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Onida to invest Rs 400 crore for new AC facility in Aurangabad, Maharashtra

Mirc Electronics, known for the Onida brand of consumer durables, will invest Rs 400 crore on a manufacturing facility for air-conditioners. The plant with a capacity to produce one million air-conditioners will come up in Aurangabad, Maharashtra. At present, Onida has a research and development (R&D) centre in Mumbai where the designing of the air-conditioners are done. The units get assembled at its contract manufacturing facilities abroad, including some in China. With the new plant, Mirc plans to produce all its AC units within the country.

“With information technology taking over, the country had almost lost focus on electronics. The ecosystem that would make manufacturing viable was not there. However, we are seeing a transformation in the government policy in favour of manufacturing,” said Gulu Mirchandani, chairman and managing director of Mirc Electronics. The new facility will start with assembling the units and will also look at producing washing machines. The facility is expected to be operational in a year. At present, Mirc has a capacity to produce 300,000 AC units and had produced 3.2 lakh ACs last year. With the industry moving towards split ACs, Mirc will phase out its window ACs next year. It has a 14 per cent share in the split AC market. Of the total AC market of 3.4 million units, split ACs account for 70 per cent. Mirc has launched its inverter ACs and hopes to increase its market share to 18 per cent next year.

AC business contributes to Rs 500 crore to the company’s turnover and it expects this to go up to Rs 1,200 crore by 2015. By then, the colour TV and flat panel business that accounts for Rs 1,000 crore, will bring in Rs 1,500 crore. Washing machine, which is Rs 125 crore revenue earner, is also a focus area for the company. The company targets a total turnover of Rs 2,000 crore by financial year 2014.

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