AC Maker Daikin To Set Up Third Manufacturing Unit In India At Andhra Pradesh

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The new factory would be spread in an area of 75 acres, with a potential to create 3,000 jobs, and is expected to start operation from 2023

Japanese AC manufacturer Daikin Industries is setting up its third manufacturing unit India to manufacture ACs and AC components.

The Indian unit of the company has said in a statement that it has signed the land purchase deal for the facility at Sri City, Andhra Pradesh.

The new factory would be spread in an area of 75 acres, with a potential to create 3,000 jobs, and is expected to start operation from 2023. It will serve both domestic and international markets.

“With the starting of the third manufacturing unit at Sri City, Andhra Pradesh, Daikin aims to achieve aggressive market growth in the AC exports over the next few years. Daikin wants to make India its manufacturing hub to serve markets such as West Asia, Sri Lanka, Middle East, South America and Africa,” the company said.

Daikin aims to achieve aggressive market growth in AC exports over the next few years.

“Sensing a big manufacturing opportunity in India and an endorsement for the Indian government’s ‘Make in India’ vision, Daikin chose Sri City in southern India as one of the hottest next destinations to set up its third manufacturing base,” the company said in a statement.

Daikin India Chairman and Managing Director K J Jawa said that for the AC segment, as a strategy, the company is increasing its focus on markets that are witnessing rapid growth.

“India is the fastest-growing market for us. Daikin has a very clear strategic intent to enhance its air conditioning, air filtrations and refrigeration portfolio, for which India has been identified as a developmental hub,” he said.

Jawa added that the company believes India has the potential to become its offshore delivery centre for R&D and exports. “We believe it can serve as a regional hub for markets such as South America, Middle East and Africa.”

According to Jawa, the AC penetrations in India currently stands at only 5-6 per cent, and there is a huge potential for growth and consumers are looking for energy-efficient products with a lower total cost of ownership.

Daikin is one of the companies that have applied for the production-linked incentive (PLI) scheme for the manufacturing of components required for AC, which was recently announced by the government.

The PLI Scheme for White Goods (Air Conditioners and LED Lights) is expected to increase domestic value addition in the manufacturing process from 25 per cent to 75 per cent by 2026.

The Indian residential AC market is estimated to be around 7.5 million units per annum and to touch 9 million this fiscal.

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