RP HAS BEEN the face of Danfoss in India. He has been with the company for 24 years and serves as the President now. “There has been quite a lot of action in the last 10 years,” he said. Danfoss India helps its customers de-carbonbise through energy – efficient solutions and ensure carbon neutrality in their business.
ROLE IN INDIA’S GROWTH
According to a McKinsey Sustainability report, India is the third-largest emitter globally, emitting a net 2.9 gigatonnes of carbon-dioxide equivalent (GtCO2e) every year, as of 2019. The bulk of these emissions (about 70 per cent) are driven by six sectors – power, steel, automotive, aviation, cement and agriculture. In India, the cost of climate change is already occurring and is expected to escalate. More than 75 per cent of Indian districts are exposed to extreme climate events and estimated losses from climate-induced disasters in the past two decades is nearly USD 200 billion. One view is that the worst impacts of climate change can be averted by limiting the increase in global temperature to 1.5°C above preindustrial levels. At present, our planet is about 1.1°C warmer than it was in the late 1800s, and emissions are constantly on the rise. To restrict the global warming increase to no more than 1.5°C, the global greenhouse gas (GHG) emissions will need to drop by nearly half by 2030 and ultimately reach net zero. The challenge for developing countries like India is to set an emissions trajectory that balances global commitments with national priorities. Transitioning to a net-zero world is easier said than done. Driving innovation and de-carbonisation It has to be done through a global integration of sustainable solutions and smart technologies. It is against this backdrop, Danfoss India has unveiled its new growth strategy. Given the increasing awareness around climate change, RP has expressed optimism that its revenue could double to €1 billion in India by 2028.
TACKLING EMISSIONS FOR A GREENER FUTURE
“The reason for growth in India is due to a very strong momentum in data centres. Artificial Intelligence and investments in digitalisation are driving capacity and data centre cooling is one of the hotspots for us right now. The second biggest growth we have seen is in semiconductors. India is building a lot of semiconductor plants, including battery and many other electric mobility related products. All of them require a higher degree of clean rooms and control temperature. The third area where we have seen growth is in industrial decarbonisation, wherein many companies are investing,” he said. Ship-to-shore power is another potential area and the company has just delivered the first shipto- shore power supply system to the Cochin Shipyard. “But, a lot more are in the pipeline as well,” pointed RP. In line with the general thrust on decarbonisation, Danfoss India has drawn up a Rs. 1,200-crore investment strategy for India. This investment will be spread over the next three years. Out of the planned, nearly Rs. 1,000 crore will go to its seventh manufacturing unit in Pune. The reminder will be used to enhance capacity and introduce new product lines at its Chennai campus, which remains its India headquarter.
LOCALISATION AND GROWTH
“The driving force behind this investment is our commitment to localisation, which has become even more crucial due to the evolving geopolitical factors,” avers RP. India remains Danfoss’ fastest-growing region, achieving strong double-digit growth in 2024. Notwithstanding a temporary slowdown in the second quarter due to general elections, growth rebounded in the latter half of the year. Danfoss India has surpassed Rs 4,000 crore in revenue in 2024, and is on track to reach Rs 5,000 crore revenue target this year. The unique heat pumps and industrial decarbonisation solutions of Danfoss India could help in a big way to support India’s transition to a low-carbon economy. The new 45-acre Pune factory set to be completed by mid-2025 is expected to play a crucial role in this growth. The Chennai plant is increasing capacity for drives, refrigeration, cooling and air conditioning controls. The facility sits on a 50-acre site, with ample room for expansion over the next decade. “We have achieved approximately 55 per cent localisation. However, reaching our target of more than 80 per cent localisation by CY2028, will require significant production scaling. The new Pune unit and Chennai expansion are key to this effort,” highlighted RP.
As part of its expansion, Danfoss is also rolling out an “80-city Distribution Strategy” to strengthen its channel partner network. Having already expanded to 60 cities the company with plans to reach 80 within two years. Danfoss employs 4,100 people, with about half of them based in Chennai, and has been increasing its workforce by 8–10 per cent annually over the past three years.
GREEN INITIATIVES
In 2024, Danfoss launched a ‘Green Ask’ initiative with strategic suppliers to enhance data on sourced products and to identify decarbonisation opportunities. Through this, Danfoss works with suppliers to provide transparent, verifiable data on their carbon footprint, set reduction targets and explore green levers such as using recycled materials, green energy and improving energy efficiency. Danfoss, is also doing health indexing of products. Primarily, this is intended to elongate its life-cycle.
“Da n f o s s I n d i a h a s moved up to the top 6 position in Danfoss global ranking this year with its strong double-digit growth in 2024. With additional investments in capacity expansion, localisation, expanding sourcing footprint and enhancing local supplier ecosystem, India is on track to reach the top 3 growth regions for Danfoss by 2028,” highlighted RP. Danfoss Group closed 2024 with revenues of €9.7 billion, down from €10.7 billion in 2023, with an operating EBITDA of 11.3 per cent. The company invested €488 million in R&D, equivalent to 5 per cent of its turnover, with a significant portion dedicated to India. “The two R&D centres in Chennai and Pune have received substantial investment in lab capabilities, enabling local product development, testing and validation without external dependency. Over the past decade, this has strengthened our ability to create solutions for global markets,” said RP. Well, Danfoss India know the way forward!
