stepping out of the spotlight -...

www.midea.com Midea Advances Newsletter, August-September, 2012

1

VOL 2, #6, Aug-Sep 2012, No. 21

Stepping Out Of The Spotlight

Midea’s iconic founder, He Xiangjian, hands over the reigns of the

company he started more than 40 years ago


2

Midea

Advances Newsletter

Contents

NEWSLINE

Midea Holds 2012 MDV Elite

Club Seminar in Beautiful

Manila PAGE 7

FEATURE

MDV Elite Camp in Miami

PAGE 13-15

Carrier Midea India Gets a

New Address PAGE 10-11

Midea Carrier ABC JV Pulls

Off Football Coup in Brazil PAGE 3

GMCC Introduces Environ-

mental Technology at

NextSteps Conference

PAGE 4

Midea Advances Newsletter is published monthly

by the International Strategy Department of

Midea Group. We welcome all comments, sug-

gestions and contribution of articles, as well as

subscribing our newsletter. You can reach us at:

[email protected]

Midea Group

Add.: Midea HQ Building, No.6 Midea Ave, Bei-

jiao, Shunde, Foshan, Guangdong P.R.C. 528311

Tel: +86-757-2360 4714

Fax: 86-757-2660 5455

Web: www.midea.com

Publisher: International Strategy Dept.

Managing Editor:

Matthew Smith

Mandy Wang

Correspondents:

Zhenkui Cai

Jie Chen

Alex Cheng

Amber Liu

Crystal Lun

Tony Miao

Sue Ou

James Yu

Peck Zhao

WORLD SHOWCASE

PEOPLE

TECH SPOTLIGHT

Jordanian Consultants Visit

Midea HQ and CAC Factory PAGE 6

Stepping Out of The Spot-

light PAGE 5

Midea CAC Wins Govern-

mental Villa Project in the

UAE PAGE 7-8

Midea Products March into

the Biggest Retail Channel -

Casas Bahia PAGE 9

New Midea-Carrier ABC JV

Factory Begins Production PAGE 11

Midea Singapore Cele-

brates 1st Year Anniversary

with Dealers PAGE 12

Air-source heat pump water

heaters popular in China PAGE 16

The Men Who Make the

Magic PAGE 17-20


3

NEWSLINE

Midea Carrier ABC JV Pulls Off

Football Coup in Brazil

M idea Carrier ABC JV, located in Porto Ale-

gre, will dominate the location of the final games of the

Confederations Cup in 2013, the World Cup in 2014: the

Maracanã Stadium in Rio de Janeiro. The deal was more

than $2 million, with Midea responsible for renovating the

AC system of the stadium, after a fierce competition with its

rivals in Brazil.

Despite the significant value of the deal, the most

important aspect is the visibility of Midea‘s brand. ―We will

be on the main stadium of the World Cup,‖ said Operations

Director Felipe Costa.

All internal areas of the stadium - hallways, restaurants, lock-

er rooms, press center, suites - will be cooled by devices

provided by Midea Carrier ABC JV. The company has also

provided smaller devices for cooling Grêmio Arena, and has

contracts with another two stadiums listed in the 2014 World

Cup schedule: Fonte Nova (in Salvador, the 3rd most popu-

lous city of Brazil) and Castelão (in Fortaleza, the 5th most

populous).

Maracanã ,the biggest stadium in worldwide soccer,

is also the most famous and remarkable stadium in the sport.

Now with the recent announcement that it will holding the

2016 Olympic games, the world will get to see even more of

Midea.

Maracanã Stadium in Rio de Janeiro

Fonte Nova Stadium in Salvador (credit: Agência Brasil) Castelão Stadium in Fortaleza (credit: Brazilian Gov’t.)

By James Yu


4

NEWSLINE

GMCC Introduces Environmental

Technology at NextSteps Conference

L ate this summer, the NextSteps (Advancing

Ozone & Climate Protection Technologies) Conference was

held in Bangkok, Thailand. This conference has received

sponsorship from the United Nations Environment Pro-

gramme, United Nations Development Programme, the

Climate and Clean Air Coalition, as well as the United States

government and the European Parliament. Representatives

from governments of various countries and well-known

enterprises attended to discuss the latest details and trends

in climate change, and plan for future environmental policy.

GMCC was invited to the conference to introduce the

current R&D trend for natural refrigerant, and they exhibit-

ed their achievements in this area, receiving high praise from

attendees.

