The Hindu Business Line : Thermax China unit to go on stream in June

Pune, April 4 Thermax is setting up its first wholly-owned foreign enterprise at Zhejiang in China, and will begin manufacture of a range of absorption coolers with capacity of up to 1,500 tonnes from this greenfield facility by June.

Elaborating on the new project, Mr M.S. Unnikrishnan, Managing Director and CEO, Thermax Ltd, said that the company had invested around $10 million in setting up a modern plant located around 175 km south of Shanghai.

“This is our first level of investment for the manufacture of 200 chillers, with an ability to enhance this by 100 more at the same site,” he said. The company, which gets a 6 per cent cost arbitrage in China, expects to take three years to reach the present installed capacity.

“Around 50 per cent of the $600 million global market for absorption chillers is in China,” Mr Unnikrishnan said, adding that it was this factor that prompted the company to take the decision in 2005 to launch its first overseas manufacturing facility there.

Thermax already has an established clientele for absorption chillers in India, and claims a market share of 85 per cent accounting for Rs 140 crore of business. It exports 40 per cent of its annual production of 350 units to Europe, the US, the Middle East and South East Asia.

Unit plans

Chillers are a part of Thermax’s heating and cooling business unit that accounted for around 18 per cent of its total revenue during 2006-07. To give a boost to this business segment, Thermax has also invested over Rs 13 crore in setting up a testing and assembling facility at Pune for large units of over 3,500 tonnes . “We believe the market in India is evolving, and the demand for larger chillers will come from central air conditioning requirements in large buildings,” Mr Unnikrishnan said.

Meanwhile, the company’s expansion plans at Savli (near Vadodara), where it has acquired 100 acres of land and is investing Rs 300 crore to manufacture boilers, are on schedule.

A coil plant became operational last November; the drum assembly unit is expected to begin this month and a facility to manufacture packaged boilers will be commissioned in June. Mr Unnikrishnan said that full production will begin by March 2009.

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