How has been the journey in India so far?

Danfoss began its journey in India as a Denmark-based sales organisation way back in 1960s and it was two decades ago that we incorporated Danfoss Industries as our 100 per cent subsidiary in India and commenced manufacturing from our facility in Chennai.

Since then, Danfoss India has been working towards re-writing India’s growth story by revolutionising its climate and energy outlook in a sustainable manner. By entering a new market that was rife with opportunities, our goal was clear – we wanted to innovate, be disruptive, while being a great company of repute that also focussed on giving back to the society. Today, Danfoss has a leading position in India in all our four segments – Danfoss Heating, Danfoss Cooling, Danfoss Drives and Danfoss Power Solutions wherein we have grown 10-fold in sales and our people.

What are the products and services offered by the company?

Danfoss meets the growing need for infrastructure, food supply, energy efficiency and climate-friendly solutions through our products that find applications in areas such as refrigeration, air conditioning, heating, motor control, heavy industry, industrial automation and mobile hydraulics.

Danfoss AC Drives can be found in use across industries and sectors. Some of them include: HVAC, refrigeration, food & beverages industry, marine technology, water and wastewater management, lifts and escalators, mining and minerals, chemicals, cranes and hoists, etc.

Our expertise in HVAC business started from 1933, providing energy efficient technologies that make modern life easier and to this day, we continue to break new ground in our core business areas. Every day, more than 2,50,000 items are produced at our more than 70 factories spread across 25 countries. Danfoss Industrial Automation business primarily focuses on the development and production of fluid controls, pressure and temperature controls.

Mobile & Hydraulic equipment manufacturers around the world rely on Danfoss Power Solutions for innovative solutions such as propel, control and steering solutions. We design and manufacture a complete range of engineered hydraulic and electronic components including hydrostatic transmissions, mobile electronics, orbital motors, steering components and PVG spool valve among others.

As the original inventor of both the radiator thermostat and the automatic differential pressure controller, Danfoss has been instrumental in serving the needs of the heating industry for over 80 years and has emerged as a market leader in automatic heating control technology. We have also been pushing the boundaries of climate and energy technologies by being at the forefront of a new wave of district energy solutions across the globe, including the pilot projects in India. With regards to the same, we are working with national and local governments to engineer district heating and cooling systems that help create a sustainable future.

We also hold a strong position in the air conditioning and refrigeration space with a wide range of products such as compressors, valves, pressure switches, thermostats, filter drives and heat exchangers that cater to a comprehensive range of diverse applications such as cold chain, commercial refrigeration, food processing and retail and industrial refrigeration.

In short, the scope of our technology and products is ever-growing to meet the requirements of an ever-changing world and our customers.

How technology for air conditioning and refrigeration market has evolved over the last decade?

Over the years, the lack of awareness, implementation and monitoring of proper standards and protocols in the HVACR industry has contributed to the low performance of standard cooling systems.

However, with the advent of the latest digital technologies, several ‘easy to understand and use’ solutions and affordable pricing has helped the market to evolve, to become better equipped to understand and address these challenges, while increasing commitment to global sustainability.

Considering this, Danfoss has always been committed to creating sustainable technology which is energy efficient in nature, thereby, reducing the carbon footprint of industries as well as individuals.

What are the growth drivers of your business? Which sector does generate the maximum demand?

Agriculture and horticulture will emerge as the sunrise sectors for India in the near future, with cooling and refrigeration as the high growth factors. Currently, the Indian Cold Chain industry is expected as per estimates to log a Compounded Annual Growth Rate (CAGR) of 13-15 per cent in the coming five fiscals through 2022 compared to the average CAGR of 11-13 per cent in the previous five fiscals. This will potentially expand the market from Rs. 24,800 crore in 2017 to Rs. 47,200 crore in 2022.

There are huge opportunities for efficient cold chain industry, wherever there is a distance between the production centre and consumption centre. In this regard, India has a long way to go and therefore, Danfoss has huge potential to maximize its growth in this sector.

How technically are superior your products as compared to your peers? Do you have R&D hub in India?

Since the beginning of our manufacturing operations in 1999 in India, we have transformed from being a sales focused organisation selling international products to an organisation that is focused on creating and customising its technology to suit to the requirements of diverse industries and the local market. It has been a pleasure to witness our steady growth and evolution into being a full-fledged facility that is facilitated by a strong R&D team with a manufacturing unit which develops products not only for India but also exports products to other countries.

Earlier, Danfoss India was importing 100 per cent of its products from manufacturing sites in other countries. However, now a major per cent of all our products and solutions for India come from within India. We have created a strong eco-system of supply base which will contribute to increasing sourcing within India by five times as compared to the previous year, over the next three years. While the general market trend is to import products from China, we can proudly say that Danfoss India is exporting to China.

R&D is an important aspect of Danfoss’ growth and profitability. At a global level, Danfoss invests over 4.2 per cent of its returns on R&D and this has contributed to new ideas and innovations being created today for the problems that may be faced by the industry tomorrow.

