Haier to invest over US$420m in second Indian plant

Haier Group on September 7 entered into a preliminary agreement with the State Government of Uttar Pradesh to set up its second industrial park in Greater Noida on the outskirts of Delhi. The Chinese multinational consumer electronics manufacturer plans to invest more than US$420 million in the plant that will be spread across 123 acres and will house Haier’s component suppliers. The investment marks one of the biggest by a Chinese company in expanding Indian manufacturing capacity and comes less than a year after Haier’s US$82.5 million investment in an industrial park in Pune, Maharashtra.

Haier’s Pune plant has the annual capacity to make 1.8 million refrigerators, along with 500,000 units each of washing machines, air conditioners, television sets and water heaters. The latest investment comes amid a growing demand for home appliances in India owing to consumer’s rising affordability. The first phase of the Greater Noida plant, which involves investment of more than US$190 million, will start production in 2020. The second phase will be completed by 2022. At completion, the plant will produce 2 million refrigerators and 1 million each of washing machines, air conditioners and television sets.

The new plant will employ around 14,000 people, directly and indirectly. Indian appliance and consumer electronics (ACE) market reached US$31.5 billion in 2017 and is expected to increase at a 9 per cent CAGR to reach US$48.4 billion in 2022. This opportunity has attracted a host of Chinese electronics and smartphone makers to set up production units as well as research and development operations in India. The interest is driven by both the vast and growing Indian consumer base as well as supply to export markets from India owing to the nation’s high-margin and high-quality manufacturing.