutions are in sync with the latest technological trends?
Daikin India is a statesman in bringing in the latest technological trends into the Indian HVAC market. Some of the latest technological trends include:

• Introduction of HFC32 Refrigerant – Daikin India has introduced the HFC32 refrigerant for the first time in the country. A low carbon-dioxide emitting refrigerant, HFC32 has zero ozone depletion potential and boasts of a lower global warming potential as well. Featuring a better lifecycle climate performance, HFC32 is very suitable for split air conditioners and heat pumps and is an excellent alternative to replace R410A in terms of performance.
• Inverter Air-Conditioning Technology - Daikin India has introduced its latest 1.5 ton capacity Inverter air-conditioner, which uses HFC32 refrigerant as its base technology. Powered by an in-built inverter AC that helps in sustaining the domestic power needs, the appliance integrates the Reluctance DC Inverter Power Control technology featuring the Reluctance DC Compressor Motor with a DC Fan Motor to achieve High COP’s.

What needs to be done by the Government of India to boost economic growth?
The growth of the economy is based on the growth of its constituent sectors which need to be encouraged to achieve financial growth. In the said terms, relevant to the growth of the HVAC sector is the progress of the Indian Real Estate & Construction industry. Today there is a great optimism surging in the Indian HVAC sector, and it expects huge from the probusiness government. While the last budget gave a moderate outlook, the need is now to create more business oriented policies that will signal greater investments in the sector and thus enable major economic growth.

Today the need is to have streamlined policies, rationalization of excise structure, favourable incentives to domestic manufacturers, encouraging usage of technological innovations, creation of domestic research & development hub and a positive export support. Also the government has to build positive policies pertaining to import & export duty structure and should also outline India-centric FTA agreements attuned to create more empowerment of the economy.

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