Durables majors hot on commercial refrigeration

With the entry of large scale format supermarkets and international retail majors announcing their grand rollout plans in India, consumer durable majors such as Godrej and Haier are planning entry into new segments to cash in on the big retail opportunity.

The market for commercial refrigeration equipment and systems is estimated at around Rs 1,200 crore and includes an array of products such as cold rooms, cold storages and deep freezers. Currently, the dominant players in the commercial refrigeration are Blue Star, Voltas and Carrier.

Industry sources say that with investments of over Rs 36,000 crore in organised retail over the next two to three years, the demand for refrigeration systems could be Rs 2,000 crore.

George Menezes, COO, Godrej Appliances, a division of the Rs 5,500-crore Godrej & Boyce Mfg Co Ltd says, "The current organised retail category stands at Rs 25,000 crore and is expected to reach Rs 100,000 crore in 3 years. The retail market is going to witness a huge boom and we want to be part of it. We anticipate that the requirement for commercial refrigeration equipment such as cold storages, chest coolers and visicoolers will be significant."

Haier India, subsidiary of China's leading consumer electronics major, also plans to enter the commercial refrigeration equipment segment. Pranay Dhabhai, director and COO, Haier Appliances (India) said, "We have firmed up plans to launch commercial refrigeration products, as well as small electronic appliances and water heaters in India this year."

With their range of deep freezers and cold storages, Haier India plans to tap institutional sectors in the retail, medical and healthcare space. The firm commenced operations in India in 2004 and has turnover of approximately Rs 300 crore currently. It aims for 30 per cent increase to Rs 400 crore this year.

Godrej Appliances, which currently sells air conditioners and refrigerators in the consumer segment, plans to tap the commercial segment with chest coolers, visicoolers, freezers, ice cream and beverage cabinets. Says Menezes, "We have embarked on a multi-generation product strategy, whereby we are looking at a product horizon of a medium to long term, from planning for immediate needs to identifying next generation categories and products we would be introducing in the future." The Godrej consumer appliance division turnover stood at Rs 1,000 crore last year and is pegged to grow to Rs 1,400 crore this fiscal.

Last year, Blue's Star's deep freezer sales showed a growth rate of 45 per cent. To add to their range of water coolers and ice cube makers, it also launched milk coolers and beer coolers.