GMCC Developments

In the natural refrigerant field, GMCC has devel-

oped the CO2 natural refrigerant heat pump compressor,

which substantially improves the output and efficiency of the

heat pump water heater. As the first one to launch the R290

natural refrigerant in the air conditioner compressor industry,

GMCC‘s R290 compressor production line successfully

passed technical evaluations early on, resulting in the oppor-

tunity for GMCC to be involved in the Montreal Protocol

Implementation Demonstration Project funded by United

Nations Multilateral Fund (MLF) in November 2011.

This year, GMCC introduced the new R32 natural

refrigerant air conditioning compressor worldwide, announc-

ing that it had solved previous problems adapting the R32 to

its compressors while maintaining ideal performance.

As a global air conditioning compressor supplier,

supplying one quarter of the world‘s air conditioning com-

pressors, and being one of the world‘s leading natural refrig-

erant compressor manufacturers, GMCC takes its corporate

social responsibility seriously, actively developing low-carbon

innovation, and planning environmentally-friendly alternative

solutions. GMCC exhibit at NextSteps Conference

United Nations Development Programme


5

NEWSLINE

Stepping Out Of The Spotlight

O n August 25th, Midea‘s founder, He Xiangjian, withdrew from his position as Midea Group Chairman, and hand-

ed over his responsibilities to his successor. He will continue as the Chairman of Midea Investment Holding Co. Ltd., focusing

on development strategy.

GD Midea Holding Co. Ltd. Chairman and President, Fang Hongbo, was named as He‘s successor, in addition to re-

maining in his current roles. For other professional managers, Huang Jian will now serve as the President of Midea Group. Cai

Qiwu, Yuan Liqun, and Huang Xiaoming were appointed to be the Senior Vice Presidents. Li Jianwei will now serve to be the

Vice Chairman of the Board of GD Midea Holding. Most members of the new board are between the age of 35 to 45, with a

master‘s degree, and most of them have worked at Midea for 15 to 20 years.

In his first act, Fang directed a consolidation of most of the functional departments of Midea Group‘s subsidiaries in

order to cut unnecessary management overlap and to enhance operational efficiency.

Midea announced the strategic transformation since last year. Huang Xiaoming stated that ―(The consolidation has) fur-

thered Midea‘s strategic transformation, improved operational efficiency, standardized the governance structure and construct-

ed a modern corporate system‖.

Fang stated that obvious achievements have already been achieved after Midea‘s transformation. Shown from the first

half year‘s financial report of GD Midea Holding, sales revenue reached 39 billion RMB, which, in addition to net profit of

nearly 2.1 billion RMB from the parent company, marks an increase of 6% YoY. Considering the situation that the white

household goods industry is experiencing a downturn, the fact that Midea‘s gross profit margin and net profit are still increas-

ing shows the achievement produced from the recent strategic transformation. ―I am full of confidence regarding the future of

Midea,‖ said by Fang.

Analyst Wang Xiaoying from Sinolink Securities, observed that Midea has employed a professional management team to

operate and manage the company since the turn of the century, and that its decades of experience have served Midea well.

Household appliances industry observer Liu Buchen commented that Mr. He Xiangjian led the original plastic cap manu-

facturing company to ultimately become a billion RMB income enterprise. He is one of the successful first generation of entre-

preneurs in China. With the confident and capable management team well in place already, it is the right time for He to com-

plete the handover.

By Matthew Smith & Mandy Wang


6

NEWSLINE

Jordanian Consultants Visit Midea HQ and

CAC Factory

M idea invests a large amount of resources for

exploring the Middle East

HVAC market, and to fur-

ther this, Midea is always

pushing for innovation in

product quality and perfor-

mance. Thus, on 7th Sep-

tember, 6 consultants and

experts invited from Jordan

arrived to visit Midea head-

quarters and the CAC fac-

tory. Rick Chun of CAC

Technical Support intro-

duced CAC‘s general prod-

uct line, concentrating espe-

cially on the DC Inverter

VRF V4 Plus series prod-

ucts, which are known for

their advantages in energy efficiency, installation flexibility,

and ease of installation. In addition, the Digital Scroll D4

Plus VRF was discussed, which features the most advanced

technologies available, with the industry‘s most reliable and

patented digital scroll compressors with simplified electric

control.

