Tecumseh Expands Hyd Manufacturing Plant

Business Standard [MONDAY,February 19, 2008]

Chennai/ Bangalore: Tecumseh Products India, which supplies air conditioning and refrigeration compressors, has expanded its manufacturing facility by setting up a rotary compressors plant in Hyderabad for an investment of Rs 100 crore.

The installed capacity of the manufacturing plant, expected to commence production in two months, is 750,000 compressors per annum.

This is in addition to the existing reciprocating compressor plant, which has a capacity of 900,000 units per annum.

Tecumseh’s other manufacturing plant (compressors for commercial refrigeration), in Ballabgarh (Haryana), is equipped to produce 2.4 million units per annum.

A subsidiary of Tecumseh Products (USA), the Indian operations came through the acquisition of manufacturing plants of Sriram Refrigeration in Hyderabad and Whirlpool in Ballabgarh in 1997.

“The Indian subsidiary is now the fastest-growing unit, contributing about 12 per cent to our global sales of $1.5 billion. We see a tremendous opportunity to further our business as the Indian economy is growing at a faster rate. We expect India to drive growth as more projects in the real estate are being commissioned,” said Tecumseh vice-president (sales & marketing) William J Merritt Jr.

He said the company would introduce the latest products in the Indian market.

“We are keen on expanding the manufacturing plants in India further to produce the latest products like scroll technology-based compressors locally. The financial details are being worked out. We have similar plans for Brazil, France and North America. But the focus will be on India,” he added.

Tecumseh India MD Prabhakar Kadapa said the company will also introduce high efficiency compressors and higher capacity air conditioning compressors in the domestic market.

“India is also emerging as a major hub for export of all our products,” he stated.

Tecumseh India exports over 60 per cent of its products to South Africa, West Asia, China and Turkey.

In India, Tecumseh has partnerships with major brands like LG, Whirlpool, Voltas, Electrolux, Fujitsu, Blue Star and Videocon.

World over, Tecumseh has multiple manufacturing plants producing 70,000 compressors every day.

 
 

Tecumseh's Ultramodern Products Launch

PRAJAVANI [SATURDAY,FEBRUARY 16, 2008]

KARNATAKA:

 
 

Tecumseh Entered Commercial Refrigeration Business

THE ECONOMIC TIMES [FRIDAY,FEBRUARY 15, 2008]

BANGALORE:

 

Tecumseh to Enhance Presence in India

THE HINDU[FEB.14 , 2008]

BANGALORE: The US-based Tecumseh Products Company, providers of cooling solutions (compressors) to air conditioners and refrigerators, plans to boost its presence in the Indian market.

Plans include launching high-end energy efficient products and enhancing service lines in the country, said Mr Prabhakar Kadapa, Managing Director, Tecumseh India.

Tecumseh will be soon launching rotary compressors for air-conditioning and commercial applications in India. A manufacturing unit has been set up in Hyderabad and commercial production is expected to start in a couple of months.

The company plans to launch high efficiency AW compressors and higher capacity aircon compressors, said Mr Kadapa. It will also showcase some of its latest products that include commercial scrolls, at the ACREX – India ’08 exposition to be held in Bangalore from February 15 to 17.

Tecumseh India is a fully owned subsidiary of Tecumseh Products Company. Its other plant in India is in Ballabgarh (Haryana). In India, the company has partnerships with brands such as LG, Whirlpool, Voltas, and Blue Star. Tecumseh India exports about 65 per cent of its solutions to markets such as West Asia, South Africa, Turkey and China.

The Indian subsidiary accounts for 12 per cent of the company’s global sales of $1.3 billion. “We are the fastest growing markets for the company, growing at 20-25 per cent for the last two years,” said Mr Kadapa.

Mr Bill Merritt, Vice-President – Marketing, North American Compressor group, said, “Tecumseh sees great potential for the new and emerging commercial refrigeration products and solutions in India. With its low-cost manufacturing base and availability of skills, it can become a global supplier of these products.”

 

Tecumseh commissions rotary compressor unit

Hindu Business line [ MONDAY, SEPTEMBER 12, 2005 ]

HYDERABAD: TECUMSEH Products India, part of the $2-billion US major, has commissioned its 7,50,000 rotary compressor unit capacity at its manufacturing base at Balangar, making it the first company to achieve this figure in the country.

The company is planning to make this centre its export base for the region, according to Mr Vipin Sondhi, Managing Director.

He said that a new rotary compressor would be available in six models and cater to the 1.5-tonne and 2-tonne ranges, which constitute almost 90 per cent of the market.

This being the only plant of Tecumseh in the region, it plans to cater to the Chinese and West Asian markets and the region in general.

The response to these rotary compressors has been extremely encouraging from original equipment manufacturers (OEMs), both domestic and overseas.

