Blue Star's Rs 150 crore plant in south in advanced stage

Company is examining tax sops offered by both Telangana and Andhra govts to come out with a decision

Air-conditioner manufacturer Blue Star today said the company proposed to acquire land for its Rs 150-crore unit in south India in the "next two months".

The company said it was examining tax incentives offered by both Telangana and Andhra Pradesh governments to come out with a decision.

"We're taking the plant very seriously. Within one-two months, we would be be able to take a decision on the location of the new plant. We are currently in the process of identifying land. Hopefully, we should complete land acquisition in two months," said Blue Star executive vice president for air conditioning and refrigeration segment C P Mukundan Menon today.

The two states account for 45 per cent of the company's total 300,000 units per annum room air-conditioner sales pan-India, it said.

Menon said while Sri City remained the ideal location for the new plant, acquiring land there had "become too costly" and this had made them to also consider land near Hyderabad. "We expect the respective state governments to offer some kind of power subsidy and tax holiday for sales within the state," Menon added.

According to him, the company plans the proposed plant with a capacity to manufacture 500,000 room air-conditioners per annum in two phases, to be operational in 12-14 months once it acquires 10 acres of land required for the unit.

On the company's topline growth for the fiscal, B Thiagarajan, executive director and president, said, "Our goal is to grow at least 10 per cent this year and above in the next fiscal." In the last fiscal, Blue Star clocked a turnover of Rs 3,000 crore, with a 10.5 per cent market share in the Rs 10,000 crore per annum room air-conditioner sales in the country. The company has five plants spread across Himachal Pradesh, Dadra and Nagar Haveli, Ahmedabad and Maharashtra.

Blue Star also plans to increase the level of exports from the current Rs 180 crore to Rs 500 crore in the fiscal 2017-18. The company is looking at Sri Lanka, Maldives, Bangladesh, Nepal and Gulf countries for higher exports.