Afterward, the consultants visited the headquarters‘

XPRO product experience center, the CAC factory, and

warehouse. After, reference projects such as the Midea head-

quarters centrifugal chiller installation, and the Rongqi

Hospital VRF air-conditioning installation, were shown

to the experts.

Midea‘s CAC divi-

sion is now aiming

to take its place in

the top echelon of

the world‘s CAC

brands. In con-

trast to western

CAC markets, the

Jordan CAC mar-

ket is now seeing

VRF for the first

time. For this rea-

son, Midea will

likely take in-

creased action to

gain greater mar-

ket share for building broader franchise and distributor

partnerships locally. Already, some powerful corporations

in Jordan have assisted Midea with sales promotions.

This visit highlights the fact that greater communica-

tion brings about better understanding and support. The

guests from Jordan left China very happy with this visit,

which provided them an invaluable learning opportunity,

and likewise provided Midea the same.

Peck Zhao, Marketing Manager of Middle East and Africa,

answers questions for his highly interested guests.

By Peck Zhao


7

NEWSLINE

Midea Holds 2012 MDV Elite Club Seminar

in Beautiful Manila

M idea CAC, with the help of its distributor in the

Philippines, kicked-off its 2012 MDV Elite Club seminar in

Manila on July 23, 2012, with approximately 40 consultants

and designers in attendance.

The MDV Elite Club is

an open platform for global

HVAC consultants and de-

signers to share product

knowledge, market infor-

mation, and experiences. The

goal is to develop further

collaboration with interna-

tional HVAC project chan-

nels for Midea commercial air

conditioning products.

The objective for this

MDV Elite Club seminar was

promoting Midea‘s flagship

product, the DC Inverter V4

Plus system in the Philippines market, and introducing the

MDV Elite Club policy to consultants to let them, and own-

ers, know more about Midea‘s Commercial AC business.

The seminar began with the presentation of Midea‘s

CAC introduction video, after which, the Midea CAC team

then described the applications for Midea Commercial AC

G ood news from Midea CAC: it has succeeded in

its bid for the United Arab Emirates governmental villa pro-

ject, thanks to its stable and reliable product quality, excel-

lent performance, and excellent technical services. The total

products, focusing specifically on the DC Inverter V4 Plus

system and the air-cooled modular chiller. Since the V4 Plus

was launched to the global market, it has become one of

Midea CAC‘s best-selling products because of its efficiency,

output agility, and stability. For buildings with a relatively

stable capacity requirement, air-

cooled modular chillers are a

better choice, with a strong and

flexible modular design, with

lower initial investment required.

The most popular air condition-

ers in the Philippines market are

traditional chillers, but for middle

-sized buildings, VRF and air-

cooled modular chillers are more

efficient and flexible, with faster

delivery time and easier installa-

tion. The presentation created

much excitement amongst at-

tendees, and throughout the sem-

inar, the consultants and designers learned much about

Midea‘s commercial AC business and products, giving them

greater assurance about Midea CAC‘s competitive and inno-

vative strength.

Midea CAC Wins Governmental Villa

Project in the UAE

value of the deal is $5 million.

Since 2008, the real estate development had slowed

considerably due to the worldwide economic crisis. In order

to solve the problem of a lack of housing for local residents,

By Peck Zhao

By Amber Liu


8

NEWSLINE

Midea CAC Wins Governmental Villa

Project in the UAE (cont.)

the King of UAE and head of Abu Dhabi developed plans to

build nearly 2000 sets of villas and allot them to native citi-

zens. The project was divided into two phases, with Midea

winning the bid for the first phase, which contains 400+ vil-

las. Midea is now bidding aggressively for the second phase

of the project.

The central air conditioning system employs Tropical

Condition Digital Scroll VRF outdoor units, with wall-

mounted and duct-type indoor units. A sample system was

installed for one of the reference villas for a non-stop, long-

term reliability test, and a special team of consultants & ex-

perts from UAE was invited to come to the Midea CAC fac-

tory to inspect the laboratory testing. The tropical application

series of products

have shown excel-

lent performance,

high efficiency and

high reliability

even at the highest

ambient tempera-

ture (up to 54C).

In order to meet

the technical re-

quirements of the

owners and con-

sultants, the R&D

engineers specially

set up a technical

team to customize

the corresponding

control function

and cooling sys-

tem.

The United Arab Emirates, as one of the largest econo-

mies in the Middle East, plays a very important role in the

region. Winning the government project helps Midea to es-

tablish good brand recognition in the area, and to promote

its digital scroll VRF product.

