VOL 2, #3, May 2012

www.midea.com Midea Advances Newsletter, May, 2012

1

NEWSLINE

PAGE 11

Advocating Energy Conser-

vation PAGE 9

VOL 2, #3, May 2012

Midea Board Voted as “Best

Board of Directors” for 4th

Time PAGE 2 FEATURE

Carrier Midea India partici-

pates in ACREX 2012 PAGE 12

IN FULL FORCE

Midea Refrigerator Introduc-

es New Products Project PAGE 7

NEWS BRIEFS

MIDEA IN COMMUNITY

Going The Extra Mile PAGE 14

Six Sigma Honorees In The

Sportlight PAGE 3

Midea Leads the Next Gen-

eration in the HPWH Industry PAGE 6

Express Yourself. Express Your

Idea. The MDV Central Air

Conditioner Design Competi-

tion PAGE 7-8 Midea Showcases Energy Effi-

cient Goods at China Refriger-

ation 2012 PAGE 13

CAC Kicks Off Its 16th Annu-

al Global Technical Train-

ing Session PAGE 4

Visionary Innovators Con-

test PAGE 5

Midea Earns Record Two

Spots On Leaders List PAGE 10


2

NEWSLINE

Midea Board Voted as “Best Board of

Directors” for 4th Time

I n May, the 8th Round Table Golden Awards cere-

mony, organized by the boards of directors of the largest

listed Chinese companies, was held in Beijing. At the con-

clusion of the ceremony, Midea‟s board was voted “Best

Board of Direc-

tors” for the

fourth consecu-

tive year.

For the

past 19 years

since it became

a publicly listed

company, Midea

Electric Appli-

ances has been

pragmatic and

focused on the

task of main-

taining rapid

development of

the company.,

and it has gained

great recogni-

tion for the high

returns it earned for investors. From 1993 to 2011, Midea

continued to be successful; its market capitalization grew

to 50 billion RMB, and the company paid a total of 6.7

billion RMB in dividends, of which, cash dividends

amounted to 4 billion RMB.

With high recognition by capital markets, Midea took

initiative to change the development of the by way of

product quality improvement and company process re-

form. According to past quarterly reports, the achieve-

ments from this change brought Midea a profit margin of

870 million RMB (an increase of 22.4% YOY), and an

overall gross profit margin of 20.4% (an increase almost

6%).

Currently, Midea owns the most complete industrial

manufacturing network for air conditioning, refrigerators

and washing machines. By leveraging its robust R&D plat-

form, Midea will continue to strengthen the technology of

its white

goods, drive

innovation and

sharpen its

competitive

advantage.

At present,

advances such

as Midea‟s full-

DC inverter,

intelligent

washing algo-

rithm, and dual

refrigeration

system/high

moisturizing

technology are

leading the

industry. Ac-

cording to the

statistics, Midea air conditioners have ranked number one in

air conditioner exports for seven consecutive years, and the

inverter air conditioner has been awarded sales champion

for three consecutive years. Midea central air conditioners

have ranked number one in the industry for four consecu-

tive years, and Midea refrigerators and washing machines

currently rank number two in the industry.


3

NEWSLINE

Six Sigma Honorees In The Spotlight

T he 2011 National Conference on Quality Tech-

nical Awarding and the 9th National Six Sigma Conference

was held in Changsha, China, between April 24 and 26.

There were over

200 enterprises

and 600 corpo-

rate representa-

tives attending

the ceremony.

As in recent

years, many of

Midea‟s business

units and pro-

jects were grant-

ed several differ-

ent awards.

The com-

pany‟s air condi-

tioner quality

management was

honored, with

Midea‟s compressor business unit awarded

the 2011 “Excellent National Technical Management En-

terprise” award, after previously winning the “National

Six Sigma Drive Enterprise” award in 2010.

Two projects in particular were bestowed with the

prestigious Six Sigma Excellent Project Award by the Chi-

na Association for Quality: the Lower Welding Rejecting Rate-

and the Promote Spray Finishing Daily Output.

According to a representative from Midea‟s air con-

ditioner section, Midea had already adopted the Six Sigma

management theory as far back as early 1999, but had not

officially adopted the Six Sigma management mode until

2005. Subsequently, Midea created a Six Sigma Product

Quality Control System, and educated a group of profes-

sionals to work with Japan-Toshiba and America-IR, to-

gether creating a series of product quality testing labs and

workshops.

