Indian electronic company, Voltas is in talks over setting up a compressor manufacturing unit in unison with an undisclosed international partner along with an INR 500 crores ($66.5 million) investment.
Confirming the move, Voltas CEO and Managing Director, Pradeep Bakshi said that the Tata Group-owned company is planning on entering a joint venture with an international partner for which Press Note 3 (PN3) approval will be required.
Mr. Bakshi has confirmed that once the PN3 approval is granted, the company will go ahead with setting up the plant, for which it has planned to invest a minimum of INR 350 crores (~$47 million) toward compressor manufacturing, and an additional INR 150 to INR 200 crores ($20 to $27 million) for air-conditioning.
While the location for the compressor manufacturing plant is yet to be decided, Mr. Bakshi stated that Voltas will commit an additional investment of INR 450 to INR 500 crores (~$60 million to $66 million), based on the approval of PN3, to the government.
Under the PN3, countries that share a land border with India will require prior approval by the government regarding foreign investments in any sector in the country. This has been done to curb any opportunistic takeover by domestic firms during the COVID-19 pandemic.
Previously, the Indian government had approved the proposal by Voltas for the manufacturing of Cross Flow Fan (CFF), Heat Exchangers, and Plastic Molding components under the production-linked incentive (PLI) scheme for air-conditioner components.
Earlier this month, a selection of 26 proposals had been announced by the Indian government, along with a committed investment of INR 3,898 crores (~$519 million) to the sector.
Under the PLI, the government had also approved the INR 538.70 crores (~$71.59 million) proposal of Daikin Industries, a Japanese air-conditioner maker, for manufacturing compressor, heat exchangers, plastic molding components, and sheet metal components.
Meanwhile, the details of the international partner have not yet been made public, with Mr. Bakshi hinting that it is one of the largest compressor manufacturers globally.
Source credit: https://economictimes.indiatimes.com/industry/cons-products/durables/voltas-plans-compressor-manufacturing-unit-in-jv-with-international-partner-to-invest-around-rs-500-crores/articleshow/87960804.cms