Concentrating on system stability and energy-saving,

Midea CAC has strong communication with its consultants

and design engineers during the project consulting, designing

and bidding. This makes the actual project requirement clear

and allows them to provide the appropriate proposal.

―After 10 years of rapid development, CAC is now

ready to compete for world class projects,‖ stated Peter

Guan, president of Overseas Sales Company, from Midea

CAC Division.

The momentum behind CAC‘s speed comes from their

pursuit for technological innovation. Now Midea CAC owns

a full range of

products, from

VRF and roof-

top units to

chiller units

such as centrifu-

gal and screw &

scroll chillers, as

well as AHU &

FCUs, fulfilling

most of the

commercial ap-

plications that

are required to

compete for

projects like

high-rise build-

ing offices, ho-

tels, hospitals,

shopping malls,

schools, gymnasiums, and residential use apartments & villas,

etc.


9

FEATURE

Midea Products March into the Biggest

Retail Channel - Casas Bahia

E ver since its establishment in November 2011,

Midea Carrier ABC JV (MC-ABC) immediately started to

integrate the products, channels and retail terminals of Car-

rier Latin America and Midea Brazil. Specifically, the

strengths of both companies were preserved by combining

the commercial channels of Carrier LA and the retail chan-

nels of Midea Brazil together.

To increase its retail channel coverage and influence,

MC-ABC managed to land a sales agreement with the big-

gest chain retailer in Brazil - Casas Bahia - after half a year

of deep negotiation. This past Au-

gust, Midea‘s microwave products

finally made their debut in Casas

Bahia.

Casas Bahia is the biggest

home appliances retailer in Brazil,

and it belongs to the biggest retail

group in Brazil, Grupo Pao de Acu-

car. Developing since its beginning in 1957, it has now

formed a sales network fully covering all large- and middle-

sized cities, with over 1,000 chain stores in Brazil.

Top home appliance brands such as Electrolux and

Samsung have a significant presence in Casas Bahia and long

-standing cooperation with the retailer, while Springer, the

well-known brand under MC-ABC, has also sold well in

Casas Bahia for many years. Considering market entrance

requirements and consumer habits, MC-ABC targeted mi-

crowave ovens to be an impressive, avant-garde product for

Casas Bahia, spending half a year

modifying the design in collabora-

tion with Casas Bahia.

With the expected success of this

exciting new entry, MC-ABC would

be sending a strong message that it

can stand alongside the other big

international manufacturers in the

top tier.

By James Yu

CasasBahia website


10

FEATURE

A fter much preparation, Carrier Midea India

(CMI) team finally moved into its new corporate office in

Gurgaon, Haryana, India on August 14, 2012. Located in

Gurgaon‘s exclusive Institutional Area, the new office is

spread across a 14,470 sqft. area. The opening celebration

included a prayer service and ―Havan‖, a sacred purifying

ritual that involves a fire ceremony, and is believed to bring

prosperity, luck and well being. Krishan Sachdev, the Man-

Carrier Midea India Gets a New Address

ager Director

of CMI, partici-

pated in the

celebration

with all of

CMI‘s employ-

ees, along with

Sanjay Maha-

jan, VP of Sales

& Marketing,

and Zubin Ira-

ni, the Presi-

dent of UTC

CCS India, and

some old col-

leagues and

friends from

Carrier India.

In his opening speech, Sachdev remarked, ―Today is

another landmark day in the history of Carrier Midea India,

as we move to our own corporate office. We now look

forward to gaining strength day after day with the help of

our committed team members to realize the dream of be-

coming a leader in the air-conditioning and home appliance

segment in India.‖

CMI‘s opening celebration preceded

India‘s Independence Day – August 15, 2012 –

itself a time of celebration in India, and thus a

suitable time for other happy occasions such as

this. The dress code for the opening day was

traditional Indian attire, while the office was

decorated in themes of Midea and India, specifi-

cally the blue and white of Midea, and the

green, Safron and white of India‘s National

Flag.

The color scheme of the CMI office is

a classic combination of Midea blue and white,

and the space is bright and refreshing with a

subtle ambiance, representing the company‘s

culture of openness and cooperation. The base-

ment of the building houses the cafeteria and

By Himani Joshi


11

FEATURE

training rooms, and space that can also be utilized for

additional employee activities in future. Astonishingly,

the transformation from bare walls to completed office

was made in only 100 days. The rapid pace of this new-

est joint venture requires flexibility and cooperation

across disciplines, and the modern and innovation-

inspiring environment at CMI‘s new office provides the

perfect foundation for this exciting new business as it

grows from here.