Additionally, by launching over 80 black six sigma

projects and more than 400 green six sigma projects, Midea

receiving returns of over RMB500 million, and earned

both the “National Six Sigma Lean Project Award” and the

“International Six Sigma Lean Leadership Award” for the

third consecutive time.


4

NEWSLINE

CAC Kicks Off Its 16th Annual Global

Technical Training Session

F rom April 23rd to the 27th, Midea Central Air Con-

ditioner (CAC) organized the annual five-day Global Tech-

nical Training Session (GTTS) for their clients at Midea‟s

head office, with more

than 90 executives

from across the world

participating.

The session con-

sisted of two parts, and

essentially adopted a

“theory + practice +

visit” approach to the

training, with

knowledge courses,

followed by interactive

lectures and hands-on

classes, capped by a

visit to Midea‟s facto-

ries and the product gallery at the headquarters.

The first part ranged from the 23rd to the 25th, and par-

ticipants were familiarized with concepts in sales and market-

ing, industrial design, procurement, and handling new clien-

tele. It involved 35 attendees, from regions such as Europe

and Latin America, and for 25 of them, it was their first ex-

perience participating in the GTTS. Aside from introducing

participants to the companies, product lines and upcoming

products, the host of

the training session

added a lecture regard-

ing an analysis of com-

peting products.

The second half,

for advanced technical

training, ran from the

26th to the 27th, and

was aimed at clients

involved in installation,

maintenance and de-

bugging (IMD). Of the

54 participants, from

Asia, Middle East, and

Africa, 50 of them had already attended the GTTS in previ-

ous years. The IMD for the V4+, controller and internet

control software, etc, were the main topics for training in

this part of the session.


5

I n light of the rapid growing importance of intellectual property,

for maintaining competitive advantage, Midea Refrigerator Business Unit

held a Visionary Innovators competition this month.

The winners are determined by overall scores, which are calculated

primarily from a combination of the number of patent applications and

granted patents the candidate has been responsible for during their time

at Midea, in addition to other economic and social benefits they have

brought to the company.

Shao Yang, an engineer from the Refrigerator R&D department,

and Pan Shuwei, an engineer from New Technology Development de-

partment, were awarded the 2012 Midea Visionary Innovators award, out of

35 other qualified candidates with remarkably high scores. Shao Yang and Pan

Shuwei have the highest rate for patent applications and fastest achievement

transformation rate. Their comprehensive safety protection plans for technical

programs have also helped the company to amass a great amount of intangible

assets, while introducing significant economic and social benefits to the company.

The aim of this competition is to foster an environment of respect for

knowledge, intellect and creativity, and to strengthen employee awareness of intel-

lectual property protection.

Innovative Designs Compete in

Midea Arena

NEWSLINE

Visionary Innovators Competition

Novelty and practicality were aspects especially con-

sidered by competition judges. Using a fixed budget, one of

the designs solved an issue with

the imperfect balance of pressure

in an outlet pipe running between

the inside and outside of the re-

frigerator. Free-thinking design

competitions such as this allow

Midea employees to address design

challenges they feel are important,

and to receive full credit for the

significance of their innovative

work.

D uring Midea‟s “Intellectual Property Month”,

its Refrigeration Division held a competition within the busi-

ness unit to encourage staff members

to show off their most ambitious and

radical designs, as a way of sparking

innovation in the division. The direc-

tor of R&D was chosen to be the

team leader for this event, with all of

the personnel choosing to participate.

After 15 days of fierce competition,

seven out of forty designs stood out

amongst the others, and were honored

with different awards.


6

NEWSLINE

Midea Leads the Next Generation in the

HPWH Industry

T he first meeting for the

specialist association for heat pump

water heaters (HPWH), the Guang-

dong Heat Pump Water Heater Spe-

cialist Associa-

tion, commenced

on April 26th at

the Midea Head-

quarter building

in Shunde, sym-

bolizing a new

era of the HPWH

industry.

More

than thirty com-

panies are regis-

tered as initial

members of the

association.

