Danfoss group of Denmark, which 12 years ago set up its subsidiary in Chennai, is upbeat on the market opening up for its core products like power electronics ( high power drives), pressure switches, compressors and controls used in refrigeration and air conditioning for commercial applications. Danfoss Industries President & Director, K Hariharan told ET,
” We expect the expanding food processing and agriculture sectors and increasing awareness and thrust on energy efficiency in industrial, IT and retail sectors to be the key drivers for our growth in India”.
Further, he said,
” In five years, we should do a turnover of Rs 1000 crore against the current $ 60 to 70 Million ( Rs 276 to 322 crore). Before the slowdown, we were growing at a CAGR of 25% a year. Now that India has staged a quick recovery, We will introduce new products and solutions. We are also ramping up our strength for sales, marketing and technical support services. We plan to have 250 people in four years against 140 now”.
He said this year, it expanded footprint by opening offices in Bangalore and Ahmedabad in addition to the existing offices in Chennai, Mumbai and Gurgaon. The group is also working on an outsourcing strategy for India.
” We want to do high end outsourcing like R & D, engineering services, innovation, product software, design etc.,”.
The closely held 3.5 Billion Euros Danfoss group is a family owned foundation founded in 1933. It has been operating in more than 100 countries and has 55 manufacturing plants including in the US and China. It has more than 26,000 employees worldwide.
Mr Hariharan said: ” Danfoss considers India an important and strategic market. It has a dedicated India board and is passionate about developing the market. That is why, it entered ahead of the market by setting up a 100% subsidiary in Chennai in 1998. While it has FIPB approval for pumping in $ 70 Million in the company, so far it would have invested about $ 7 Million. It had ploughed back its return into the subsidiary and it wiped out the losses in 2002″.
It has a 100% Eou in the city for supplying high power control switches ( to control pressure in Industrial plants) to both domestic and export markets. Rest of the products like compressors and controls in refrigeration and air-conditioning systems and high power drives( power electronics) are imported and sold in India.
He said Danfoss has wide range of products manufactured to meet global norms. It is only waiting for the Indian market to reach an economic scale to set up local manufacturing plants. The expanding food processing industry and entry of corporates into modern retailing will lead to more investments in cold storages and transportation of agri products. Similarly, the Government has started stipulating energy efficiency norms for air-conditioning and refrigeration. There is substantial scope for saving power in power plants, sugar, textile and other industries. The electric motors consume lot of power, he pointed out.
Danfoss also expects more demand for its products to come from infrastructure projects, IT sector and mega malls. He said the attrition level is low as the company offers a friendly environment to work and has a flexible HR policy. It also nurtures future managers by deputing MBA students from B schools to work in the Danfoss plants abroad. It is now extending the programme to engineering graduates.