CM India Gets a New Address (cont.)

A fter nearly one year of preparation, the Phase

One workshop of the new ABC JV factory in Manaus Indus-

trial Zone in Brazil was completed and began production on

September 3, 2012. The Phase One workshop covers an area

of 11,000 sq. meters, compared to the nearly-90,000 sq. me-

ters of the entire factory space. Equipped with the most ad-

vanced residential air conditioning production line in Brazil,

the new workshop produces RAC products sold locally.

Meanwhile, the Phase Two workshop, covering nearly

4,000 sq. meters, has been under construction and is ex-

pected to begin production in April, 2013. At the same time,

the old JV factory located in Coroado, Manaus will be

moved to new factory.

The still-in-planning Phase Three workshop, taking an

area of up to approximately 15,000 sq meters, will be used to

produce other production lines, and as the finished goods

warehouse.

After full completion, the new factory will increase JV

New Midea-Carrier ABC JV Factory Begins

Production

Outlook of the new factory; located at the left is the phase one workshop

First production line of new factory

production capacity up to 1.6 million units (including split

and window air conditioners), making Midea Carrier ABC

JV the largest RAC manufacturer in Latin America, and the

best for supporting its competitive sales team.


12

FEATURE

Midea Singapore Celebrates 1st Year

Anniversary with Dealers

M idea Singapore recently celebrated its first year

anniversary gala dinner with esteemed dealers at the prestig-

ious Fairmont Hotel, the tallest hotel in Singapore. Dealers

appreciated the chance to gain a deeper understanding of

Midea as a brand and company, and of its products from the

corporate video and product viewing session. Deputy Gen-

eral Manager Mr. Justin Liu and Country General Manager

Mr. Wesley Lim made a great impression with the audience

when they reviewed Midea‘s ranking as the largest producer

By Alex Cheng

of consumer appliances in the world by Euromonitor, and

the largest producer of air conditioners and microwave ov-

ens worldwide. The dealers were also very excited to learn

about the possibility for distributing Midea small appliances

in the coming days. A stronger bond was forged that night

after sharing a memorable fun-filled evening together, with

the dealers and Midea‘s management both feeling more con-

fident of Midea‘s growth in Singapore in the years ahead.

From Left to right : Justin Liu, Deputy General Manager of The Midea International; Wesley Lim, Country General Manager of Singapore; Alex Cheng, Regional Marketing Director of ASEAN; Diana Tan, Air Conditioner Product Manager; Alex Tan, Laundry & Refrigerator Prod-uct Manager; Angela Leong, OEM Product Manager.


13

WORLD SHOWCASE

M idea CAC Sales & Marketing held its MDV

Elite Camp product training in Miami from July 26th to

27th. The MDV Elite Camp training serves as a familiarity

booster to distributors and agencies, giving them a thorough

understanding about Midea‘s

world-class technology and top

quality, which allows them to

propose Midea‘s products to cus-

tomers with truly genuine passion

and confidence.

A total of 44 participants

from 18 companies attended the

product training, all of them

Midea MDV distributors/

agencies in Latin America and

North America market. The

training courses mainly focused

on the new Midea products

launched this year. The flagship

product is Midea‘s Super V4 Plus

inverter VRF system, also known

as the full-DC inverter system,

boasting the highest technical

features in the VRF industry. In addition, Midea‘s fourth

generation web controller, known as the IMM (Intelligent

Manager of Midea) was also featured during the training

camp.

Steven Bo, Sales Director for Latin America, gave an

enthusiastic welcome speech, followed by a detailed product

training seminar on CAC‘s product lineup given by the mar-

keting manager, Tony Miao, which included Midea‘s VRF

technology, the new generation of Midea‘s IMM remote con-

troller, and the new functions of Midea‘s air cooled chiller

system. Ivan Wong, an executive from the technical depart-

ment, shared his views on the main technical points of the

VRF and chiller products, specifically on topics such as sys-

tem installation, wiring, commissioning, and trouble-

shooting.

