Danfoss to invest in India for localisation and capacity expansion

By Staff Report December 4, 2024 10:59 am

Danfoss plans to invest ₹500 crore in India for localisation and capacity expansion. The company is targeting 4-5 localisation opportunities to capitalise on the shift towards electric energy systems and improve energy efficiency in the future energy system. 

Danfoss, a leading energy-efficient solution provider, plans to invest ₹500 crore in India for localisation and capacity expansion, aiming to maintain its investment-led strategy in the country, which it has invested in India over the past decade. The company experienced a 7% growth in 2023, compared to 10.3 billion euros in 2022, despite facing challenges in H2, and its revenue increased to 10.7 billion euros in 2023, reflecting strong growth in H1.

Ravichandran Purushothaman, President, Danfoss India, said, “India proved to be a star performer and became the fastest-growing market for Danfoss with a growth of about 20 percent in 2023. We had said we would like to reach a revenue level of ₹5,000 crore by 2025 in India, and we are absolutely on track for that. In 2023, sales in India crossed ₹3,400 crore. For the group, Asia Pacific sales growth was negative, mainly driven by the economic slowdown in China. But India continued to deliver a strong growth performance and is poised to emerge among the top 5 markets soon. We have planned a capex of ₹500 crore over the next 12-20 months, primarily in localisation and expansion of capacity across our six factories in India.”

Purushothaman said, “More than 500 companies listed on the Indian stock exchanges have announced their net zero targets. All these companies have started to measure their Scope 1 and 2 emissions. In the area of commercial building decarbonisation, the company has been offering solutions in the areas of energy, water, and waste management. However, heat pumps are now emerging as a solution to decarbonise. We collect the heat from buildings and bring it back for water heating or cooling using heat pumps. This heat pump technology has become very important in both industrial and commercial applications globally.” 

Industrial heat pumps offer a compelling solution for industries looking to optimise their energy usage, reduce their costs and dependence on fossil fuels, comply with environmental regulations, and enhance their overall operational efficiency.

The proposed investment in localisation is prompted by the need to stay cost-competitive by building a value chain in order to prepare for the emerging business opportunities due to the realignment of the supply chain on account of geopolitical factors and the PLI schemes that are aimed at supporting India’s energy transition and associated areas.

The company is a key player in the energy transition space and has identified 4-5 localisation opportunities to capitalise on the shift towards electric energy systems. The company anticipates a favourable growth outlook due to the focus on improving energy efficiency in the future energy system.

In the area of industrial decarbonisation, the company has been selling its products and solutions to the power sector and to hard-to-abate industries such as mining, cement, steel, etc. The company has initiated supply of systems like converters to electrolyser manufacturers in the green hydrogen space.