Air-conditioning and refrigeration major Blue Star Ltd. has deferred its plan to set up a greenfield project in Sri City by two years due to a slump in demand in recent months, said its joint managing director B. Thiagarajan.
“Last summer was bad for the industry as a whole, and also for us in terms of volume as some of the States witnessed rains. Besides, the industry also had to face issues such as increase in commodity prices, customs duty hike, foreign exchange movement and the NBFC crisis,” he said.
Indicating that commodity prices were under control and dollar prices had stabilised, he said: “Now, we are well prepared for the forthcoming season.”
The firm was hoping to increase its share in the room AC market to 13.5% in FY20 from 12.8% now.
₹80 crore earmarked
“Currently, we are operating at 80% capacity and can manage with the volume from existing units. We have earmarked ₹80 crore for modernisation and automation across our facilities. So, the greenfield unit at Sri City has to wait till FY21,” he said.
For the next fiscal, the firm plans to raise R&D spending to ₹50 crore from the current ₹40 crore and on advertising and brand communication to about ₹55 crore against ₹45 crore. It also plans to put up 50 exclusive brand stores and increase the number of expert service associates from 800 to 1,000. To commemorate the 75th anniversary of Blue Star, Mr. Thiagarajan announced the launch of 75 new models, including inverter ACs, air coolers and air purifiers.
Last year, the firm clocked a revenue of ₹4,600 crore and this year, it aims to touch ₹5,000 crore.