Data for the air conditioning market in Latin Ameri-

ca market show about 6.3 million units sold in 2011, an in-

crease of 12% over 2010. In 2012, it is estimated to grow to 7

million units. Precision Air Conditioners (PACs), including

VRFs, are estimated at approximately 450,000 units in the

same market. The VRF market is estimated to reach approxi-

mately 20,000 units in 2012, a 25% increase over the previous

year. VRF popularity is increasing significantly thanks to its

advanced product features, listed below::

MDV Elite Camp in Miami By Tony Miao


14

WORLD SHOWCASE

1. Advanced technology, such as the all-DC inverter and digital scroll, provide substantial decreases in power consump-

tion, especially in the partial load conditions.

2. VRF systems are proven to provide superior individual zone comfort control, with accurate room temperature con-

trol as precise as ±0.5oC.

3. The system is easier to design, and installation and after-sales service is better than that of the traditional chiller sys-

tems.

4. System reliability is strong through the onboard advanced backup technology and cycle duty operation.

5. Advanced control technology and Building Management System (BMS) compatible.

Midea has become the leader in the VRF industry, utilizing full-DC inverter and digital scroll technologies, both of

which are major key advances which have not yet been universally adopted. In 2012, Midea launched the Super V4 Plus, with

an all-DC inverter system with 6 different configurations, offering capacities ranging from 8HP to 72HP. Its coefficient of

performance (COP) reaches an impressively high 4.39, and its IPLV (Integrated Part Load Value) of 5.4 is the highest in the

world.

MDV Elite Camp in Miami (cont.)


15

WORLD SHOWCASE

For control systems, CAC also introduced Midea‘s fourth generation remote administration system, known as the

Intelligent Manager of Midea (IMM). It is based on a centralized format and dedicated to the complete control and monitoring

of all functions in its systems. It can be used as a flexible multi-purpose system and applied to a variety of needs, according to

the scale, purpose and control method of each building.

MDV Elite Camp in Miami (cont.)

With Midea‘s rapidly-developing advances in technology, combined with a robust and growing market, training

camps such as CAC‘s Elite Camp are essential to helping Midea‘s partners with nurturing customer awareness with new and

existing customers about the advantages of investing in Midea advanced solutions.


16

Air-source heat pump water heaters

popular in China

A ir-source heat pump water heaters (HPWH) have

been sold in the Chinese market for about 10 years. Accord-

ing to data provided by the China air-source Heat Pump Alli-

ance (CHPA), the sales of HPWH have been maintaining a

150-200% sales growth over the last 10 years. In 2002, sales

were less than 1.6 million USD. In 2004, sales reached 16

million USD and in 2008, 160 million USD. In 2011, the sales

were 720 million USD and are expected to reach 3.2 billion

USD in 5 years and continue with 40% sales growth in the

next 10 years.

There are different applications for HPWH products in

the market, like home, commercial, and swimming pool use.

But sales mainly come from commercial use HPWH. The

problem existing for the application of HPWH in residential

buildings is that they need a large space for installation, and

the installation process is not as easy as gas or electric heaters,

and finally, there is HPWH‘s high sale price. However, Chi-

nese government has continued its support for HPWH be-

cause of its energy efficiency and low carbon dioxide emis-

sions. In 2009, the CHPA was founded. In 2010, the Chinese

government held a conference on the development of the

heat pump industry. In 2011, CHPA released its

‗Recommendation On Including The Air-source Technology

As Renewable Technologies‘ to push the government to

grant subsidies for products that use air-source energy.

On June 1, 2012, the ‗Implementation Regualtions For

Promotion Of Energy Efficient HPWH‘ was released, which

regulated that air-source HPWH would enjoy government

subsidies.

To meet the market‘s demand and in response to the

new government policy, Midea also supplied different home-

use hot water solutions for different residential buidings.

TECH SPOTLIGHT

By Amber Liu


17

PEOPLE

The Men Who Make the Magic

By Matthew Smith & Mandy Wang

T he building looks almost like a couple of massive anvils stuck together at a right angle, with employees and visi-

tors able to pass into the courtyard by walking underneath the giant sloping overpasses. It‘s such a futuristic looking complex

that one can‘t help but imagine that something from the future might be inside. As it turns out… this is actually true. This is

the Midea Research Institute, located in Shunde, China, and it was finally completed two years ago. It‘s not so new anymore,

but it is still a marvel to behold for the casual observer. Advances is visiting the Midea Research Institute this month to talk

with some of the engineers who are responsible for the magic

that goes into Midea‘s new and innovative product design.

