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Blue Star to restructure Business Operations

In order to enhance its leadership position, central air conditioning and commercial refrigeration major Blue Star has embarked on a corporate restructuring programme. Blue Star's performance has been impressive over the past couple of years, and it had reported a growth of 15% in Total Income and 55% in Net Profit for the year ended March 31, 2001.

Market Leadership

Blue Star enjoys a market share of 32% in central air conditioning, and is the largest player in the country in the field of commercial refrigeration. It offers a wide range of products and services ranging from mega air conditioning projects to window and split air conditioners. The Company has executed several prestigious projects in India, the Middle East and Far East. In Malaysia, Blue Star's air conditioning joint venture with Arab-Malaysian group has been successful for nearly a decade.

Strategies For Growth

Blue Star has identified mega air conditioning projects within the country and abroad as an opportunity area for growth. At the other end of the spectrum, the Company has aggressive plans to enhance its share in the growing market for window and split air conditioners, with a specific focus on corporate and commercial customers. Blue Star has ambitious plans to expand its commercial refrigeration business as well. Encouraged by the recent break-through orders from Sri Lanka, Yemen, Maldives and Armenia for water coolers, room air conditioners and packaged air conditioners, the Company wants to strengthen its exports operations as well.

Restructuring

In order to accomplish the above objectives, Blue Star's air conditioning and refrigeration businesses have been restructured into six Strategic Business Units (SBUs) on the basis of the nature of project, values, customer segments and distribution channels. The new SBUs thus formed are as follows:

Air conditioning and Refrigeration Special Projects Division (SPD), which will handle large industrial and comfort air conditioning projects in the domestic and exports markets. These projects are generally of value exceeding Rs.5 crores. The Company handles this business directly through its own staff.

Air conditioning Projects Division (ACPD), which will deal in large and medium sized central air conditioning plants for industrial and comfort applications. The values of these projects are less than Rs.5 crores and are handled directly by the Company or through the dealer network, depending on the complexity of the project.

Packaged Air conditioning Division (PAD), which will offer packaged comfort air conditioning solutions for medium and small offices, banks, showrooms, restaurants etc. This business is driven through a well-trained dealer network.

Room Air conditioners Division (RAD), which markets window and split air conditioners. These are standard products, sold and serviced through a wide spread dealer network.

Commercial Refrigeration Division (CRD), which deals in cold rooms, deep freezers, water coolers and ice cubers.

Central Air conditioning Service Division (CASD), promoting various service products including maintenance, retrofitting and revamping.

According to Suneel M Advani, President & Vice Chairman, "In its 58 years of existence, Blue Star has reinvented itself again and again to keep in tune with the changing market conditions. In the process, it has strengthened its core competencies, become more customer focused, reduced its cost structure and maintained its leadership position. Reflecting its financial stability, Blue Star has paid a dividend to shareholders every single year after its listing on the stock exchange in 1969. I remain confident about the prospects of Blue Star in the coming years."

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