Midea Central Air

Conditioner

(CAC) Group

was selected to be

the first director

unit of the com-

mittee, and Tian Mingli , GM of

Midea CAC, was chosen to be the

director. “Midea CAC was one of the

first manufacturers to produce

HPWHs in China, and has been al-

ways striving to produce HPWHs

with a goal of energy efficiency, low-

carbon, environmental friendliness,

and operational safety. In the future,

Midea CAC will perform its leading

role in this specialist committee and

help to promote the development of

the HPWH industry,” said by Tian

Mingli.

Compared to the traditional

water heater, the HPWH features

highlights of energy efficiency, oper-

ational safety, and environmental

friendliness, among others. In re-

cent years, Midea has been driving

transition in the industry from old-

style water heaters (electronic water

heater, fuel gas water heater) toward

next-generation HPWH units. At

present, there are more than 200

registered patents regarding HPWH

technology in China, and Midea

CAC alone holds more than half of

these.

Midea CAC is one of the first

HPWH manufacturers to develop,

produce and sell HPWHs. Accord-

ing to industry statistics, Midea

CAC has ranked number one in the

domestic HPWH market for four

consecutive years. In 2011, Midea

was the first and only company to

generate HPWH-related earnings of

over one billion RMB. In the past,

Midea employed its HPWHs to suc-

cessfully provide

premium facilities

and services to

several domestic

and international

competitions, in-

cluding the

Guangzhou Asian

Games, Shenzhen

Universiade, and

the FINA World

Championships.

The development

of the HPWH

platform needs

support from the

entire industry,

especially leaders

such as Midea,

commented Xie

Desheng , the sec-

retary-general of Guangdong House-

hold Electrical Appliances Chamber of

Commerce. As the leader of the

HPWH movement in China, Midea

CAC has actively responded to the

national advocacy for new energy de-

velopment, developing nine series of

HPWH product lines with more than

150 models that represent the most

advanced technology based on

HPWH, complemented by some of

the broadest marketing and service

networks in the world. All of this

equates to the most comprehensive

competitive advantage in the HPWH

industry.

Desheng Xie and Mingli Tian together held the ceremony


7

O n April 12, China Heating Ventilation Air Conditioner (CHVAC) and

the Chinese Association of Refrigeration (CAR), in association with Midea Central

Air Conditioner Group (MCA), together held the tenth MDV Central Air Condi-

tioner Design Competition opening ceremony in Beijing, attracting approximately

30,000 design applications.

In accordance with the global movement for low-carbon footprint living, the

host of the competition chose the theme of “Architecture with Life”, meaning to

Express Yourself. Express Your Idea.

CAC Competition

Midea Refrigerator Introduces New Products

Project

T his past April, Midea‟s refrig-

erator business unit held its 2013 New

Products Project initial meeting at

Midea‟s Hefei College. Administrative

committee fellows, senior leaders, and

R&D personnel attended, for a total

of 350 staff at the meeting.

At the outset of the conference,

the national sales and overseas sales

departments wasted no time in intro-

ducing this year‟s New Products Pro-

ject. Vice GM of Technology and

Quality, Shi Xiangzuo, gave a

speech indicating that the refrigera-

tor business unit would continue to

strengthen PLC procedures and im-

prove the product performance. In ad-

dition, plans to drive for more innova-

tive R&D and a commitment to study

successful enterprises, like Apple Inc,

were expressed.

The GM of the refrigerator busi-

ness unit, Wang Jianguo, ended the

meeting with a speech of his own. Mr

Wang analyzed the operational status of

the company, and implored the

R&D staff to focus on three im-

portant points: customers, manu-

facturing and transportation. He

also made a proposal that would

ensure adequate investments in

R&D and also for professionals to

share in the achievements of the

company.

National sales department is introducing 2012 new products project.

Vice GM, Shi Xaingzuo is giving a speech

Overseas sales department is introduc-ing 2012 new products project

GM, Wang Jianguo is giving a speech

FEATURE

NEWSLINE


8

FEATURE

MDV Central Air Conditioner Design Competition

Spectacular Design Competition Review:

The MDV Central Air Conditioner Design

Competition (Cont.)

