We Have an Opportunity to Replace China as Global AC Exporter- Blue Star MD

Business Standard We have an opportunity to replace China as global AC exporter: Blue Star MD

Blue Star's Managing Director B Thiagarajan spoke to T E Narasimhan on how sales are expected to touch pre-Covid-19 levels during festival time and there are chances it may increase by 10 per cent

Amidst the pandemic, air conditioning and commercial refrigeration major Blue Star is seeing a pickup in demand for products catering to healthcare, pharma, FMCG, food industry and residential needs.

Blue Star's Managing Director B Thiagarajan spoke to T E Narasimhan on how sales are expected to touch pre-Covid-19 levels during festival time and there are chances it may increase by 10 per cent compared to last year.

What kind of impact did Covid-19 have on the AC industry?

In the wake of the coronavirus pandemic and economic disruptions, the AC industry lost most of its peak time sales in the first quarter -- the April-June period when most of the sales of cooling products happen as summer peaks.

However, the residential segment is recovering faster and is at a 90% level at present. Recovery would be slower in commercial segments such as offices, malls, hotels, cinemas, halls and restaurants. Offices are a large segment in the commercial cooling business and will take a long time to recover. However, some segments like food retail, food delivery, manufacturing, dairy, food processing, pharma, FMCG, banking, financial services, and insurance sectors are doing well.

How is the festival season expected to be? Will it reach last year's level?

Whatever lost in Q1 is lost. It was 50 per cent of sales in Q1. In Q2, the market has recovered to 80 per cent of last year's levels. In Q3, it will be 90 per cent of last year and in Q4, the industry will reach around 100 per cent. There is a possibility that the industry can even grow by 10 per cent in Q4. Government push like reduction in GST from 28 per cent to 18 per cent will make the ACs affordable and will push the sales. It is a revenue-neutral proposition, and I urge the GST Council to consider this appeal.