In just over a decade, Daikin Airconditioning India, the maker of air-conditioning systems, has managed to gain an impressive 13 per cent market share, and is now aiming to gain the top slot. In this interview, Kanwal Jeet Jawa, Managing Director and CEO, elaborates about the company's strategies and status in the HVAC segment.

Daikin Airconditioning India Pvt Ltd (DAIPL) is a 100 per cent subsidiary of Daikin Industries Ltd, Japan, a global leader in the manufacturing of commercial-use and residential air-conditioning systems. Daikin Industries was founded in 1924. With its headquarters at Osaka, the company has over 51,000 staff members engaged in about 60 production base units and 207 consolidated subsidiaries worldwide. The company's Indian operations are headed by Kanwal Jeet Jawa, Managing Director and CEO, who has over 30 years of experience in the air-conditioning and refrigeration (AC&R) industry and has held senior positions in the field of general management with highly reputed AC&R companies, including Godrej, Blue Star, Voltas and Carrier India. Excerpts from the interview:

Could you elaborate about the company's operations in India?

Daikin entered the Indian air-conditioning market in 2002 in a joint venture with Usha Shriram Group and has in just over a decade become the No. 2 HVAC brand in the country. The brand's ceaseless quest for innovation has made it the market leader for both commercial-use and high-end residential air-conditioning systems. An ISO 14001-certified company, Daikin India currently controls nearly 13 per cent of the Indian HVAC market and aspires to gain a 15-17 per cent market share by the end of 2014. We can boast of a wide dealer and sales network with 11 branch offices, 15 sales offices, four mother warehouses, 17 supporting warehouses, 100 Daikin solution plazas, 1,800 channel partners and 175 authorised service providers, all of which together aims to ensure total consumer support which is in line with Daikin's global consumer policy.

What about the production facility?

Daikin India has a state-of-the-art manufacturing facility at Neemrana, Rajasthan, which is spread across a sprawling area of 1,60,000 sq m. This facility produces a range of commercial chillers, light commercial VRV and residential ACs. It also boasts of having the distinction of producing India's first R32-based air-conditioning products.

What are the current trends in the Indian air-conditioning market and how will these shape out in the next two to three years?

One of the major trends in the Indian air-conditioning sector is greater awareness towards energy efficiency. Today's consumer is quite enlightened on star labelling as mandated by the BEE and thus focuses greatly on buying products, which have high star ratings. Also, the consumer today makes an informed choice regarding air-conditioners with 'greener' refrigerants. He or she is well aware that today HVAC systems with greener and cleaner refrigerants are available and thus aims to buy products, which have a lesser carbon footprint.

The usage of inverter AC technology which helps in greater energy efficiency by ways of integrating the reluctance DC inverter power control technology with a DC fan motor thus achieving high COPs is another growing trend that is being witnessed in the domestic HVAC sector. Further, today consumers are demanding HVAC units in the hi-wall segment along with appliances with lesser capacity. And finally, the growing focus by real estate developers in constructing greener buildings that conform to sustainable design construction standards is another trend as witnessed in the HVAC sector. These designs while helping in reducing the consumption of energy, water and natural resources also aid in making HVAC systems more cost-effective and thus are higher on the preference scale.

Does Daikin have any plans to introduce power-saving and eco-friendly products?

Daikin India has a deep commitment towards eco-friendly and energy-efficient product development. With a great focus on developing technologies, which conform to the latest energy efficient and greener norms, Daikin India has developed its HFC32 refrigerant-based inverter air-conditioning range. This pioneering technology integrates the reluctance DC inverter power control technology featuring the reluctance DC compressor motor with a DC fan motor to achieve high COPs, thus offering greater energy efficiency. The introduction of the HFC32 refrigerant in this air-conditioning range has also helped increase eco-friendliness as HFC32 is a low carbon-dioxide emitting refrigerant which has zero ozone depletion potential and boasts of a lower global warming potential than competing technologies.

Is it true that the SOHO market segment is the next big opportunity?

Yes, the air-conditioner manufacturers are tapping the small office home office (SOHO) segment to boost sales - a segment that is pegged at around Rs 1,800 crore annually. The clientele would typically include professionals like chartered accountants, lawyers, boutiques and salons. However, in my opinion it is difficult to ascertain the exact volume from SOHO, but one can confidently say that this segment is growing at 30 per cent as a large section of businesses today operate from SOHOs. But though is a growing opportunity, the residential segment will continue to be the largest piece of the market pie for air-conditioners. The market for residential ACs is estimated at Rs 7,500 crore.

What kind of R&D does the company do in India?

Research and development is an integral aspect of Daikin India's technological stewardship, and the company has a great focus upon developing efficient cooling solutions, which conform to greener air-conditioning resolutions and substantial energy efficiency. Daikin India combines extensive technological knowledge and experience to develop an innovative product range at its Air Conditioning Technology Development Centre (ACDC) at the Neemrana factory, which forms the cornerstone of cutting-edge R&D for Daikin India.

Does Daikin India export to neighbouring countries?

Daikin India currently exports to Nepal and Sri Lanka and is in process of establishing India as its export hub and expanding its export reach across the South-East Asian regions in the coming times. The company is currently working on strengthening the export network, which it aims to take deeper into the South-East Asian, African and Middle Eastern markets going forward.

What is the company's mission for the next few years?

Aspiring to become the No. 1 air-conditioning brand in the country, Daikin India seeks to leverage localisation to tailor products for local consumers, and offer products for every segment in the market, thus ensuring a strategic hold on the Indian HVAC sector.

Does the parent company engage in any sustainability projects around the world?

As a social contribution commemorating the 90th anniversary of its founding, Daikin Industries Ltd is initiating a 'Forests for the Air' project in cooperation with Conservation International (CI), an international non-governmental organisation, and the Shiretoko Nature Foundation to expand the existing reforestation and forest conservation activities. Daikin has been involved in reforestation and forest conservation activities with CI in Indonesia since 2008 and with the Shiretoko Foundation on the Shiretoko Peninsula since 2011. This project is intended to provide conservation activities in seven locations linked to the future of air-nurturing forests, beginning with the world's largest class of primeval forests.

Taking note of the 'biodiversity hotspots' and other critical forests of global importance for human well-being which CI considers to be important, Daikin selected six locations where CI has programs underway focusing on mitigating climate change and preserving natural resources, and another location where the Shiretoko Foundation is active. All are located in regions where Daikin has deep business ties. These include Brazil, Liberia, China, India, Cambodia, Indonesia and Japan.

In order to continually protect forests, support is essential from a comprehensive perspective that includes improving environmental awareness of the local residents living in the forests and establishing a local infrastructure. This project is not simply a matter of planting trees. Measures are also being implemented for sustainable agricultural support as a source of revenue that replaces activities leading to the destruction of the forests; environmental education for the local communities; management of illegal lumbering and poaching; and consensus building and training for all of these. In moving forward toward its 100th anniversary, Daikin hopes to preserve forests that mitigate the impact of global warming and forests that nourish clean air by a sustainable approach.