1st 2nd 3rd 4th

Date: 2003.7~11 Theme: My Midea Life Participants: 1000 Location: Beijing

Date: 2004.5~11 Theme: Blueprint Your Space, Present Midea Life Participants: 3000 Location: Hanzhou

Date: 2005.5~11 Theme: Professional Design, Wonderful Experience Participants: 3000 Location: Hanzhou

5th

6th 7th 8th 9th

Date: 2006.5~11 Theme: Professional Design, Classic Master-piece Participants: 3000 Location: Hefei

Date: 2002.5~11 Theme: My Midea Life Participants: 1000 Location: Beijing

Date: 2008.11~2009.6 Theme: Professional Design, “Green” Innova-tions Participants: 3500 Location: Chongqing, Guangzhou

Date: 2007.5~11 Theme: Professional Design, Classic Master-piece Participants: 3000 Location: Changsha

Date: 2011.4~12 Theme: Architecture with Life Participants: 4007 Location: Chongqing

Date: 2010.6~11 Theme: Architecture with Life Participants: 3980 Location: Hangzhou

incorporate elements of natural living

in architectural design, to create a har-

monious environment while adopting

energy-saving and low-carbon fea-

tures. There are over 160 different

awards worth over 460,000 RMB,

more than any other similar competi-

tion in China.

The goal of the competition,

and that of MCA, is one and the

same: to inspire innovation for the

indoor space, and to promote environ-

mentally-conscious living. General

Manager of MCA‟s Business Unit,

Tian Liming, indicated that promoting

an energy-efficient and low-carbon

footprint supply chain is the key for

an enterprise to strengthen its core

competency.

“Through the help of MCA, the

spirit of the MDV Central Air Condi-

tioner Design competition can be

spread out to a greater extent and fur-

ther promote HVAC industry design,”

commented by Xu Wei, chairman of

HVAC.

Over the past ten years, the

MDV Central Air Conditioner Design

Competition has always produced an

abundance of excellent design pro-

posals, with many applied to thousands

of architectural projects. The following

will explore the history of the compe-

tition in more detail.


9

FEATURE

Advocating Energy Conservation

D uring the first quarter of 2012, there was a notable increase

in reform projects in China, all with the common goal of improved

energy efficiency. This marks a sea change initiated by all levels of gov-

ernment. To answer the demand created by this campaign, Midea is

advancing its product development toward ever greater levels of ener-

gy efficiency.

According to an official statement, the government is now plan-

ning to choose 40 pilot cities in which to implement a newly developed scheme for

energy conservation and enforcement. As laid out by the China Energy Conservation

Association (CECA), energy conservation for buildings refers to the renovation or

improvement of aspects such as building facades, HVAC equipment, furnaces, to

name a few. Representatives from CECA estimate that there are up to 47 billion square

meters of existing buildings requiring renovation, and of those, public buildings account for

almost half of the area.

Each city will be required to convert at least 4 million square meters of such public

buildings within two years, at an estimated cost of 400 billion RMB. Estimates also suggest

that this will require no less than 20 billion RMB in new central air conditioning equipment

alone each year to meet the scheme‟s requirements.

According to a recently released industry report from industry analysis firm Aircon in

2011, sales revenue for Midea CAC in 2011 was 7.46 billion RMB, an increase of 13.4%

YOY, placing it first in China. As the number one brand in the central air conditioner indus-

try in China, and with its standing record for environmental friendliness and energy efficient

features, Midea carries great confidence in its ability to provide such projects with the very

best solutions available in the air conditioning industry, to advocate and help propel energy

conservation projects such as this.

Most recently, Midea has developed the fourth generation for variable refrigerant flow

(VRF) systems —the full-DC inverter VRF. The new generation of Midea full DC inverter

VRF can save up to 25% more energy than an equivalent AC VRF. The energy efficiency of

Midea‟s full-DC inverter VRF far surpasses the national level competition. What‟s more, it

has adopted the new environmentally-friendly refrigerant R410A, which follows the specifi-

cations of the Restriction of Hazardous Substances Directive (RoHS).

In past years, China has made great strides in public building reformation, and Midea

CAC has been striving to contribute as much as possible to this movement. For its efforts, it

has received great recognition at the Shanghai Expo, Guangzhou Asian Game, Shenzhen

Universiade Game, Xi‟an Expo Park, and others.


10

NEWSLINE

Midea Earns Record Two Spots On Leaders

List

O n May 18th, the “2011 China Energy Conservation Leaders List” (here on in re-

ferred to as the Leaders List) announced that Midea would be the only company on the Lead-

ers List in more than one category: “room air-conditioning regulators” and “speed-control

room air-conditioning regulators”. Moreover, Midea has been listed more frequently on the

Leaders List than any other competing companies.