Apart from being energy efficient, these compressors provide the dual advantage of cooling and heating options and can take temperatures of up to 54 degree Centigrade under ambient conditions. This was not possible before. Hence, West Asia provides immense potential.

Going forward, the company expects to manufacture compressors that can take high-voltage fluctuations and run without additional voltage stabilisers. Such products would be ideal for markets such as India, Mr Sondhi told newspersons.

Explaining the significance of the rotary compressor unit, Mr J.D. Chatterjee, Vice-President of Operations, said that the precision that this plant has brought about was a lot more than what the automobile industry has achieved in the country.

Currently, more than 80 per cent of domestic market uses rotary technology, now imported from China and South-East Asia. The rotary compressor market has been growing in the country at about 30-35 per cent annually over the last three years.

Typically, companies that assemble air-conditioners place orders with overseas companies in advance and wait for a couple of months for the orders to materialise given the issues of transport and other logistics problems. The Tecumseh plant will help OEMs bypass this problem.

Tecumseh India, which has two units - one near Hyderabad and the other at Ballabhgarh - recorded turnover of Rs 480 crore in 2004 and has projected revenues of Rs 600 crore this year.

Later this month, the new rotary plant is set for formal launch by the company Chairman.

 

Tecumseh sets up rotary compressor unit

Times News Network [ TUESDAY,SEPTEMBER 13, 2005 ]

HYDERABAD: Compressor manufacturer Tecumseh India, wholly-owned subsidiary of the US-based $2-billion Tecumseh Products Company, on Monday announced the setting up the country's first rotary compressor manufacturing facility at Hyderabad.

The Rs 475-crore Tecumseh, which supplies air-conditioner and refrigerator compressors to appliances firms such as Whirlpool, LG Electronics, Voltas, Samsung and Godrej, has two existing plants, in Hyderabad and Haryana. The rotary facility has been added at its plant in Hyderabad.

Vipin Sondhi, MD, Tecumseh, that full-scale production at the new plant would commence next month, though initial manufacturing has already begun. "Since there is no other Indian plant for rotary manufacturing, we have a big opportunity for import substitution," he said.

As of now, over three-fourths of the 12-lakh units domestic AC market utilises imported rotary compressors, all of which are brought in either from China or South East Asia.

With the new facility, Tecumseh has projected a turnover of Rs 600 crore by December 2005. An overall investment of $110 million has been pumped into Tecumseh India. Sondhi did not rule out further investments by the parent company, but added that no such plans were firmed up yet.

The plant has the capacity to manufacture 7.5 lakh units annually. Over 50% of Tecumseh's products are exported, and its key exports markets are Saudi Arabia, China, Korea and the Middle East. It kicked off Indian operations in 1997, with the acquisition of compressor manufacturing units of the Shiram group.

 

Tecumseh inaugurates rotary compressor plant

Newindpress [ TUESDAY,SEPTEMBER 13, 2005 ]

HYDERABAD: Tecumseh India, one of the leading compressor manufacturers has announced that the country's first rotary unit at its plant in Balanagar township in Hyderabad will be operational from September 12.

Talking to reporters on the sidelines of the inauguration of the plant, Vipin Sondhi, MD, Tecumseh said, initially, the new facility would be manufacturing 7.5 lakh units of rotary compressors. ‘‘With this plant, manufacturers of air-conditioners will have the option of domestic sourcing of worldclass rotary compressors. Currently more than 80 per cent of the 12-lakh unit AC market uses rotary technology and at present all these compressors are being imported from China or South-East Asia,'' he said.

 

Tecumseh commissions rotary facility at Hyderabad

Business Standard [ TUESDAY,SEPTEMBER 13, 2005 ]

HYDERABAD: Tecumseh India, a 100 per cent subsidiary of Tecumseh Products Company (TPC), US, commissioned state-of-the-art rotary compressor manufacturing facility at its Balanagar plant in Hyderabad on Monday.

Tecumseh is a leading supplier of compressors to LG, Voltas, Hitachi and Bluestar in India, and to Gree and Midea of China, Alessa of Saudi Arabia and Vestel of Turkey.

Speaking to mediapersons, Vipin Sondhi, MD of Tecumseh Products India Pvt Ltd, said, “The new plant offers our original equipment manufacturers an option to source rotary compressors from within India instead of relying only on imports and also expand our export base especially in the Middle East.”.

The rotary manufacturing facility, spread over 48,000 sq ft is the first in India, and the only rotary compressor plant of Tecumseh in the entire Asia-Pacific region including China, apart from those in the US and Brazil, he added.

The new rotary facility adds to Tecumseh’s already existing reciprocating compressor plant at Hyderabad. While the r plant has been raised to a current capacity of seven lakh units pa year, the new rotary facility has an installed production capacity of 7.5 lakh units annually.

