'Our focus is on corporateand commercial customers'
Neeraj Seth is the executive vice president of Blue Star Ltd, and is currently responsible for the Refrigeration & Airconditioning products division of the company. Having a vast knowledge of cold chains in India and abroad, Neerajis actively involved in CII, Refrigeration & Airconditioning Manufacturers Association (RAMA) and other trade associations. In an interview with Sangeeta M.I., Neeraj Seth discusses the outlook for the air-conditioner & refrigeration industry this summer, Blue Star's plans for the residential segment, the company's promotional plan, launch of new products, etc.
What is the outlook for airconditioners and refrigeration industry this summer?
As far as Blue Star is concerned, we focus on corporate and commercial customers. Quite a few segments such as retailing, entertainment, healthcare and IT enabled services are growing. The market for processed foods, including icecreams, is also growing. On the whole, the outlook is good and barring the repercussions of the prolonged Gulf war, we look forward to a good season.
This has been a good year for Blue Star. Your net profit for the nine months period ended 31st December 2002, has grown by 42% on a sales growth of just 13%. What would you attribute this to?
Therefore, we enjoy customer preference, and hence leadership. Further, through value engineering, higher productivity, efficient working capital management and other cost reduction measures, we have improved our profitability.
Increasing the efficiency of an organization can grow profitability only upto a certain point. Your sales growth seems to be rather slow. How do you propose to address this?
Blue Star will enhance its presence in light commercial segment, and also develop contract manufacturing business. We are leaders in the field of cold chain, and the market for cold chains is expected to grow. We will participate in these growth areas.
Blue Star is the most profitable player in the airconditioning industry. However, you have a very small presence in the residential segment where your brand languishes way behind of the leaders.
What are your plans for the residential segment?
We will remain focused on corporate and commercial customers. We will also cater to small businessmen and self employed professionals through exclusive sales and service dealers. We will also promote our window and split ACs to the employees of the corporate establishments through specific programmes.
In a competitive market scenario companies would need to come out with new and improved products year after year. What are the new products that you are launching this year?
Our Packaged Airconditioning Division has launched an innovative remote airconditioning facility management system which helps the facility manager to precisely set the temperature, programme the system for an entire year, through his desktop/laptop thus eliminating the requirement of an operator on a day to day business.
What is your promotional plan for the coming season?
We will be advertising over television as well as print media. We have published several customer advisory booklets such as "Blue Star Guide to Comfort Airconditioning" and "Blue Star Guide to Power Savings in Airconditioning".
Since we enjoy a lot of reputation with several corporate customers, we will be undertaking promotions to the employees of these corporates. These employees are aware of Blue Star expertise and capability. Having experienced our service in their workplace, they consider us as the preferred brand, when it comes to buying airconditioners for their homes.