Daikin has become the first major company to acquire land for a new factory under the production-linked incentive (PLI) scheme for white goods. The India unit of the multinational, Daikin India, finished the purchase agreement for a 75-acre plant at Sri City (Andhra Pradesh) to set up a large air-conditioner (AC) manufacturing plant, which will come up in phases. As per sources, Daikin would have to invest Rs 1,000 crore in the first phase.
The plant, expected to start operations from 2023, will have a total capacity of 1.5 million units per year. It will serve both domestic and international markets. According to sources, Daikin has so far invested over Rs 2,000 crore in India to set up its two factories and a research and development (R&D) centre at Neemrana, Rajasthan.
The new plant would be under the PLI scheme for ACs, for which it had already applied. Apart from finished AC units, it plans to manufacture key AC components that the government is aggressively pushing for. Currently, 75 per cent of the AC components (by value) used in India are imported from China, Taiwan, and Vietnam. Daikin plans to export ACs once the third plant comes up. With the penetration of ACs being the lowest — at 5-6 per cent of the Indian households — compared to other large appliances, domestic demand has been growing in healthy double-digits in recent years (except in 2020).