In a significant move to strengthen India’s air-conditioning manufacturing ecosystem, Daikin India, a wholly-owned subsidiary of Japan’s Daikin Industries, has partnered with Taiwan-based Rechi Precision to establish a joint venture (JV) for manufacturing rotary compressors. The new plant, to be located in Sri City, Andhra Pradesh, aligns with India’s “Make in India” initiative and Daikin’s strategy to enhance its manufacturing capabilities in the region.
Key Highlights of the Joint Venture
- Majority Stake by Daikin India:
- Daikin India will hold a majority share in the joint venture.
- The JV is Daikin India’s first partnership in the country.
- Compressor Manufacturing Focus:
- The JV will design, manufacture, and sell rotary compressors, including inverter and non-inverter models.
- Compressors will cater to both domestic and select overseas markets.
- Strategic Location and Investment:
- The JV will develop a 33-acre manufacturing plant in Sri City, Andhra Pradesh.
- Initial operations are expected to commence in the fourth quarter of the current financial year.
Vision Behind the Partnership
Shoji Uehara, Executive Officer, Global Operations Division, Daikin Industries, Japan, highlighted the strategic intent:
“This JV aligns with our mid-term business strategy to establish India as a major hub. By collaborating with Rechi Precision, known for its material procurement and manufacturing expertise, we aim to address compressor shortages and support both internal and external demands. This partnership reinforces the ‘Make in India’ policy and fosters sustainable growth in the Indian market.”
Technology and Market Benefits
Rechi Precision brings advanced rotary compressor technology to the table. Chen, Shen Tien, Chairman of Sampo Corporation (parent company of Rechi Precision), emphasized:
“Rechi’s technical know-how, R&D, and product engineering expertise will drive continuous innovation. Our collaboration will enhance sales and service capabilities, positioning the JV to cater to the growing demand for rotary compressors.”
KJ Jawa, Chairman and Managing Director of Daikin India, added:
“This partnership allows us to broaden Daikin’s portfolio with cost-effective and advanced rotary compressor technologies tailored for residential air conditioning. Our strong market presence, combined with Rechi’s innovation, will enable us to meet rising consumer demands for economical and energy-efficient solutions.”
Strategic Goals of the JV
- Domestic Production:
- The JV will prioritize manufacturing compressors locally to reduce import dependency and address supply shortages.
- Expansion into External Markets:
- The partnership aims to leverage Rechi’s global track record and Daikin’s robust distribution network to expand sales beyond India.
- Support for India’s Energy Goals:
- The production of energy-efficient compressors aligns with India’s sustainability goals and growing demand for environmentally friendly technologies.
FAQs
1. What will the JV manufacture?
The joint venture will design and produce rotary compressors, including inverter and non-inverter models, for air-conditioning applications.
2. Where will the manufacturing plant be located?
The facility will be built on a 33-acre site in Sri City, Andhra Pradesh.
3. What is the expected timeline for operations?
The JV plans to begin operations by the fourth quarter of the current financial year.
4. How will this JV benefit the Indian market?
The JV will address compressor supply shortages, reduce import dependence, support local manufacturing under the “Make in India” initiative, and offer cost-effective air-conditioning solutions.
5. Who holds the majority stake in the JV?
Daikin India holds a 51% majority stake, with the remaining 49% owned by Rechi Precision.
