Indian HVAC&R Industry in Corona Virus Crisis

Converting Challenges into Opportunity

While the world goes through this crisis collectively, I wonder in my ubiquitous thoughts if this is really a crisis or a boon in disguise.

Can one really guess what the future holds after all this gets over and we get back to so-called normal life? Would the normal life be as fast-paced, busy, crowded as before or we have learnt our lessons and ‘Social Distancing’ will be the way of life?

As Indians, would we take up ‘Namaste’ and ‘Pranam’ as the way of greeting instead of handshake and hugs? Will we start standing in the queue with a decent gap? Will we have a small gathering at weddings and religious functions? Would our cities be cleaner? Would our cities learn from the examples of Surat (1994) and Thane (1998) and follow the same path of rebuilding amazing cities out of trash? Will the politicians rise above the game of playing the excluding politics of appeasing only to the minority and poor and totally ignoring the rules of the game? Or maybe we will get back to the organised chaos that we had in India before Covid19 happened to us. I am sure no expert will be able to predict this and it will continue to be a game of guesses and opinions.

But things will surely change and so will our HVAC&R Industry. For all of us, so-called the summer season of 2020 for domestic Air-conditioners is lost. These sales cannot be replaced as India’s weather condition has a marked summer and this definitely sees a spike in sales in the month of April & May. With the lockdown throughout April and now extended till 03rd May, we have already lost the business of April 2020. We still have the peak hot month of May in hand to probably cover some of the sales. Even though sales may happen but installation may be a challenge as the workers involved in installation may have moved to their home towns and villages by this time. Another challenge in this segment could be the availability of funds with the middle-class who constitutes to be a major buyer for home air-conditioners. To this segment of customers, purchasing of air-conditioners is still considered a luxury but a necessity.

On the commercial front things may take a positive turn. Infrastructure development will take place and this will boost up the HVAC&R Industry. With the losses suffered in the stock market, people will look into new areas of investment and that would probably be real estate. This will further boost up the economy. The slum pockets are the most challenging and difficult areas to control diseases like Corona. Probably Government will now realise how important it is to remove slums ( only 1 bathroom for 140 people) and offer proper housing to people where hygiene can be taken care of.

In this development phase Hospital and Medical facilities would also be an important part of this infrastructure development. All these would require ventilation, air-conditioning and refrigeration. There is no choice for India but to improve this infrastructure to support the medical needs of its citizens and bring it at par with international standards, Drug manufacturing companies, Hospitals, Nursing homes, Testing Labs, Blood Banks, Medical Equipment manufacturing companies etc would all demand HVAC&R. India Government has sanctioned Rs.15000 Crore Package to Boost Health Infrastructure until March 2024. Out of this 7774 Crore will be released immediately. India with its talent pool will also become a Global Bio-Medical hub for the world. This would open up a huge opportunity for the HVAC&R Industry.

We had been talking about cold chain development in India for some time but it never took off as anticipated. Inadequate cold-chain infrastructure has hampered India’s Cold Chain Industry. In spite of all the challenges the Indian cold chain market reached a value of INR 1,288 Billion in 2019. The market is further projected to reach INR 2,918 Billion by 2025, growing at a CAGR of 14.6% during 2020-2025. The Pandemic may affect the Cold Chain growth, however, we still have chances of this segment of the industry booming and what better time than this when we realise how important it is to build up this segment to be prepared for the unexpected and unpredictable future.

India, a country that has always been considered a good manufacturing base besides its’ infrastructure and bureaucracy, will now become a great alternative. With the disturbing supply chain worldwide because of Corona Virus, the business will shift to the Mighty 5 (India, Indonesia, Malaysia, Thailand and Vietnam). India will be surely looked upon as a good manufacturing base. It was always considered so but minus it infrastructure and bureaucracy. But in today’s scenario, with the proactive current Government, international business community may still consider to ignore these few shortcomings and consider India as an investment destination for manufacturing. Japan is offering 215 million to companies planning to shift from China to other countries. The USA was already doing so because of the trade war and with this epidemic, it will be much earlier and faster than anticipated.

With Indian Rupee at its weakest level against the US Dollar, it is time for business in India to look at ‘Make in India’ as best alternate to imports. We have the expertise, knowledge pool and a ready domestic and international market to start manufacturing of all HVAC&R Parts in India and reduce dependence on imports as much as possible. There has to be a beginning and let it be now.

Every dark cloud has a silver lining and it is up to us to look at that silver lining. This is the time to re-think, re-strategize, re-organise, re-plan and do things the new way. Why only Government, but Corporates and Private Sector should also follow this line for their business A.C.(After Corona). It is for sure that post-COVID-19 this world of ours is going to be different, but it is in our hands to make sure that it looks different towards a better tomorrow. 

We should constantly re frame our understanding of what’s happening because no one knows what’s happening and what the future has in store. Till things get back to normal, Stay Home and Stay Safe.

From: Vikash Sekhani – Director Sales and Marketing

Disclaimer: The opinion expressed by the writer in this blog is his own and do not necessarily reflect the opinion of the Dry All. While the Information contained in this blog has been presented with all due care, However, Dry All do not warrant or represent that the Information is free from errors or omission.

Author: Dry All

Manufacturer of "Full Range of HVAC&R Line Products"

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