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Daikin plans $410m US factory

Daikin-Goodman-pageUSA: Daikin is to build a new 350,000m² factory in Houston as part of plans for a major medium- to long-term expansion of its US market.

The $410m new base near Houston will integrate the four existing Goodman factories and consolidate marketing and customer support activities. Significantly, it is also seen as a move to increase production and sales of VRF technology in a country where ductless air conditioning sales are growing at 20% per year.

Construction of the new base will begin soon with base operations scheduled to start in the middle of 2016.

Daikin’s acquisition of Goodman in 2012 is said to have increased business in North America but the Japanese manufacturer sees greater production capacity as essential for achieving further growth. In March last year Daikin started producing its VRV IV heat pump on an assembly line at Goodman’s current Houston factory.

In addition to enhancing Goodman’s production facilities, Daikin says the new base will showcase Daikin’s state-of-the-art production technology and aim for significant gains in productivity. It will also enable the company to reduce inventory through the sharing of components and shorten lead-times.

According to the Wall Street Journal, the new site will be in Hockley, around 30 miles north west of Houston. It also reveals that the Japanese manufacturer plans to close Goodman sites in Texas and Tennessee.

Daikin’s $3.7bn purchase of Goodman was seen as a way for the Japanese manufacturer to gain a foothold for VRF technology in North America. The deal gave Daikin access to Goodman’s sales network which does business with more than 60% of contractors and dealers in the US.

Now, with the tightening of energy regulations in the US, Daikin sees residential demand rising for high efficiency VRF technology. Although sales first began at Goodman last year for residential-use products incorporating Daikin’s inverter technology, Goodman plans to also aggressively launch similar products for this fiscal year.

Although ducted products are still the mainstream in North America, the ductless market is rapidly growing at an annual pace of more than 20%, and ductless products, such as Daikin’s VRV air conditioning systems, are beginning to gain a foothold. Daikin maintains that market recognition is growing with substantial growth also seen in the light commercial market.

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