The world's largest air-conditioner manufacturer, Daikin Industries, aims to triple the exports of its "Made in India" products by 2025. In an interview with the Financial Times (FT), the company's chief executive Masanori Togawa said they would soon start manufacturing products like heat pumps in India.
The main reason behind the increasing focus on India is the tightening of environmental regulations in Europe.
"India would turn into a market as giant as China in the future, as the middle class and the wealthy are growing tremendously. In addition to concentrating production of (mass-market air-conditioning) products in India, we will also consider making heat pumps in the country that are exported abroad," Togawa told FT.
In India, Daikin will begin a new plant in August, manufacturing air conditioners and compressors. Currently, it exports "Made in India" products to 30 countries. It is expected to reach 100 by 2025.
Daikin currently manufactures the products at its Neemrana facility. In 2022, it announced a new plant in Sri City, Andhra Pradesh, but it has yet to become operational.
What is Daikin?
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A leading producer of air conditioners, Daikin is headquartered in Osaka, Japan. It was founded on October 24, 1924. Daikin was the first company globally to produce the first split and multi-split air conditioners.
It was also the first company to develop variable refrigerant volume (VRV) technology. This technology adjusts the refrigerant volume according to the building's requirements. This ensures energy efficiency and shuts off when no occupants are in the room.
It currently employs over 84,000 people worldwide.
What is the link between Daikin and India?
Daikin entered the Indian market in a joint venture with Usha Shriram Group at 80:20 stakes as Daikin Shriram Air-conditioning Pvt ltd. In 2004, it became a wholly-owned subsidiary of Japan's Daikin Industries.
In 2008, the company set up its manufacturing base in Neemrana. The production at the plant started in 2009. Three years later, in 2012, the company started producing its high-wall split air conditioners at the Neemrana facility.
Later, in 2016, it started a dedicated research and development centre in Neemrana.
What are heat pumps?
A heat pump is a device that transfers heat from one place to the other. In the process, it ends up cooling a warm place or heating a cool place. It does not generate any heat of its own. They absorb thermal energy from their surroundings and then transfer it to where it is needed. They can take heat from surrounding air, geothermal energy stored in the ground, and waste heat from factories and from nearby water sources.
These devices are highly energy efficient as they do not generate any heat but only transfer it. The production of heat is also cheaper with heat pumps.
They are used to heat or cool buildings, heat water, or dry clothes.
How do heat pumps work?
The heat exchanger in a pump extracts heat from the source. The extracted heat is then circulated through the system, where a compressor moves the refrigerant through a refrigeration cycle.
Then, the heat is passed on to a heat sink which is then delivered to the target, such as AC, floor heating, clothes dryer or water heater.
Many heat pumps can also operate in the opposite direction. They cool the building by removing heat from the enclosed space and rejecting it outside.