Sondhi said that the rotary usage in the Indian market was growing at the rate of 30-35 per cent over the last three years and hence offered an opportunity to capture the domestic market which earlier depended on imports. Currently, more than 80 per cent of the 12-lakh unit domestic AC market uses rotary technology and, at present, all these compressors are imported from China or Southeast Asia, he said.

 

Tecumseh will launch Rotary Compressor

Deccan Chronicle [ TUESDAY,SEPTEMBER 13, 2005 ]

HYDERABAD: Tecumseh India, a subsidiary of Tecumseh Products Company of the United States, sees India as a springboard to exports in the Asian region, with exports expected to increase as the company launches its rotary compressors, a senior company official said on Monday.

Talking to reporters at the unveiling of rotary compressors at Tecumseh's manufacturing unit here, Vipin Sondhi, managing director of Tecumseh India, said that currently exports accounted for 35 per cent of the company's revenues in India. The biggest market for Tecumseh India's compressors was Saudi Arabia followed by China, Mr Sondhi said.

He said that Tecumseh was the first company in India to manufacture highprecision rotary compressors for the airconditioning industry. "The Hyderabad unit has a capacity to manufacture 7.5 lakh units annually, and we expect to supply these compressors to airconditioner companies in India. Currently, India imports most of the rotary compressors," Mr Sondhi said. India's domestic AC market is estimated to be 12 lakh units per year.

 

Tecumseh India bags US order

The Hindu Business Line [ TUESDAY, JULY 26, 2005 ]

NEW DELHI: TECUMSEH India, a 100 per cent subsidiary of Tecumseh Products Company (TPC), USA, has signed a multi-million dollar three-year contract with a US engineering giant for product development through its design hub CADEM centre.

CADEM centre provides engineering solutions to multinational companies and is functioning as an independent profit centre for Tecumseh in India.

Mr Vipin Sondhi, Managing Director of Tecumseh India, said, "CADEM Centre has emerged as a specialised entity and is a key constituent of our vision for Tecumseh India. This contract will provide a major boost to our operations."

 

Tecumseh sees rise in exports

The Economic Times [ FRIDAY, APRIL 15, 2005 ]

NEW DELHI: Tecumseh India on Friday said it has doubled exports of air conditioner compressors to 5 lakh units during 2004 and aimed at 30 per cent export growth this year.

Exports are being targeted to contribute a revenue of 60 per cent, of which aircon compressors would contribute 75 per cent, Tecumseh said.

Tecumseh also claimed it has become the first company to export one million air conditioner compressors from the country.

The export of air conditioner compressors is targeted to China, Saudi Arabia, UAE and Turkey, it said.

 

Tecumseh compressors for China

The Hindu [Tuesday, Oct 05, 2004 ]

CHENNAI, OCT. 4. In what is claimed to be a tactical move, Tecumseh Products India Private Ltd. has commenced its quiet engagement in China by shipping a small quantum of reciprocating compressors to Gree, perhaps the largest maker of air-conditioners in the globe. The Indian subsidiary of the $2 billion Nasdaq-listed Tecumseh Products Company of the U.S. is hoping to ship about 40,000-50,000 compressors to China in 2004. It is gearing to up this number to 1.50 lakhs in 2005.

In an interaction with The Hindu , Vipin Sondhi, Managing Director of the Indian venture, said China had been making inroads into air-conditioner markets in the Middle East. Reciprocating compressors were in vogue in that region since they withstood the heat conditions. China, he said, made only rotary compressors and not the reciprocating ones. With Americans establishing a stronger presence in the Middle East, Chinese could ill-afford to compromise on quality if they were to compete in that market. The situation was tailor-made for Tecumseh to enter and forge tie-ups with the Chinese OEMs (original equipment manufacturers).

Tecumseh makes around six lakh reciprocating compressors (in the range of 1 to 2.5 tonnes) for air-conditioners at its Hyderabad facility. Out of this, four lakhs are exported.

Investment plan

The Indian venture, in the meantime, had drawn up a $40 million investment plan that would see the establishment of a rotary compressor facility (in the 1.5-2 tonne range) in Hyderabad. Mr. Sondhi claimed that this would be the first time that the rotary technology was introduced in India. He expected the prototype to be ready by 2004. By April next, all pre-production requirements would be in position. He indicated some critical machinery could be imported from its parent which was now undergoing a re-structuring forced by competitive forces. Tecumseh was proposing to put up a 7.50 lakh capacity rotary compressor facility even as it was planning to up the capacity of the reciprocating compressors to eight lakhs. Once the expansion was in place, Tecumseh could step up its exports to six lakhs.

Mr. Sondhi presaged Tecumseh to scale a turnover of around Rs. 450 crores in 2004, up from Rs. 340 crores in 2003.

