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Construction : Viewpoint | October 2015 | Source : CW-India

Cool Moves

Proactive strategies will enable significant growth opportunities, shares Satish Jamdar.

Blue Star´s integrated business model of a manufacturer, EPC solutions provider, and after-sales service provider, enables it to offer an end-to-end solution to customers, which has proved to be a significant differentiator in the marketplace. The company´s credentials and unmatched expertise helps it to enjoy a preferred partnership status with most of corporate and commercial India.

Potential for growth
While the economic climate is still laggard, the company anticipates significant growth opportunities in the long-term and is preparing for the future during this period. Increase in disposable income of the burgeoning middle-class is likely to boost several sectors in the commercial space. Increase in capex spends by companies will improve office expansion as well as industrial and infrastructure spends. Moreover, the penetration of room air-conditioners in the residential market is a mere 3 per cent, and given the harsh climate, especially during the summer season, coupled with enhanced affordability of consumers, this segment is expected to grow notably in the future.

With regard to commercial refrigeration, considering that after the harvest, losses in the country are extensive, coupled with food scarcity and population expansion, food preservation is of utmost importance. Thus, the demand for cold chain and other commercial refrigeration products is anticipated to be sizeable. Blue Star´s strong brand equity, credentials and unmatched expertise, will enable it to leverage the exciting growth prospects.

Sustainable ways
Being a leader in the air-conditioning and commercial refrigeration industry, Blue Star is conscious that it has to be a trendsetter in areas related to sustainability and climate change. Climate change and global warming are serious concerns and a growing threat to the world´s ecosystem. Given India´s large population, the country has a critical part to play in taking initiatives to reduce power consumption and using non-ozone depleting refrigerants with low global warming potential. The company´s mainstay of product development and R&D has been energy-efficiency coupled with eco-friendly and sustainable products.

Business strategies
The company is also preparing to rationalise its manufacturing footprint through a focused exercise that will involve demand assessment, revalidation of make and buy strategy and manufacturing capability assessment to ensure that Blue Star is future-ready.

In the contracting business, the Indian economy is showing signs of improvement and macroeconomic indicators are encouraging. The company expects a revival of the commercial construction cycle in the near term, which will give it the much-needed impetus in the electromechanical contracting space. The trend of combining multiple MEP services (HVAC, electrical, plumbing, fire-fighting and low-voltage systems) is gaining acceptance in the country. While the contracting space in India is rapidly changing and customer needs are far more challenging, Blue Star has built its capabilities in MEP contracting in a systematic way, through a judicious mix of acquisitions and capability building.

Recently, it appointed The Boston Consulting Group to develop a strategy and action plan for profitable growth of its projects business. The key objectives included identification of attractive customer segments, acquiring higher share of business from target customer segments, and developing a best-in-class delivery model. The strategic review has been completed and the key elements of the business growth strategy have been identified. These include internal reorganisation to better serve the integrated MEP requirements in the market; focusing on profitable market segments; and investing in building stronger engineering capabilities as well as in offering design-build solutions. The company has identified multiple initiatives for stronger project management and procurement practices and plans to institutionalise modern site practices based on manufacturing principles to ensure a differentiated delivery experience. It will also IT-enable its business processes while judiciously investing in construction technologies with the objective of driving productivity and consistency in its deliverables.

Beyond borders
While Blue Star has done exceedingly well in the domestic business with its integrated model of manufacturer, EPC solutions provider and after-sales service provider, it is now keen on aggressively expanding its international footprint by taking forward these unique capabilities globally. It is in the process of identifying new opportunities for its air-conditioning and commercial refrigeration products, MEP projects, after-sales service and system integration in global markets. The markets identified are the Middle East, North Africa, SAARC and ASEAN regions and, as the business matures, more markets will be added. This initiative will help significantly enhance the Blue Star brand beyond India, while providing growth opportunities for its businesses, and will go a long way in establishing Blue Star as a true global player.

About the author:
Satish Jamdar, Managing Director, Blue Star, has over four decades of experience in manufacturing, supply chain, general management and IT projects. He has worked with Siemens, BPL-Sanyo and Alstom, before joining Blue Star in 1996. Jamdar is also a Director of Blue Star Engineering & Electronics Ltd and Chairman of the CII-Western Region Sub Committee for Ease of Doing Business, as well as a member of the CII National Manufacturing Council.

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