Daikin plans to double turnover in next fiscal

After the buyout of its Indian partner""the Delhi based Shriram group in Daikin Airconditioning India, Japanese consumer durable company is chalking out an expansion strategy to boost its revenues.

Daikin has recently invested Rs 50 crore to wipe out its accumulated losses in a move to clean up its balance sheet. The company expects to make profits in 2005-06.

Toshiki Hayashi, the newly appointed managing director of Daikin AirConditioning India, said, "We expect our Indian operations to record a profit in the next fiscal. We have learnt a lot from our five-year experience in the Indian air conditioning market. Our focus will be on split ACs and centralised air conditioning systems."

The company has withdrawn from the window ACs segment citing competition and low margins. Window ACs comprises over 60 per cent of the Rs 30 billion air conditioner market in India.

"Even in split ACs, we have positioned our product in the premium segment. Besides cooling, our air conditioners also do not make any sound and thus cause no disturbance," Hayashi added. Daikin currently enjoys around 8 per cent market share here.

The Rs 1,200 crore Daikin Airconditioning India aims to double its turnover in the next few years. Daikin imports and sells its air conditioners in India.

It stopped manufacturing its products in India in 2003. Around 60-70 per cent of its products are sourced from its Thailand facility, due to Free Trade Agreement benefits.

"We may relook at setting up a manufacturing base here when we achieve critical mass," Hayashi said.

The $ 6 billion Daikin converted its Indian arm into a wholly-owned subsidiary in December 2004. As per the arrangement, Daikin returned the water coolers business sold under the Shriram brand to its original promoters.