 

Tecumseh to roll out rotary compressors

THE HINDU [WEDNESDAY, JULY 21, 2004]

HYDERABAD: Tecumseh Products India, leading supplier of air-conditioners, refrigerators and commercial refrigeration compressors, is all set to roll out rotary compressors of 1.5 tonnes and 2 tonnes capacity in March-April 2005 from the country's first rotary manufacturing facility at Hyderabad.

This is in tune with its strategy to make India a `full line' compressor manufacturing and export base. About 65 per cent of Indian market is rotary and the rest recipocatory. Tecumseh, the global leader, acquired Hyderabad based Siel Compressors along with Whirlpool's refrigerator compressor unit at Ballabgarh in Haryana, for $45 million in July 1997. And in one stroke, it also became India's largest independent compressor manufacturer, committing $100 million investment in a phased manner.

The Managing Director of Tecumseh Products India, Vipin Sondhi, said "in two years, it planned to manufacture `scrolls', in addition to rotaries and reciprocating compressors. "

 

Tecumseh posts 84 pc rise in export earnings

Business Line [MONDAY, JULY 19, 2004]

HYDERABAD: TECUMSEH India Private Ltd has registered an 84 per cent jump in export earnings with a turnover of Rs 110 crore from sales of compressors and pump kits for air-conditioning applications during the period January-June, 2004.

Exports for the same period during the previous year were Rs 60 crore, while for the entire calendar year of 2003, the turnover from exports was Rs 96 crore, according to the company. Exports were mainly to Saudi Arabia, the UAE, Bahrain, Iran, Korea, Nepal, China and Bangladesh among other countries, according to a release from Tecumseh India.

 

Tecumseh India to set up rotary compressor unit

Business Line [TUESDAY, JUNE 22, 2004]

HYDERABAD: TECUMSEH Products India Ltd (TPIL), a 100 per cent subsidiary of $2-billion Tecumseh Products Company (TPC), US, will set up a modern plant at its Hyderabad facility to manufacture rotary compressors in India mainly to reach exports markets.

The commercial production is expected to commence during March-April 2005. The initial exports would be targeted at West Asia, where the company is strengthening its market presence, according to Mr Vipin Sondhi, Managing Director, TPIL.

The funds for the rotary compressor unit would be raised from internal accruals and debt from banks and financial institutions. With the total investments for this plant, which Mr Sondhi held back for `strategic' reasons, TPC would have completed $100 million investments in India, as announced a couple of years ago, he said.

The rotary plant would be producing about 500,000 units a year and would expand to 1,000,000 if the anomalies were corrected in the duty structure. They would cater to the 1.5 tonne and 2 tonne segment which constitutes almost 90 per cent of the market, Mr Sondhi told Business Line.

TPIL has two modern manufacturing facilities - in Hyderabad for air-conditioning compressors and Ballabgarh for refrigeration. Setting up a plant to make the scroll compressors by 2006 will be the next milestone in India operations, Mr Sondhi said.

At present, compressors are made using three technologies servicing the air conditioning industry namely reciprocating, rotary and scroll. The reciprocating is made by two manufacturers in India - Kirloskar and Tecumseh India. Tecumseh is the only company in the world having all the three technologies. In India, it will be the only company to make rotary compressors as well as the other two technologies, he claimed.

The rotary compressors are gaining ground rapidly with 60 per cent of the Indian air conditioner industry importing them while about 20 per cent of the Gulf market is using rotary, whereas in the South East Asia and China almost all the compressors used are rotary. The air conditioner market is growing at 15 per cent a year in India which is quite healthy though the growth potential is much higher, the TPIL Managing Director said.

Asked about the performance of its refrigerator compressors plant in Ballabgarh, Mr Sondhi said "The refrigerator industry has been almost stagnant for 4 years so and we are being challenged. We are reworking our strategy with a focus on exports."

The company's exports are focussed to West Asia, Korea, China, Turkey, Pakistan Bangladesh etc. where the Indian built compressors are displacing the Bristol compressors from the US. Mr Sondhi explained that the Chinese are now targeting the West Asian market and would like to use the robust reciprocating compressors from Tecumseh India. "We expect good growth from this market. From a sale of about 100,000 in 2004, Tecumseh will reach a sale of about 200,000 by 2006," he said.

Exports accounted for about 28 per cent in 2003 and will grow to over 35 per cent in 2004 of TPIL's total sales of both plants put together, he said.

He explained that the anomalies in the duty structure and raw material needs to be rationalised to give a further boost to the growth of the sector as well as domestic manufacturers. At present, the duty on compressors was higher than the raw material for making the compressors such as copper and steel, making it easy for competition from overseas markets.