The first person we spoke with as the Director of Overseas

R&D Center, Xu Hao:

Advances: Thank you for sitting down with us for a few moments to

have this talk. This facility is pretty breathtaking. What can you tell me

about it?

Xu: This R&D center was completed in October last year,

consisting of three departments under the Residential Air

Conditioning Division, in the Overseas and National R&D

department, which focuses on the product development, and

the Central R&D Institute, which is responsible for advanced technology research.

Advances: It is said that only 60-70% of the area has been used. What about the rest of the offices?

Xu: There are two buildings: the office and the experimental building. Midea has invested approximately 400,000,000 RMB in

these buildings, including procurement of the experimental equipment. Regarding your question, when the R&D center was

first designed, they fully considered the long-term, future demand and development of the company. Right now, there are 700

engineers, not including assistants. In the future, there will certainly be more.

Advances: The engineers worked in different buildings before moving here. What benefits do the new R&D center bring to them? How do you feel

the new facilities enhance the capacity for research and development at the company?

Xu: After moving in here, it is easier and more efficient for engineers to communicate and share information – it is more inte-

grated.

Advances: So, September is the technology month at Midea. Besides the Technology Month, are there other activities that Midea holds for R&D?

Xu: It is necessary for a big company like Midea to invest in science and technology. For engineers, this is very exciting and

motivating news. Knowing that the company will continue increasing R&D investments, they will be more active in pursuing

their goals. The Technology Month has been an annual even at Midea for 18 years. It is a time for Midea to present our R&D

achievements to the public. We also have other activities besides the Technology Month, such as the Innovation Fund and the

Outstanding Contributors Award.

Advances: Engineers and researchers are just like artists, developing and designing a variety of great products which provide us with conveniences. I

am always curious about where does the inspiration for much of the R&D come from?

Xu: Well, first of all, engineers have opportunities to know the market and keep in contact with our clients. This is the main


18

PEOPLE

The Men Who Make the Magic (cont.)

source of the information and inspiration; Secondly, engineers

also pay attention to trends and news in the industry and the

related industries; Thirdly, engineers also look for the weak-

nesses or potential weaknesses of our products and figure out

a way to enhance them.

Next we spoke with Kenichiro Sato, a Special Consultant

from Japan:

Advances: Thank you for sitting down with us to answer a few ques-

tions, Kenichiro. First of all, this is a fairly new complex and very beau-

tiful. How do you feel the new facilities enhance the capacity for research

and development at the company?

Sato: There is much benefit, but I mean it in a natural sense. There is a great amount of natural space here, unusual at most

research facilities. Also, an unexpected benefit is that I can hear the soft sound of the rain through the ceiling of my lab on

the top floor.

Advances: That does sound like a nice atmosphere to be working in, and yes, sort of an unexpected benefit, isn’t it? So what area of research is

the most exciting at Midea right now?

Sato: My project is exciting.

Advances: Well, of course, it would be your project, wouldn’t it? (laughing)

Sato: (laughing) My project has the most difficult challenge, I think—the

Full DC Inverter. Even in Japan, or in the world, this is the first time to

develop such a small, high-performance unit. This is the core of my re-

search here.

Advances: You must feel like you’re on the forefront of the industry with this. We’ve

certainly published a lot of news regarding Full DC Inverter products and technology in

Advances. Another question relating to your research – how do you feel about the fund-

ing for your research at Midea? The amount devoted the company devotes is about 3%

of total net income, if I’m not mistaken.

Sato: Really? That‘s a lot. But this is good. We need even more focus on

fundamental innovation to give our products a real edge against the com-

petition.

Advances: What makes this month more special than other months?

Sato: It‘s wonderful. In Japan, there is no such special month at any com-

panies I worked at. Here, we have many open, internal lectures given by

all departments, to share their technical developments with each other,

and perhaps create a synergy out of it.


19

PEOPLE


Advances: That sounds great. It’s a shame that it couldn’t happen every month – although I suppose that a lot of people wouldn’t be getting much

of their regular work done, then! So, as a final question, do you have any suggestions for Midea’s research and development?

Sato: Besides devoting more to basic fundamental innovation, we also need to continually improve process evaluation, to

facilitate process refinement. Every single step should be evaluated and improved, rather than an evaluation which focuses on

the final result only. This way, you can realize improvements which were not obviously missed before. And these step-level

improvements should be applied to every process when possible.

