Date:07/11/2006 URL: http://www.thehindubusinessline.com/2006/11/07/stories/2006110702470500.htm

Back Carrier plans tie-ups with retail majors

Neha Kaushik

Air-conditioning company in talks with Reliance, Bharti for projects

Growth plans
To invest next year in expanding Gurgaon capacity
To increase exports from India

New Delhi , Nov. 6

With a clutch of Indian and foreign retail chains set to launch operations, players in the allied sectors are looking to leverage this growing opportunity.

Air-conditioning major Carrier India for instance, has initiated discussions with companies entering the retail space such as Reliance and Bharti to tie up for their retail projects.

Air-conditioning

"We see substantial growth for products such as commercial ACs and refrigeration and transportation. Currently, the commercial air conditioning segment accounts for 35-40 per cent of our equipment sales and we see the contribution of this segment going up in the coming years.

"We expect the commercial air conditioning segment to grow at a higher rate than the residential segment in the coming years," Mr Krishan Sachdev, Director - Marketing, Product Management and Engineering, Carrier Airconditioning and Refrigeration Ltd, said.

Commercial ACs currently account for about 10-15 per cent of the total market.

Carrier India had total sales of about $140 million (Rs 630 crore) last year and expects to close with sales of $200 million (Rs 900 crore) in 2006.

Multi-brand strategy

Meanwhile, in the residential AC segment, the company will follow a multi-brand strategy with the Toshiba brand targeted at the high-end of the market and Carrier for the lower and mid-range. The company is currently importing the Toshiba products from its plants in Thailand and Japan, while the Carrier range is manufactured at its facility in Gurgaon.

"We have enough capacity at our Gurgaon plant to meet demand for the next year. However, we will be investing next year to expand capacity to meet the increased demand in 2008. The exact investments are still to be finalised," Mr Sachdev said.

Capacity expansion

The capacity expansion may also be in line with Carrier's plans to increase exports from India. Currently, Carrier only exports bottle coolers (to the US) from India.

Carrier in India recently completed its restructuring with the merger of Carrier Aircon Ltd (for the air conditioning business) with Carrier Refrigeration Private Ltd (for the refrigeration business). Carrier Corp, which has been operating in India through the two legal entities, has renamed the merged entity Carrier Airconditioning & Refrigeration Ltd.

Earlier this year, Carrier had consolidated manufacturing facilities at the Gurgaon plant, which has led to enhanced levels of productivity.

The merger of the two legal entities would help achieve greater productivity and business synergies.