Air-conditioning and commercial refrigeration major Blue Star Ltd. is planning a 50% increase in its capital expenditure for setting up two new plants and for making certain adjustments, said a top official.
“As part of the new manufacturing footprint, our investment is set to raise from ₹210 crore to ₹350 crore,” said B. Thiagarajan, joint managing director, Blue Star Ltd. “The investment is for setting up new plants in Jammu and Sri City in Andhra Pradesh and for shifting water coolers’ facility from Himachal Pradesh to Wada. Sri City was chosen for logistics benefit and Jammu for Cenvat benefit.”
Work at Sri City
While the construction work at Sri City would begin by the year end, it is yet to take a final call about setting up the plant in Jammu. The company officials had asked the Jammu and Kashmir (J&K) Government to spell out its stand on extending concessions under the Central GST similar to Cenvat benefits to new units being established in hill States.
“This has been going on for the last two years. We will wait for government clearance till March 31...Meanwhile, we are shifting water coolers facility from Himachal Pradesh to Wada to make way for new additions. We will start making deep freezers of 300 litre and 250 litre and glass top deep freezers there,” said Mr. Thiagarajan.
Mr. Thiagarajan said their vision was to garner 15% market share by 2021 from the present 11.5%. This would be done by picking up States in which it does not have good market share, roll out new models to fill the price-point gap and make investment in research and development.
As part of the new initiative, Blue Star rolled out 40 new models of highly energy-efficient 3-star and 5-star inverter split air conditioners that promises to deliver up to 30% extra cooling power, faster temperature pull down and extra energy savings.
During the forthcoming summer season, Blue Star would invest ₹55 crore towards advertising and brand communication and ₹40 crore on new product development, research and design initiatives. “Compared to last year, the incremental spending on these two counts would be around ₹15 crore.”
Blue Star has 150 exclusive stores in the country and it plans to increase it to 200 by end of fiscal 2019.
