Blue Star, to tap Lankan AC and refrigeration market
View(s):The present Sri Lankan air conditioning and refrigeration (A/C&R) market value is estimated at US$ 50 million with an expected growth of 15% per annum. Blue Star Ltd, an Indian air conditioning superbrand plans to tap this market in Sri Lanka, Mukundan Menon, Executive Vice President at Blue Star Ltd told reporters in Colombo last week.
On the sidelines of the press conference, Mr. Menon told the Business Times that the overall Sri Lankan market is only three per cent of the Indian market. Initially in terms of business operations the company operates from Tamil Nadu.
With regard to the uniqueness of Blue Star products, he mentioned that there are many brands in India. In the residential space itself there are 25 brands. Blue Star is positioned in the premium segment both in terms of features and pricing in India. Blue Star products typically come under a premium of 7-10 per cent over other brands. People pay that extra money because of the value for it.
“Blue Star is looking at the same kind of positioning in Sri Lanka. There is an advantage for Sri Lanka because of the duty exemption. Even though the product price may be 5-10 per cent higher because of that 17 per cent saving, in Sri Lanka it could be offered for residential use at 7 per cent lower because it is made in India. The freight cost is reduced to 4-5 per cent where another saving is possible. In that way Blue Star will do well in Sri Lanka since the company is looking at the niche high end segment,” he added.
As to which product of Blue Star would tap the Sri Lankan market, he said, “Variable refrigeration floors (VRFs) which are used at hotels and packaged air conditioners (PACs) which are used in single zone offices and commercial retail shops will score better.”
(RM)