Advances: Even with only a short amount of time, you’ve given us a lot of insight into the work here. Thank you so much for your time, and it’s

been really nice to meet you, Kenichiro.

Up next was Ruan Zhaozhong, Manager of the Electric Control Design Department, in the Overseas Division of Research

Institute:

Advances: About Technology Month… are there any special activities for this event, which you can tell us about?

Ruan: There are a lot actually! In the past, April used to be the Technology Month, but it was changed to October in recent

years. Next month, there will be an awards ceremony to honor our outstanding engineers and researchers. Midea puts a high

value on this event. For example, a researcher received 1

million RMB last year. This is a lot of money compared to

what other companies in the industry would award their top

researchers and engineers.

Advances: What benefits did you perceive about this place after

moving into the Research Institute?

Ruan: This building conveys a symbolic meaning of the

importance of R&D for Midea. In the past, researchers

were separated in different buildings. Working in the same

building creates a better research environment for us. It also

creates a sense of belonging and pride in the researchers,

making them feel that Midea pays special attention to its

R&D effort. Besides, the buildings and facilities provide

better security system to protect our confidential infor-

mation and technology.

Advances: So the new buildings now become one of the motivations for researchers and it also shows Midea’s special attention to R&D. What

research field attracts you the most?

Ruan: First of all, energy efficiency. Current residential air-conditioners are doing very good regarding energy efficiency, but

we are looking to do better. Secondly, quality of health. Air-conditioners should enable people enjoy good, healthy environ-

ment, in addition to simply adjusting the temperature.

Advances: What about to developing air conditioners which can adjust the temperature without drying the air?

Ruan: That‘s a good suggestion. Running an air conditioner is a process of removing moisture from the air. We also thought

about this in the past and did some research on how to adjust the temperature while keeping the moisture in the air at the

same time, but this is still on-going.


20

PEOPLE


Advances: My final question is, how do you feel about the company’s research and development? Do you have any suggestions or advice for Midea?

Ruan: The working environment of the R&D center is open-minded. For instance, if my supervisor assigned me a task, he/

she does not have lots of specific rules for me to follow. I can enjoy so many freedoms regarding my research. I can do what I

want to, with few limitations. During our research, the company can provide us with many great resources and lab facilities to

help us complete the research.

And finally, we spoke with Ji Zhenqin, engineer from in the Overseas Division of Research Institute:

Advances: What aspects about this month are different from other months? Are there

any special events?

Ji: Well, This is the third year that I have experienced Technology Month.

I can sense the strategic transformation of the company this year compared

to the past two years. Right now our focus is on the improvement of prod-

uct quality and producing high-end products.

Additionally, Midea is increasing its investment in R&D every year. This

year, Midea invested 1 billion RMB for a project on improving overall

product quality. Quality improvement includes improvements in appear-

ance and performance technology. Ultimately, final products work much

better compared to our older ones.

Advances: What area of research is the most exciting at Midea right now?

Ji: Haha! I am curious about all areas that I am not familiar with!

Advances: Being in Midea for nearly three years, how do you feel about working

here?

Ji: It is quite good! Midea provides you with a lot of freedom to do the

research you want. My college classmates who works at another companies

cannot enjoy the same freedom as me. In Midea, even if you are a new

graduate, you are still given a lot of freedom to do research. Our supervisor

trusts us. But of course, we should push ourselves to always improve.

(Laugh)

Advances: We don’t want to take up so much of your time, but I would want to know in what ways do you think Midea is doing well, and what

areas still need to improve?

Ji: There are two aspects that are great: One, we have a very clear direction for R&D. Midea is focusing on quality improve-

ment very heavily this year. All researchers have a clear understanding about this and work on it consistently. Two, faster reac-

tion time to problems. Every time a problem comes up, Midea can react to it rapidly. Midea is now growing to be such a mas-

sive company from a relatively small one, which I think might be one of the reasons it can handle this. I also think this is a

result of having professional managers to run the company.

After our last interview, we had to let the experts get back to their work, and took a little time by ourselves to look

around and appreciate the aesthetics of the facility from the inside as well as the outside. The environment is so open and cre-

ative-feeling that we didn‘t really want to leave, but our own jobs were waiting for us back at headquarters, and so we finally

made our departure, with a greater sense of how Midea is becoming not just bigger in the industry, but better.

stepping out of the spotlight -...

Documents