The Leaders List program is supported by the National Development and Reform Com-

mission, the Certificate and Accreditation Administration of the People's Republic of China,

and the General Administration of Quality Supervision, Inspection and Quarantine of the

People's Republic of China (AQSIQ), and is organized by the China National Institute of

Standardization, with the aim to promote development of energy efficient household appli-

ances and improve public awareness of energy conservation.

With further development in energy conservation projects, technology upgrading has

captured the industry‟s attention. Air conditioners, as high energy consumption products,

especially need improvements in efficiency by manufacturers.

After holding the top spots in national sales of inverter air conditioners and exports for

all air conditioners for three and seven consecutive years respectively, Midea has developed

an upgrade strategy for its air conditioners, in the shape of 8 new, distinct lines of full-DC

inverter air conditioners, for a total of 24 different models.

Midea full-DC inverter air conditioners can perform with as low as 30W in power con-

sumption, resulting in energy savings of up to 59%, making it the role model for energy effi-

cient products in the air conditioning industry.

Midea Galaxy D360 inverter air conditioners enjoy the highest position in the global

inverter air conditioner market because of their seasonal energy efficiency ratio of

7.36. (according to the GB/T 7725-2004 standard, the calculation of the energy effi-

ciency ratio is 8.45, using data from national authority test results.)


11

NEWS BRIEFS

GD Midea Holding Continues Performing Positive

GD Midea Holding Co.,Ltd [000527] recently released its financial report

for Q1 2012, with earnings of 17.75 billion RMB (the parent company ac-

counted for 0.87 billion RMB of this), an increase of 22.4% YOY. The

comprehensive gross margin reached 20.4%, an increase of 6% YOY. It is

an achievement since Midea introduced its strategic adjustments last year.

Midea Art Troupe Gives Moving Performance at Guangzhou Factory

This month, the Midea Art Troupe had their official debut, entertaining

the tireless employees at Midea‟s refrigerator factory in Guangzhou during its

peak season. Despite the simple stage construction, actors from the troupe

presented gorgeous dancing and a variety of other stunning performances for

the audience. With a passionate rhythm, the opening dance “Voice of Spring”

kicked off the prelude of the show. Some internal staff from the factory also

joined the show to perform select songs for the audience. For the final per-

formance, the actor Ge Nina ended the show with the song, “Wonderful

World”, with the audience responding in thunderous applause.

Midea and Tmall Have A Crazy Summer

Tmall, a B2C online retailer, collaborates with household appliance and

consumer electronics manufacturers to hold the annual Crazy Summer celebra-

tion. From May 7th through to the 14th, the first event of the celebration was

the Air Conditioner Carnival, held by Midea Air Conditioner Group and Tmall

together. As the first event of Crazy Summer, it attracted most of the attention

from the public, resulting in thirty thousand Midea inverter air conditioners

sold at extreme discounts.

Midea Collaborates with Suning to Achieve Double Sales

Midea and Suning signed a strategic partnership agreement earlier this

year . Midea estimates it will generate total sales of over 50 billion RMB via

the joint efforts. In March, Midea and Suning organized a sales event, which

resulted in a warm response from consumers. Midea and Suning in Shanghai

also held the “Air Conditioners Fest” in the first half of May, and shortly af-

ter, promotional sales for refrigerators in Shanghai stores before the peak sea-

son were well-received by customers. A representative from Suning comment-

ed that Midea and Suning would likely extend the promotional sales to allow

customers to further enjoy the great savings.


12

IN FULL FORCE

Carrier Midea India participates in ACREX

2012

C arrier Midea India (CMI) unveiled its first public exhi-

bition at ACREX 2012, South

Asia‟s largest and most prestig-

ious event for air conditioning,

heating, refrigeration and

building services. This year it

was held at Bengaluru from

February 23 to 25. In addition,

Carrier and UTC were the

Platinum sponsors for

ACREX 2012

During the three day ex-

hibition, CMI showcased its

residential range of air condi-

tioners for the season. The

new range of Kurve hi-wall air

conditioners was launched.

