Air-conditioning major Blue Star on Tuesday said it has secured semiconductor requirements for the next three years. Earlier, Blue Star used to procure semiconductors six months in advance. For the first time, the AC maker has tied up the semiconductor requirement till 2025.

B Thiagarajan, MD, Blue Star, told FE that the company has blocked the quantity of semiconductors required for the next three years. “We have never done this in our history. We used to buy six months in advance and now we have blocked the quantity from vertical vendors,” he said.

Hinting at a price hike, the company said it will review the situation for a possible price hike in April on the back of increasing prices of copper, aluminium and steel. “Right now, we have decided not to increase the prices. We will do a review by the middle of April to see whether we need to take a price hike. We have the material in stock till June,” Thiagarajan said.

The company had hiked prices in April, July and October months of 2021.

Thiagarajan said he expects to commission the first phase of its proposed world-class manufacturing plant at Sri City in Andhra Pradesh by December 2022 which will have a capacity of 4 lakh units of room ACs.

The company had earmarked Rs 550 crore for the Sri City project which consists of three phases and around Rs 220 crore would have been spent by the end of the first phase, which will have the civil construction works completed for the entire project. Blue Star’s newly formed wholly-owned subsidiary, Blue Star Climatech will be running the Sri City plant.

Thiagarajan said when the company completes the overall three phases, the total capacity would stand at 1.2 million units. “Each phase consists of 0.4 million units and will add up to our capacities,” he said.

Compared to the 2019 summer, the residential air-conditioning industry would grow 20% this summer due to pent-up demand and anticipated heatwave conditions across the country. “For two summer seasons, due to Covid-19, people did not buy ACs and the temperatures are soaring. The company would be growing faster than the industry this summer. I think we will be growing by 25%,” he said.

The company has a market share of 13.25% in the residential air-conditioners segment and targeting to move to 14% in 2022.

“We continue to diligently curate our product and price mix to cater to the entire spectrum of residential ACs market. With our constant focus on R&D and manufacturing, we are confident of rolling-out products offering immense value for money. We had already expanded our indigenous manufacturing in Himachal Pradesh and are further scaling up our manufacturing operations by setting up a new world-class manufacturing plant at Sri City backed by the PLI scheme by the government of India,” Thiagarajan said.