We also organise various hackathons and innovation challenges among employees from the various global facilities to ideate and create new technologies. At Danfoss, we go by the belief that even if we are not able to succeed in converting some of these ideas into innovations, it is better to fail fast rather than leave such an idea untested.

Our company has also set up four laboratories that are committed to co-creating energy efficient technologies in partnership with OEM equipment manufacturers where we have created an opportunity to test the effectiveness of the products in different conditions. We are also greatly committed to increasing the speed of innovation which has also led us to acquire or partner with new-age companies which have already developed such technologies required to increase competency.

Additionally, we follow a ‘One product one location strategy’ across Danfoss and revel in our Global Supply chain footprint and strong local sourcing expertise. Scale is also an important driver for growth. Our success has been in adopting and being a pioneer in ‘mass customisation strategy’.

How IoT has helped to bring efficiency in operations?

Digitisation across industries has given rise to the phenomenon of smart manufacturing, paving the way to Industry 4.0, where there are flexible business models. This can contribute to reducing wastage of resources and the consumption of energy apart from increased efficiency, faster turnaround, better quality, faster time-to-market, integrated supply chain and better security. In simple terms, one achieves operation excellence with smart manufacturing by addressing the ease of use of a product.

With emerging and advanced technologies like Internet of Things, 3-D Printing, Big Data and analytics, we are now empowered to design, modify and create products and solutions that customers are looking for. This helps companies to explore new revenue opportunities.

Through these technologies, companies are now able to produce customer-centric solutions which should ideally be the main architecture of our design principles. Industries should also look at incorporating design thinking in their products to ensure that we build them in such a manner that helps our customers connect to various devices and gain maximum value from the products and solutions.

However, it is important to keep in mind that digitisation can be disruptive. It is fundamental that companies ensure that the golden triangle of change is ready to make the transition i.e. people (who are at the crux), processes (which require human intervention) and technologies (that help perform processes).

What is your take on cold chain industry in India?

In terms of total farm output, India is the second largest in the world with high rankings in the production of fruits, vegetables, milk and pulses. The agri-sector also employees a total of 600 million people in the country. However, the sector’s contribution to the national GDP continues to be lower than other industries. This is because, the penetration of refrigeration across industries continues to be stagnant between 5-6 per cent and over 40 per cent of India’s agricultural produce gets wasted due to the lack of functional cold storage systems.

Of the existing cold chain systems, three fourth of the capacity is restricted to the storage of potatoes and onions which further highlights the pressing need to build newer and organised cold storages. As the first step, the government and the industry players should work towards setting up packhouses closer to the farmlands where the produce could be brought, cleaned, graded and stored in cold rooms to retain its quality. This could reinvent the way in which fresh and healthy food is served from farm-to-fork.

With the right mix of technology and practice, India has the potential to emerge as the ‘food capital of the world’. It is not long before the food processing industry emerges as the next IT industry.

What are the solutions offered by the company for the cold chain industry?

The safety and longevity of perishable farm produce and processed food is critical for India’s trade and commerce. Therefore, Danfoss seeks to provide the enabling technology that sustains the farm-to-fork process, ensuring food safety, freshness and hygiene all along the way.

Danfoss India provides solutions that help in sustaining the farm-to-fork process, ensuring freshness all along the way with cold chain machinery installations and automation systems that are reliable, cost and energy efficient. From dairy and fishery products to farm produce such as vegetables and fruits, or processed foods such as bakery items, Danfoss’ technology for cold storage provides a haven for all food items. Danfoss innovative solutions—such as hot gas defrosts systems with two-stage solenoid valves, variable frequency drives, valve stations and system controllers, among others—reduce downtime, lower maintenance costs and operational expenditure, and save as much as 15–20% in energy costs when compared to conventional cold stores.

What is your Outlook for HVACR industry for 2018-19?

While the Indian HVAC industry is seen outperforming the rest of the world by 2019, the penetration of air conditioning and refrigeration in the country stands only at four per cent today. Estimated to grow at 9.16 per cent CAGR versus the global market that is estimated to grow at 5.6per cent CAGR, India is still an untapped market when it comes to the HVAC industry.

With the rising avenues of sociological development and economic growth, India’s urban population is expected to soon reach close to half a billion. This accounts for more than 70 per cent of India’s GDP, which in turn requires a steady boom in the infrastructure sector. Currently, Commercial Buildings account for approximately one-third of global energy use and is expected to contribute 45 per cent of efficiency-related CO2 emissions savings by 2040.

At Danfoss, we believe that two-third of India is yet to be built. Understanding that infrastructure is a primary tool for progress, it is necessary that individuals and industries become aware of the limited availability of our natural resources and therefore shift towards adopting energy efficient interventions which have the potential to save up to 30 per cent in energy consumption.

In the current scenario, the most cost-efficient and smart way to decarbonise the economy is the usage of energy efficient technology which presses the need for individuals and industries to make responsible decisions while they invest in their HVAC systems – across both residential and commercial buildings.

With a firm commitment towards transforming cities to become greener, healthier and more energy efficient, Danfoss’ technologies aim to meet the growing need for modern infrastructure in the country with its extensive range of products and solutions that contributes to its global expertise as an industry leader in climate friendly and energy efficient solutions.