 

Tecumseh plugs its India operations via Cisco secure network

Business Line [TUESDAY, OCTOBER 28, 2003]

HYDERABAD: Tecumseh, a global hermetic compressor manufacturer having a manufacturing base here, has deployed an end-to-end Cisco network to interconnect its sales operations across India, as well as its global development centre network. Using Cisco's virtual private network (VPN) products, Tecumseh has linked up its various sales offices to the headquarters in Hyderabad. This is aimed to ensure that the connection is secure, wherein the various sales offices have been interconnected using Cisco's secure VPN client. The upgraded secure network has enhanced the company's internal efficiency.

Mr R. Ravi, General Manager, IT, Tecumseh Products India, said, The setting up of VPN had led to savings in time. The transfer of blueprints that earlier used to take about a week, could now be done securely within minutes. In addition, since the sales offices were now directly linked to the headquarters, sales orders were made faster and with fewer mistakes, he said.

Click here to view detailed case study

 
 

Tecumseh chucks China for India

THE ECONOMIC TIMES [TUESDAY, JUNE 22, 2004]

DELHI: What would you call a company which chooses to manufacture in India against China? Tecumseh, one of the world’s largest compressor manufacturers has already done that and now it is going a step further. It is setting up a new facility at its existing Hyderabad plant for manufacturing rotary compressor for air conditioners which is the new rage in the global AC industry.

Its Indian plant- the first in Asia producing rotary compressors – will have a capacity of 5 lakh units. In effect it would be taking competition head-on from China and other south east Asian countries which have become a hub for rotary compressors around the world.

In doing it will also become the first full length compressor manufacturer to make rotary compressor in India though some others are also contemplating. Incidentally, 60% of the 8 lakhs unit domestic AC market has converted to rotary technology and at present all the products are coming from China or South East Asia.

However, Tecumseh has decided to use its new plant, to be operational by April 2005, exclusively for exports to the Middle East market.

Vipin Sondhi, managing director of Tecumseh India, said “ There is a duty anomaly right now where the raw material used in compressor have a higher customs duty compared to the finished product and so we do not plan to supply to the domestic market. But if the anomaly is removed then we would scale up the production to 1 million units to serve the domestic market also.

Though investment figures stand undisclosed Mr.Sondhi, told ET, “With this facility our total investments will be to the tune of $100 million in India.” This would be the only rotary compressor plant of Tecumseh in Asia apart from ones in US and Brazil.

Tecumseh had entered India by acquiring had entered India by acquiring two units and till 2002 invested close to $80 million in its Indian subsidiary. Given the past records the current project should cost in the region of $10-15 million.

The rotary plant will come alongside its production infrastructure at Hyderabad which already manufactures reciprocatory compressors having a capacity of 6 lakh units.

Tecumseh is currently exporting 3 lakh units of reciprocatory compressors to the Mid East where it has a 20% market share in the 1.5 million market. Out of this 30% market is accounted by rotary and rest is catered by reciprocatory compressors.

 

Tecumseh set up unit in Hyderabad

THE ECONOMIC TIMES [TUESDAY, JUNE 22, 2004]

MUMBAI: TECUMSEH, one of the world’s largest compressor manufacturers, is setting up a new facility at its existing Hyderabad plant for manufacturing rotary compressors for air-conditioners, which the new range in the global AC industry. Its Indian plant—the first in Asia producing rotary compressors—will have a capacity of 5 lakh units. In effect, it will take competition head-on from China and other South East Asian countries, which have become a hub for rotary compressors around the world..

In doing so, it will also become the first full-length compressor manufacturer to make rotary compressors in India. Incidentally, 60% of the 8-lakh unit domestic AC market has converted to rotary technology and at present, all the products come from China or South East Asia. Tecumseh will use its new plant, which will be operational by April ’05, for exports to the Middle-East.

 

Exclusive interview with Mr. Anuj Pattanaik

TV VEOPAR JOURNAL [ APRIL 2004]

After acquisition of India’s oldest and largest compressor business—Siel Compressors Limited, Hyderabad, and the Compressor Division of Whirlpool of India Limited at Ballabgarh in 1997; Tecumseh established itself as Tecumseh Products India Limited (TPIL). Tecumseh India has two state-of-the-art manufacturing facilities at Hyderabad and Ballabgarh.

Today, Tecumseh is a dominant for refrigeration and air conditioning compressors. We are QE suppliers to all leading brands. We manufacture AC compressors in our Hyderabad facility, which has a capacity to produce 600, 000 AC compressors. Exports comprise 50 percent of our total production. We doubled our capacity in AC compressors, and in 2004 we expect to export more than 300, 000 units of AC compressors.