The energy efficient Estrella

range of Hi-wall and window-mounted air conditioners was

also on display along with X-Power Gold and the DuraKool

range of air conditioners

“Over the years, this platform has evolved immensely,

providing good exposure to participants and visitors. We

have received much positive response on our products, and

keen interest was shown by visitors who were curious to

know more about this joint venture.” said Krishan Sachdev

of CMI.

In its 13th year, ACREX

2012, South Asia‟s largest and

most prestigious event on air

conditioning, heating, refrigera-

tion and building services, drew

more than 300 exhibitors from

16 countries, who displayed

their products and services in

the exhibition area spread

across various halls at the Ban-

galuru International Exhibition

Center in Bangaluru. Equally as

impressive, more than 50,000

visitors comprising exhibitors,

partners, HVAC consultants

and engineering students net-

worked and learned during this three-day event.

The ACREX theme this year was “For a Greener To-

morrow.” Special attractions included „Prana,‟ a fully func-

tional, high performance, permanent exhibit for a greener

tomorrow. The convention also hosted concurrent work-

shops, technical seminars and panel discussions by interna-

tional speakers, including ASHRAE and ISHRAE (Indian

Society of Heating, Refrigerating and Air Conditioning En-

gineers) lecturers.


13

IN FULL FORCE

Midea Showcases Energy Efficient Goods

at China Refrigeration 2012

T he 23rd International Exhibition

for refrigeration, air conditioning, heat-

ing and ventilation, frozen food pro-

cessing, packaging and storage (also

known as China Refrigeration 2012) was

held from April 11 to 13, in the New

China International Exhibition Center,

in Beijing.

As the top-selling brand for Chi-

nese central air conditioning systems,

Midea showed off many of its techno-

logically advanced products and user-

friendly control systems at the show,

including a high efficiency two-stage

degrading membrane centrifugal chiller,

an all-inverter VRF with 72HP with the

highest capacity in the industry, an air-

to-water heat pump with the highest

national certification for energy effi-

ciency, a precision air conditioner, and

a 4th generation intelligent network

control system,

among many others.

All of Midea‟s

products are focused

on saving energy, in

tune with the compa-

ny‟s “creating a better

life” slogan, and their

commercial air condi-

tioner was demonstrated as an

industry leader in this aspect. The

unit uses the industry's first full

degrading membrane evaporator,

and is equipped with a third gen-

eration two-stage compressor. Its

IPLV is up to 6.25 (GB condi-

tions), and it is one of

the most efficient

centrifugal chill-

ers in the world.

The lowest IPLV

of this product

line is 5.4. Due to

its full degrading

membrane evap-

orator, the refrig-

erant charge vol-

ume has been

sharply reduced

by 50% , which

contributes to the unit‟s claim as the

industry's most environmentally friend-

ly water-cooled chiller. It comes in 6

basic modules (8/10/12/14/16/18

HP), which is the largest variety of

capacities in DC inverter VRF prod-

ucts.

Two-stage degrading membrane centrifugal chiller

The largest booth with 448m2 in this expo

72HP Super V4 Plus


14

Comments or questions? Would you like to subscribe? We’re eager to hear from you! You can reach us here at

[email protected]

MIDEA IN THE COMMUNITY

Going The Extra Mile

U nder the blazing sun on a hot May afternoon in Beijiao, volunteers from

Midea‟s various business units were riding bicycles along the 105 National Highway, in sup-

port of the charity known as, Riding for the Children.

On May 5th, starting at 1:00 in the after-

noon, volunteers gathered in front of Beijiao

Park to begin the trek to Shunde Children Wel-

fare Institute, a distance of 25 kilometers (15

miles). En route to their objective, the blue-

and-white- clad travelers stood out amongst

the stream of vehicles on the

highway. Some of the

motorists passing by them

felt supportive, cheering them on and even calling

out phrases such as, “Go, Midea!”

Two hours of endurance- testing exercise

later, the intrepid bikers finally reached their

destination. Upon their arrival, the children came

out with excitement showing on their faces, and

ran to give warm hugs to the participants. Volun-

teers enjoyed conversing with the children, asking them about their lifestyle at the institute,

as well as taking pictures, playing video games and watching TV with them. Finally the do-

nations, including items such as food and clothing, were distributed, much to the delight of

the children, who appeared touched by this support expressed by local community.

Documents

VOL 2, #3, May 2012