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Danfoss, a leading player in providing energy-efficient
solutions, is planning a fresh investment of Rs 500 crore in India in
localisation and capacity expansion.
Denmark-based Danfoss seeks to continue its investment-led
strategy in India given the country’s strong growth outlook. It has invested Rs
2,000 crore in India in the past 10 years.
After recording strong growth in H1 of 2023, the company
faced challenges in H2. Overall, the group ended the year 2023 with a growth of
7 per cent (in local currency terms). Its revenue stood at 10.7 billion euros
in 2023, up from 10.3 billion euros in 2022.
“But, India proved to be a star-performer and became the
fastest growing market for Danfoss with a growth of about 20 per cent in 2023.
We had said we would like to reach a revenue level of Rs 5,000 crore by 2025 in
India and we are absolutely on track for that. In 2023, sales in India crossed
Rs 3,400 crore,” Ravichandran Purushothaman, President, Danfoss India, told
businessline.
For the group, Asia Pacific sales growth was negative,
mainly driven by the economic slowdown in China. But, India continued to
deliver a strong growth performance and is poised to emerge among the top 5
markets soon.
“We have planned a capex of Rs 500 crore over the next 12-20
months, primarily in localisation and expansion of capacity across our six
factories in India,” he said.
The expansion will see the company adding more than 500
people, taking the total strength from about 3,400 to 4,000 by the end of this
calendar year.
The proposed investment in localisaiton is prompted by the
need to stay cost-competitive by building a value chain in order to prepare for
the emerging business opportunities due to the realignment of the supply chain
on account of geopolitical factors and the PLI schemes that are aimed at
supporting India’s energy transition and associated areas.
The company, which helps its customers to decarbonise their
businesses, has identified 4-5 areas for localisation in order to take advantage
of opportunities in the energy transition space, where the company has emerged
as one of the significant players. Since the future energy system appears to be
electric and where improving energy efficiency will be key, it sees a
favourable growth outlook.
Danfoss supplies power modules for solar investors and
controllers for connecting solar plants to the grid, among others. Further
growth opportunities are opening up with the government’s increasing focus on
RTC (round-the-clock) power supply, which requires battery storage and Danfoss
offers standalone BESS (battery energy storage system) solutions. “We help the
peak loads to move to the off-grid ie, we bring them in and take them out,” he
added.
In the area of industrial decarbonisation, the company has
been selling its products and solutions to the power sector and to
hard-to-abate industries such as mining, cement, steel etc. It has now started
supplying systems such as converters to electrolyzer manufacturers in the green
hydrogen space.
It also sees opportunities in the net zero targets of
corporates. “More than 500 companies, listed on the Indian stock exchanges,
have announced their net zero targets. All these companies have started to
measure about their Scope 1 and 2 emissions,” said Purushothaman.
In the area of commercial building decarbonisation, the
company has been offering solutions in the areas of energy, water and waste
management. However, heat pumps are now emerging as a solution to decarbonise.
“We collect the heat from buildings and bring it back for water heating or
cooling using heat pumps. This heat pump technology has become very important
both in industrial and commercial applications globally,” he added.
“Industrial heat pumps offer a compelling solution for
industries looking to optimise their energy usage, reduce their costs and
dependence on fossil fuels, comply with environmental regulations and enhance
their overall operational efficiency,” according to a recent report by
McKinsey.
The global CDMO market, currently valued at $224 billion, is forecasted to reach $465 billion by 2032, McKinsey’s analysis revealed.
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INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
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