We now want to replicate the success we had in AC compressors for our refrigerator compressor plant at Ballabgarh. The plant has a capacity of 1.5 million compressors, where we are manufacturing both our domestic and commercial range. We want to strengthen our activities by infusion of new technologies, addition of new products to our existing product line, and by providing better customer services, Recently, our parent company has decided to make India the central hub for compressor manufacturing for facilitating designing of products. The CADEM center, which has been set up in Hyderabad, will meet all global engineering needs

On your projections for the Indian refrigerator industry for the year 2004.
The refrigerator industry in India has not grown as expected. One reason for this is that it comes lower in the category priority.
The real potential, in terms of buying, is yet to be realized, as the middle-income group in India is larger than even China. From Tecumseh’s viewpoint we are projecting 8-10 percent growth in 2004. Looking at the overall market trends in the beginning of the season, this projection may cross the 10 percent mark. The reason for projecting a positive growth in the next couple of years is the fact that India has all the fundamentals in place, including improving power situation, climatic conditions, and changes in the life style of the housewife. The rural market is also begin targeted now.

On technology trends in the Indian refrigerator compressors industry.
From consumer’s standpoint, technology is critical. Consumers are constantly seeking newer and innovative products. And from that angle, the compressors that we are going to supply now or in the future have to incorporate new technologies to meet the demands of consumers. Compressor is the only moving part in either a refrigerator or an air conditioner, and is supposed to work non-stop for 10-15 years, without the possibility of even being oiled. It is supposed to take care of variations in temperature, climate, coastal and dry areas and so on. There is definitely a huge amount of innovation involved in terms of technology and engineering. Therefore, when you visualize the future of the refrigeration and air conditioner industry, you have to take into account the compressor industry—what new technologies are in the offing, their energy efficiency levels etc.

On problems faced by the Indian refrigerator compressor manufacturers and your recommendations to the government.
The size of the refrigerator industry is a major worry today, as it is very small. We should be selling annually 2.5—3 million of compressors to be viable.

Moreover, with all the investments involved in manufacturing a technically advanced compressor, the expectation is that global standards of quality and cost competitiveness have to be met. However a refrigerator compressor sells at prices cheaper than a premium quality shirt.

While on the one hand, prices of raw materials and commodities (steel, copper, and aluminum) have shot up, customs duty on finished products like compressors have come down. Now that Free Trade Agreements are being formed, new frontiers to imports have been opened. With a 10 percent or 5 percent customs duty on imported finished products. Indian manufacturers are facing serious challenges die to the inverted duty structure.

The government needs to rationalize the duty structure, so that the prices of raw materials in India are at par globally.

On your marketing achievements and plans.
Tecumseh’s global vision is to establish strong roots in the country where it has its operations. This helps us to strengthen the three main factors that our customers look for: cost, quality, and delivery. We have highly qualified R&D teams both for AC and refrigerator compressors and we are constantly working towards improving our performance supported by the application teams of our customers.

On benchmarks you are looking at for refrigerator compressors.
Consumers have rightly become very demanding. In smaller homes, refrigerators are usually placed in bedrooms and compressors with lower sound levels are preferred. Hence at Tecumseh, we are focusing on:

  • Quieter Compressors
  • Higher energy efficiency; and
  • Wider range in terms of capacity

We will soon introduce our TH range in India. This range is already being manufactured globally and production samples are planned to be introduced in the market by May 2004. TH is a next-generation product, which has been manufactured by joint efforts of R&D teams from Brazil and India.

TH is a much smaller compressor, with a higher BTU; has better energy efficiency, consuming less power in the process; and has lower sound levels.

 

Tecumseh set to expand city arm

DECCAN CHRONICLE [FRIDAY, JANUARY 17, 2003]

HYDERABAD: Tecumseh Products Company, one of the largest independent manufacturers of compressors in the world, will be leveraging on its Indian operations to expand its market in south Asia and the Middle-East, the company’s president and chief executive officer Todd W. Herrick said.

Tecumseh Products India, a subsidiary of the $1.4 billion US firm, has two manufacturing units in India, in Hyderabad and Ballabhgarh in Haryana.

Herrick said the company planned to invest Rs 50 crore in expanding its Hyderabad plant. The plant’s annual capacity would be raised from 300,000 units to 600,000 units. The unit, which employs 700 people, manufacturers compressors for air-conditioners, refrigerators, bottle coolers and water coolers.

“Tecumseh products from India are currently exported to several countries in the region, and we expect this to increase over the next few years,” Herrick told Business Chronicle.

The Hyderabad plant also has Tecumseh’s CADEM Centre, which is equipped to provide engineering solutions to customers around the world, according to Vipin Sondhi, managing director of Tecumseh Products India.

Herrick said India had the skills to emerge as a key manufacturing destination for engineering companies around the world. “India should leverage on its relatively low labour cost and the skills of its labour pool to attract the manufacturing industry,” he said.

