Air handling unit making business of Ahmedabad-based Citizen Industries has been acquired by Daikin Airconditioning India. The move is expected to enhance Daikin India’s product positioning into the commercial air-conditioning market, a top company official said. It will help Daikin strengthen its presence in the fast-growing commercial air-conditioning mark and expects the segment to increase its contribution up to 35 per cent of its turnover from next year.        

This will also establish Daikin as a complete player into the domestic commercial air-conditioning market offering a complete solution into the segment. According to the industry sources, the deal is estimated to be around Rs 100-125 crore. “This will have a synergy with our existing product sales,” said Daikin Airconditioning India MD & CEO Kanwal Jeet Jawa.

Integration of the Citizen's business will result in acquisition of ongoing air-side maintenance contracts, expansion into the applied and VRV solution business (including airside), a horizontal collaboration with American Air Filter (AAF) and catalyse economies of scale at the Daikin India Neemrana, Rajasthan factory and its R&D centre, he added.  

“This is the fourth largest manufacturer and distributor of applied secondary equipment. It has large sales channels in the pharmaceutical industry and others,” he said. Citizen Industries has manufacturing units at Ahmedabad and Bengaluru, employing around 650 people which includes R&D engineers and service technicians.

Air Handling Units are mainly used for maintaining air quality such as cooling, heating, humidifying, dehumidifying and filtration. It is also used for air quantity and circulation of air in the specified area through properly designed air distribution network.

"This acquisition will provide prominence to Daikin India's current infrastructure influence and help increase penetration across various applications," he said. Daikin India has done air-conditioning projects of around 32 airports in the last three years and with this acquisition, the company can now provide airside maintenance and insulation service also, Jawa said.

Daikin Airconditioning India's business last year was worth over Rs 5,000 crore and around 75 per cent of it came from the residential cooling business and the rest from commercial business.