Danfoss Industries contemplates $100-million investment in India

Venkatachari Jagannathan
03 December 2003

Chennai: A large contingent of officials from Danfoss Industries, a $2.2-billion Danish company, is camping in Chennai to explore more business options in India. The business ideas include setting up a new refrigerator compressor plant and sourcing software from India.

Danfoss, the largest industrial group of Denmark, is a leading producer of precision mechanical and electronic components and of intelligent mechatronic devices. In India the company focuses basically on three product lines — refrigeration, air-conditioning, motion controls, heating and water.

The company has an assembly unit in Chennai through its 100-per cent subsidiary, Danfoss Industries, where it assembles refrigerator-condensing units, and has a turnover of $12 million. Danfoss is now looking at the possibility of building a scroll compressor used in commercial refrigeration and air-conditioning equipment.

Says Guillermo Diaz Trillo, president (commercial compressors): "Nothing has been decided on the investment front. But we are looking at the possibilities of setting up a compressor-manufacturing unit. It could be scroll or reciprocating."

According to him, Danfoss has a plant in China. But the Chinese market is so buoyant that the production there is completely absorbed leaving nothing for exports. "Whether to expand that plant or set up a new one to cater to the other markets is the question that has to be answered." If the company decides to put up a plant in India, the capex incurred will be around $100 million.

On the software side, Danfoss is planning to source software solutions from Indian vendors. According to officials, the Asian software giant Tata Consultancy Services has made a presentation about its capabilities. Says Sven Ruder, president (motion controls): "We are discussing as to the ways to build business in India."