Tecumseh began its operations in India by acquiring the compressor business of Siel Compressors Ltd here and the compressor division of Whirlpool in Ballabgarh in 1997. A Tecumseh statement said that the company had invested $80 million in its Indian operations.

 

Tecumseh to make India export hub Neha Kaushik

HINDU BUSINESS TIMES [THURSDAY, JANUARY 09, 2003]

HYDERABAD: "INDIA needs to do a better job at selling itself internationally. There are immense opportunities to do business here."

Unusual words? Well Mr Todd W. Herrick, President and Chief Executive Officer of the approximately $1.4-billion engineering multinational, Tecumseh Products Company, is willing to bet his last buck on it. The company has already invested about $100 million into its Indian operations, since it commenced in 1997. And there are more investments in the pipeline.

Says Mr Herrick "The investments into the Indian operations will be done in a phased manner over the next 5-7 years. This will help cater to demand in the domestic as well as in international markets".

Tecumseh, through its 100 percent owned Indian subsidiary, Tecumseh Products India Private Ltd, owns two manufacturing facilities for air conditioner compressors and refrigerator compressors at Hyderabad and Ballabhgarh respectively.

Airing his optimism on business prospects in India, Mr Herrick said, "The process of setting up EOUs (export oriented units) is one of the easiest and it is transparent too. We already have three EOUs and we are talking about a fourth one now".

The company is targeting to develop India as an export hub for not only compressors, but compressor components as well. In fact, with a recession in the US economy, Tecumseh has decided to relocate its compressor components plant to India, primarily due to cost efficiencies and availability of skilled labour.

Capacity expansion is very much on the anvil. At present, Tecumseh India has a capacity of 1.5 million units for refrigerator compressors and 600,000 units for air conditioner compressors.

"We will require to have a capacity of about three million for refrigerators and one million for air conditioners in order to be a world class player," says Mr Herrick.

Tecumseh India is already exporting compressor components to the US operations and other group subsidiaries located in several locations including France. Meanwhile, the compressor kits are currently being exported to Saudi Arabia and other countries located in West Asia. The company will also begin exporting the kits to the US in the next 18-24 months.

"In fact, for Tecumseh India, we expect about 50-70 per cent of the turnover to come from exports," says Mr Herrick. Currently, exports account for a little more than 30 per cent of total sales for the company.

However, that does not mean, that the focus will be any less on the domestic market. "The Indian market has a very high potential for growth, with the penetration level for refrigerators and air conditioners being quite low. There is a tremendous market in India, particularly keeping in view the large Indian middle class".

Tecumseh has rapidly captured market share in the Indian market (its other principal local competitor being Kirloskar), and at present 70 per cent of its domestic sales come from supplies to original equipment manufacturers (OEMs).

At present, the company is an OEM supplier to the likes of Whirlpool, LG, Electrolux, Videocon, Voltas among many others, in India.

"But the biggest problem we are facing in India are the barriers to trade between the States," says Mr Herrick. "If the EEC can become one, why can't a similar thing happen among the Indian States," he says.

Apart from exports, Tecumseh will also be focusing on high value products such as compressors for commercial air conditioning and cold chain, to get away from the cyclical nature of the demand for ACs and refrigerators. Tecumseh India will soon start manufacturing two new products aimed for the commercial AC market.

Meanwhile, with its plans in place, the Rs 300-crore Tecumseh Products India is eyeing a 25-30 per cent growth this year. "We are targeting to achieve a minimum of 10 per cent growth every year," says Mr Herrick.

 

Tecumseh favors India over China
VIVEK SINHA

TIMES NEWS NETWORK [THURSDAY, JANUARY 09, 2003]

HYDERABAD: HYDERABAD: He can easily be dubbed as the rare contrarian. For, Todd Herrick, president and CEO of Tecumseh Products, one of the largest manufacturers of compressors in the world, argues in favour of investing in India as against China.

Ask him why India over China and he lobs a question back at you, "Why not?" The attitude reflects in more than $80m that the Michigan-based company has poured in India till date for acquiring and expanding its two compressor manufacturing facilities for airconditioners and refrigerators, making it the largest independent compressor manufacturer in the country.

Now it has gone one step ahead and created an export-oriented unit (EOU) at its Hyderabad-based plant for supplying components for compressors to be assembled and sold in USA.

For the future, Tecumseh sees an opportunity in motor manufacturing in India, which is the second largest constituent in its global sales after compressors.

Mr Herrick cites the legal structure in India which has tilted the balance in its favour as against China, "It is true that in India the legal structure is not perfect and fast enough but at least it is there. In contrast, you cannot even have title to your factory or land in China."

"There is a rule of law here, a rule of land and most importantly the market is largely untapped compared to China. The only advantage China has over India is in its currency management," he adds.

Mr Herrick was in India to inaugurate the EoU, which has been set up at its Balanagar plant in Hyderabad where the AC compressor unit is located. Simultaneously, the capacity of the plant is being ramped up from 3 lakh units per year currently to 6 lakh and capacity utilisation will be tuned to meet the export market.

Of the Rs 300-crore turnover in calendar year '02, Rs 40 crore came from exports and TPIL has targeted 25% sales growth over the next three years.

The Indian subsidiary is currently the largest manufacturer of compressors for both air conditioners and refrigerators, commanding more than 50% market share in ACs and more than one-third in refrigerators.

The US major which has three lines of business globally - compressors, engines and pumps - also smells an opportunity in manufacturing motors in the future.

"I would say DC motors is a potential area for our future operations in India. Currently, we are manufacturing at Thailand and Mexico and in the future we might consider some facility in India," Mr Herrick informed ET.

Considering the inorganic growth path taken by Tecumseh, both in India and globally, this might transpire into an acquisition in the Indian market as the company has declared its intent of production relocation globally, either as a joint venture or through acquisitions. Contrary to market expectations he ruled out a domestic initial public offer for TPIL, "We have a company rule that our subsidiaries in other countries remain wholly-owned, while we are a public limited company in the US."

 

Tecumseh Completes expansion
Kushan Mitra

HINDUSTAN TIMES [THURSDAY, JANUARY 09, 2003]

HYDERABAD: Tecumseh, the world's largest producer of air conditioning and refrigerator compressor, has expanded its facilities in India.

Tecumseh India has two facilities, a fridge compressor plant at Ballabgarh, near Delhi, capable of producing 1.1 million units a year and an AC compressor Plant at Hyderabad with a capacity of 300,000 per annum.

The Hyderabad facility has recently been expanded and its capacity has been doubled. Among its customers are Voltas, LG and Videocon. The company has also established a new export-oriented unit to produce components for the mother company. With this the company expects to add up to about Rs 37 crore in the current fisal.

"The Andhra Pradesh government has been very helpful to us, and we have seen a major change in India since the country was opened up. Clearances take a very short time" said Todd Herrick, CEO, Tecumseh Incorporated, but added that the country has a long way to go to become more competitive.
"We cannot get economies of scale just yet. So while some costs are lower in India, others are far higher. In Brazil we produce 14 million pieces per annum."

Tecumseh is also planning to bring in alternative technologies to India. "In India many manufacturers are switching to rotary compressors to cut costs. Though rotary compressors have many disadvantages, they are cheaper and there is a large market potential for them. So we are also considering to start manufacturing which compressors in India," Herrick said. He criticised the heavy duties on raw materials like copper and steel.

"I pay 30-40 percent more for copper than the prices at London(London Metals Exchange).With exports, there are drawbacks, but even those take a year to come back and do not account for my cost of money," he said.

Herrick said the erratic power supply in India was reducing the scope of innovation. "We have to manufacture devices with large voltage tolerances. Compressor would be far more efficient if they had a better power supply."

 

Tecumseh to spin off Engineering design centre as separate firm
MAHUYA PAUL

TIMES NEWS NETWORK [FRIDAY, SEPTEMBER 06, 2002 06:29:04 AM]

HYDERABAD: Tecumseh India, the wholly-owned subsidiary of $2 billion Tecumseh Products of the US, has decided to spin off its engineering design centre called the CADEM Centre into a separate company.

The centre is equipped with latest software's for modeling and analysis. It is now in discussion with companies in the US and Germany and will approach companies in the UK soon for undertaking their CAD and analysis related work.

"The CADEM Centre will remain a 100% subsidiary of Tecumseh India. We will spin it off as a separate company next year," said Vipin Sondhi, Managing Director, Tecumseh India.

The centre, which started off with four employees in July 2001, currently employs 24 people. By May 2003, the centre plans to have 100 employees to achieve its critical mass.

The centre is fully secured for data transmission, as the work undertaken is mission critical. Ever since its inception, the CADEM Centre has undertaken a variety of projects of both modeling and analysis from the parent company. The CADEM Centre helps Tecumseh save 30 per cent of its cost.

"We have engineers with software knowledge. We need people with domain knowledge. We use Unigraphics for modeling and Ansys for analysis," said R.Ravi, Deputy General Manager, management co-ordination and IT, Tecumseh India. He added that this calls for highly skilled people and high performing hardware.

"The CADEM Centre is equipped to cater to appliances, white goods, auto components, machine tools and aeronautical industries," R.Ravi said. Total solution is given to the customer. According to R.Ravi, being a US company it will help them in establishing an understanding with other foreign companies.


Tecumseh shifts US Compressor Plants to AP
MAHUYA PAUL

TIMES NEWS NETWORK [THURSDAY, AUGUST 29, 2002 01:30:35 AM]

HYDERABAD: