Midea Gets Ready for a Whole New Year

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

VOL 2, #9, December 2012, No. 24

Midea Gets Ready For A Whole New Year

After Narrowly Escaping the Mayan Apocalypse, Midea Happily Looks Forward to a Prosperous New Year For All

1 www.midea.com Midea Advances Newsletter, December, 2012

Midea Advances Newsletter Contents

NEWSLINE Midea and Renowned Scien- Midea Brand Launched in tist Dr. Pingcheng Join Forces Argentina PAGE 14 Midea’s Washing Machine PAGE 9 Division Contributes Most WORLD SHOWCASE Over Past 20 Years PAGE 3 Midea Opens Garden Ter- race for Daily Employee Midea Shows Off at the 43rd Over 1.7 Million RMB Award- Breaks PAGE 10 ed at Washing Machine Divi- International HVAC&R Con- sion’s Science & Technology Full-DC Inverter Technology gress and Exhibition in Ser- Award Conference PAGE 4 Rated as International Lead- bia PAGE 15-16 er PAGE 10

New Midea-Drafted IEC In- MIDEA IN THE COMMUNITY ternational Standards Offi- FEATURE cially Adopted PAGE 5 Students in Ho Chi Minh City Carrier Midea India Launch- Receive Midea Subsidy Midea Pressure Cooker Wins PAGE 16 es First Wave of Products

Best Fashion Design Honor PAGE 11 PAGE 6 PEOPLE Midea Carrier ABC JV Cele- Midea MDV Elite Camp – 2nd brates First Anniversary Appliance Compliance & 3rd Sessions PAGE 7-8 PAGE 12-13 PAGE 17-19 Chinese Consul General in Midea CAC at the 2012 Asia Ho Chi Minh City Visits Midea SNAPSHOT ATW Technical Forum PAGE 9 Midea in Vietnam PAGE 13

Midea Advances Newsletter is published monthly Publisher: International Strategy Dept. by the International Strategy Department of Midea Group. We welcome all comments, sug- Managing Editor:

gestions and contribution of articles, as well as Matthew Smith subscribing our newsletter. You can reach us at: Mandy Wang [email protected] Correspondents: Midea Group Amber Liu Add.: Midea HQ Building, No.6 Midea Ave, Bei- Crystal Lun jiao, Shunde, Foshan, Guangdong P.R.C. 528311 Tony Miao Sue Ou Tel: +86-757-2360 4714 James Yu Fax: 86-757-2660 5455 Peck Zhao Blinda Li Shine Li Web: www.midea.com Calvin Yang Hui Yang

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NEWSLINE

Midea’s Washing Machine Division Contributes Most Over Past 20 Years

By Blinda Li

A t the 20th anniversary celebration for Wuxi New WND is now venturing forward on a new mission: Mr. District (WND) on November 18th, a total of 20 companies, Xu Gang, Member of the Standing Committee of the Wuxi including Midea’s Washing Machine Division, received hon- Municipal CPC, and Secretary of the Party Working Com- ors declaring them to be the “Top Contributing Enterprises mittee for WND’s Administrative Council, remarked that Over Past 20 Years”. Leaders from Jiangsu Province, Wuxi Wuxi will explore and engage in new development routes by City and WND were present at the ceremony and top leaders shifting from a manufacturing basis to one of innovation. from the central government sent messages of congratula- This is the target that WND aims to fulfill in its “12th Five- tions, all expressing appreciation for the contributions made Year Plan”, the period in which WND will be built into an by Washing Machine Division to the development of WND. innovative and service-oriented international location fea- WND was born out of the second series of hi-tech de- turing unique competitive advantages. velopment zones commissioned by China. Since its inception It is at this point in WND’s new undertaking where in 1992, WND now occupies an area of 220 square kilome- timing is essential for Midea to deepen its strategic transfor- ters, and has attracting more than 1,500 foreign-invested mation. Media’s Washing Machine Division will follow the companies, including 80 Global 500 companies. Its GDP has operating principles of “perfect products and improved exceeded 100 billion RMB; in 2011, it reached 110 billion quality”, making consistent effort to promote scientific and RMB. Its GDP per capita is already at 25,000 USD, based on technical innovation and transformation, as well as upgrad- the area’s registered permanent residents, which puts it at a ing and dedicating itself to becoming a world-class washing level of upper-intermediate developed countries, and has machine manufacturer. placed WND at the forefront of China’s hi-tech development zones.

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NEWSLINE Over 1.7 Million RMB Awarded at Washing Machine Division’s Science & Technology Award Conference

By Blinda Li

M idea’s Washing Machine Division (WMD) sented certificates and trophies to 7 winning teams in the hosted their annual Science & Technology Awards Confer- categories of “Technical Innovation”, “Manufacturing Pro- ence last month on November 26th, which boasted an at- ject”, and “Quality Improvement Project” and others, as well tendance of 200 people, consisting of prize winners and as individual winners of the honorary titles such as “Science prominent figures from various departments. Many activities, such as seminars, symposiums, skills contests, followed by evaluation and selection of “pursuit of excellence” projects, were organized by the Division. In this year’s science and technology promotion month, the Division fired-up staff enthusiasm for participation through its “Four Firsts” initiative, which involved introducing four new elements to the conference: awarding staff for technical breakthroughs, an industrial design competition, a brainstorming session for sales techniques, and a survey about products which performed unexpectedly or unsatis- factorily in markets. The Division tailored a set of 24 awards. Thanks to the prizes and support from Midea Prize winners receiving their awards at the Science & Group, winners received a record sum amounting to Technology Awards Conference. 1,714,000 RMB. & Technology Star”, “Pacesetter for Excellence in Science & Activities aside, there were five main speaking items Technology” and “Improvement Star”. Next, Su Gaofeng, on the agenda at the conference. It started with the annual the “Science & Technology Star”, Yin Peijie, the leader of working reports made by the heads of the research and the winning project team of the “Technical Innovation development, manufacturing, and quality departments, and Award” and Xiao Pingjie, the representative of the winning was followed by the announcement of the Decision of the project team prize of the Quality Award, respectively shared Washing Machine Division on the 2012 Science & Technology success stories and their experiences with those present at Award Conference, by the Director of Human Resources. the conference. Finally, the General Manager of Midea’s With thunderous applause, the leaders of the Division pre- Washing Machine Division summarized by analyzing the problems existing within the Division, expressing sincere hope for the staff engaged in research & development, stressing the importance of progress along the track of “science & technology innovation, quality improvement and precision manufacturing”, and emphasizing that adherence to operating principles is the key to realizing strategic transformation and improving the pattern of growth.

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NEWSLINE New Midea-Drafted IEC International Standards Officially Adopted By Calvin Yang

G ood news from the IEC (International Electro- Midea. technical Commission) - the four new clause modifications In the international market, most standards are relating to elastic structure technology (dynamic pressure drafted or initiated by experts from western countries, mean- cookers, IEC60335-2-15(Ed6.0)), drafted by Midea, were ing Chinese companies have to take a passive approach to finally published and officially rec- integrating with rules and ognized by the IEC. Word of the norms. Elastic structure adoption of these modified clauses technology was created in- was first reported on June 8, 2011, dependently by Chinese following the 83rd meeting of the innovation and adopted by IEC. the IEC, meaning that “This will bring us precious Midea now has the ad- experience for understanding inter- vantage to seize the interna- national standards. This has great tional market. The new rev- significance for Midea in the industry, setting a new prece- olutionary technology introduces significant advantages on dent in IEC history for a Chinese technician participating in pressure relief and minimizing blockage. IEC clause modification,” commented a senior engineer at

Midea’s Wuhu Factory Designated as Key Technology Enterprise for National Torch Program By Crystal Lun

E arly this month, Midea Wuhu Air Conditioning carry out the general policy of reform and opening to the Equipment Co., Ltd. was honored as “Key Technology En- outside world, to bring into play the advantages and poten- terprise” for the National Torch Program by Ou Donglin, tial of China’s scientific and technological forces, to promote Deputy Director of the Administrative Committee of the the commercialization of domestic technical achievements, Wuhu Economic Technology Development Zone, and Hua and to globalize new and high tech industries. Guoqiang, General Director of the Science and Technology This “Key Technology Enterprise” honor is recog- Bureau. nition of the successful industrial transformation of the The Torch Program, initiated in 1988 as a guidance pro- Wuhu factory. State and local governments plan to gram for developing new and high tech industries in China, provide support in market development, information was approved by the State Council and implemented by the sharing, capital flow, company management, and public Ministry of Science and Technology. The many purposes of service so as to promote regional economy develop- the program are to implement the strategy of "promoting the ment. development of the country with science and education", to

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NEWSLINE Midea Pressure Cooker Wins Best Fashion Design Honor

By Calvin Yang

B EIJING, November 19, 2012, Midea new model praise was given by the judge, but the market has witnessed pressure cooker, 12PSS509A, stood out from 600 candidates the success of Midea 12PSS509A. It was reported that since and was honored as the only “Best fashion designed award” it was launched into the China homeland market in the early in small domestic appliances in the 7th CHINA APPER- of this year, more than 240 thousand pieces has been sold ANCE DESIGN PATENT CONTEST. with a much high level price. It was proved by Midea that The annual industrial contest was organized by China the sales manager is considering to introduce to overseas State Intellectual Property Office. The contest judge com- market. We have plenty reason to believe that Midea mented on the product with the unique intelligent pressure 12PSS509A will be the super star of small appliance market control technology and easy interactive UI. Not only the in the year of 2013.

Potential buyers are checking out the 12PSS509A at the Canton Fair.

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NEWSLINE

Midea MDV Elite Camp – 2nd & 3rd Sessions

By Peck Zhao

O ver the months of October and November, Midea CAC held their second and third sessions of the MDV Elite Camp at Midea Headquarters. 34 Midea CAC distributors and consultants from Asia, Eastern Europe and the Middle East gathered over these two sessions for an enjoyable learning experience together. These seminars aimed to explain the main sales points of Midea’s commercial air conditioner products to all participants, especially concentrating on the VRF product launch, by highlighting its advantages in energy efficiency and installation flexibility, benefits for both owners and de- signers. Features such as the modulation technology on the Marketing Consultant Timothy Ivory gave an interesting explana- air-cooled chiller and the IMM (Intelligent Manager of tion about Midea CAC’s marketing strategy and support policies, Midea) control system were also discussed. along with an introduction to Midea Group and Midea’s CAC divi- CAC Marketing Director John Wei began the semi- sion. nars with a welcome speech, sharing moments from his 12 years of developing experience in the air conditioner global market, and explaining the background and purpose of the Sue Au from CAC Marketing gave a presentation setting up CAC’s MDV Elite Camp. about the full range of CAC’s available products, including the DC inverter/digital scroll VRF, air-cooled scroll/screw, water-cooled screw chiller, centrifugal chiller, air side termi- nal, rooftop package unit, split commercial unit, ATW heat pump water heater, precision air-conditioner, and others, which displayed to the attendees CAC’s ability to provide comprehensive solutions for customers who are very con- scious of energy efficiency. CAC Marketing’s Peck Zhao then gave an overview of the VRF market to all the participants, including 2011’s global market volume, market share by product, and the main factors affecting the air conditioner market. The most important point made was about the rise of VRF in the past 20 years, and especially the last 6. Zhao’s presentation The MDV Elite Camp establishes a good platform for the engineers wrapped up with figures for sales performance and the mar- and sales managers from Midea’s distributors to share their expe- ket position of Midea CAC in China and the world. riences and discuss marketing strategy together. Amber Liu from Marketing then joined Zhao in talking about the latest DC inverter and Digital Scroll VRF prod-

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NEWSLINE Midea MDV Elite Camp – 2nd & 3rd Sessions (cont.)

By Peck Zhao

ucts, the V4 Plus and D4 Plus, which provide a perfectly optimized cooling and heating system with the latest and most innovative technology. Marketing Manager Tony Miao finished the seminars by talking about the modular air-cooled chiller system and its modular design, with highlights of flexible installation and application, low initial investment, low operation cost, and standardized spare parts for fast and easy servicing. These seminars provide an opportunity for Midea to present products and policies to customers, and also shar- CAC Marketing Director John Wei began the seminars with ing market information and experiences amongst one an- a welcome speech, sharing moments from his 12 years of other. Attendees from each session remarked that building developing experience in the air conditioner global market, collaboration between Midea and its customers through and explaining the background and purpose of the setting up these sessions was extremely helpful and would make it CAC’s MDV Elite Camp. easier for both parties to achieve success

Midea’s Himalaya Series: The Most Popular Brand for Business Elites

By Crystal Lun

T his month, an award ceremony titled “2012’s ditioner Brand for Business Elites was revealed to be none Most Popular Brand for Business Elites” was held in Bei- other than Midea’s own Himalaya Series, a popular line of jing. The event was hosted by Osen (a media agency), and air conditioners in the China market based on the advanced co-sponsored by The Southern Metropolis Daily, The 21st full-DC inverter system. Century Economic Report, Sohu, Tencent, and several Midea’s full-DC inverter technology provides excel- others. At the lent performance in every aspect: minimum input power of climax of the only 30W, indoor noise level of just 20 dB(A), precise tem- ceremony, the perature control within ±0.2°, 150V ultra-low start-up volt- choice for Most age, low 1Hz running frequency, and a heating mode that Popular Air Con- operates in environments as low as -15°.

8 www.midea.com Midea Advances Newsletter, December, 2012

NEWSLINE Midea CAC at the 2012 Asia ATW Technical Forum By Sue Ou

T he Asia ATW (Air-to-Water) Technical Forum Rao finished his presentation by introducing Midea’s out- was held last month on November 17th in the Jumeirah Him- standing ATW technology which included the direct heat- alayas Hotel in Shanghai. The main topic was “Focusing On ing pressure type water tank, the outside-round type coil World ATW Development, Pushing For Sustainable Eco- and bottom type coil, the combo type ATW, the dual-core nomic Growth”. Government-related associations, firms and with double energy types, among others . experts in this industry were invited and engaged in extensive discussion about advanced technologies, new products and the latest policies. The head of Midea CAC’s ATW R&D Department, Dr. Rao Rongshui, announced that, thanks to the Energy Saving Subsidy provided by the government, product awareness and recognition of ATW is accelerating. In recent years, sales of ATW products have been expanding versus traditional heat pump products: according to the data, Midea’s ATW models reached 3.8 billion RMB in sales by the end of October.

Midea and Renowned Scientist Dr. Pingcheng Join Forces By Crystal Lun

E arlier this month, at the Refrigeration Research Master degree from M.I.T. and a Ph.D. from Stanford Uni- Institute, Midea announced its scientific alliance with famed versity. academic and scientist Dr. Pingcheng. Wu Wenxin, the Gen- Dr. Pingcheng has devoted his career to the scientific eral Manager of Midea RAC, Li Qiang, the General Director field of heat transfer, where his work has earned him four of the Domestic R&D Center, Xu Hao, the General Director top academic awards granted by American machinery, aero- of the Overseas R&D Center, and Zhang Zhi, the President space, and chemical engineering societies, including the pres- of the Central Research Institute, all attended the ceremony tigious Max Jakob Award. He is currently the only Chinese honoring this new partnership. scholar to have won four top international awards in engi- The event started with the signing of the Cooperation neering thermal physics. Framework Agreement between GD Midea Air Conditioning Equipment Co., Ltd. and Dr. Pingcheng. Midea executives and the celebrity scientist shared and discussed future research topics and cooperation involving key technology for RAC heat exchangers. Dr. Pingcheng, a member of the Chinese Academy of Sciences and a Professor at Shanghai Jiao Tong University, graduated from Oklahoma State University, along with a

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NEWSLINE Midea Opens Garden Terrace for Daily Employee Breaks

By Mandy Wang

S ince November, Midea employees at the head- Friday, the Midea Logistical Support Company offers vari- quarters have been enjoying ous sweet snacks, coffee and daily 30 minute breaks for milk tea nearby the entrance tea, coffee and snacks on to the garden terrace in Sec- the building’s 5th floor, tion A. In case people are where they now also have too busy to notice the clock, access to the building’s large the headquarters public an- garden terrace, which pro- nouncement system begins vides a relaxing, environ- playing music throughout mental space for people to the building to notify people socialize and get to know that break time has started. each other better. Everyone is welcome to vis- From 10:15-10:30 in it! the morning and 3:30-3:45 Staff gather in the garden terrace to chat together while enjoying provided snacks and drinks. in the afternoon, Monday to

Full-DC Inverter Technology Rated as International Leader By Crystal Lun

T he Eco Energy Project, organized by the Chi- na National Light Industry Council, and held on Decem- ber 6th, announced Midea’s full DC inverter as a leading international technology, as appraised by the Council’s authoritative experts. The appraisal was conducted via a thorough study of energy saving projects by seven experts from Xi’an Jiaotong University, Jiangnan University, Tsinghua University, South China University of Technology, China Household Electric Appliance Research Institute (CHEARI), and China National Electric Apparatus Re- search Institute (CEI).

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FEATURE

Carrier Midea India Launches First Wave of Products

By Shine Li

near future,” said Sachdev. C arrier-Midea India (CMI), a joint venture between Nearly half of CMI’s air conditioners will be manufac- Carrier and Midea, has been launching its first Midea brand tured at the 150,000 square foot CMI production facility at home appliances for the Indian market through the month Bawal in Haryana. It has a capacity of 700,000 units per year, of December. and has been manufacturing Carrier air conditioner units The launch consists of a range of residential air condi- thus far. The JV has already invested $30 million in its oper- tioners, microwave ovens, and water dispensers. To coincide ations and will be investing a total of $100 million over the with the launch, CMI has rolled out an advertisement cam- next five years. paign with the primary message being, “Bring Home Happi- CMI is aiming to become one of the top 3 brands in ness”. the Indian durables market over CMI’s Managing Director, the next 3-4 years. “We want our Krishan Sachdev, said that these growth to be sustainable, and products are positioned as the com- therefore we intend to take 3-4 pany’s mid-premium segment brand. years to reach this target. It may be At the moment, CMI is also tough, but it is certainly not undo- evaluating the potential for introduc- able,” assured Sachdev. ing other product categories into the Indian market. “We may bring in washing machines, refrigerators and a range of kitchen appliances in the

The launch attracted much attention in the local media, prompting plenty of coverage.

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FEATURE Midea Carrier ABC JV Celebrates First Anniversary

By James Yu

F rom November to December, Midea Carrier ABC made since the formation of the JV. JV celebrated its first anniversary since the establishment of The Midea Carrier ABC JV was established in 2011, the and over the past year, it has accomplished the massive un-

joint venture in Argentina, Brazil, dertaking of integrating two large and Chile (ABC). companies across the three adja- On November 20th, at the JV cent Latin American countries of headquarters in Canoas, Brazil, the Argentina, Brazil, and Chile. The JV President, Carlos Renk, along challenges lay not only in differ- with Vice President Li Xuezhong, ence of structure but also in differ- gave inspiring speeches to those ence of culture, and setting up gathered for the celebration, re- principles for differentiation in a marking on their sentiments and multi-brand system, by which appreciation for what was accom- there must be clear positioning plished throughout the JV’s first and business plans for each brand, year, followed by an inspirational with rules for product selection in ending, calling on the people of the each country. JV to continue their great work One of the exciting future oppor- throughout the coming year. tunities for ABC JV involves en- Similar celebrations were held tering the local markets for small in the JV’s Argentina and Chile domestic appliances. There have head offices, where the company already been product launches in Presidents for their respective this category in Brazil, and the countries, delivered messages of Midea brand finally came onto the congratulations and thanks to their market in Argentina in late No- teams for the great strides they had Li Xuezhong and Carlos Renk join forces to vember, with the same plan for extinguish a happily resilient anniversary candle. Chile in the near future.

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FEATURE

Midea Carrier ABC JV Celebrates First Anniversary (cont.)

By James Yu

First Year Timeline of Midea Carrier ABC JV

September 2011: Midea and Carrier appear as one company at the Febrava Fair in Brazil. November: Midea employee transfers from China join the joint venture offices. December: Official celebration held for the establishment of the JV. January 2012: Committee for JV formed, and final structure implemented. May: Product strategy meeting for product line of Multi-brand system June: Combined market share in air conditioners in Brazil reaches new high; Midea brand was introduced to the Chile market. July: Annual meeting in China between JV and HQ management teams. September: Chosen as CAC supplier for the Maracana stadium, a venue for the World Cup in 2014 and the Olympics in 2016. October: Product strategy meeting for 2013-2015 November: Launched new category of small appliances in Brazil. December: Midea brand launched in Argentina.

Chinese Consul General in Ho Chi Minh City Visits Midea in Vietnam

By Shine Li

O n November 23, the Chinese Consul General in Ho Chi Minh City, Zhai Leiming, paid a visit to Midea’s Vietnamese small domestic appliances factory, visiting the production lines, and holding friendly talks with the manager of Midea’s Vietnam branch. Zhai Leiming praised Midea as pioneers in the industry, pointing out that Midea has been actively developing its commit- ment to Vietnam and the Southeast Asia market in general. He expressed his appreciation for their hard work, and hopes that Midea would overcome the difficulties present in the industry lately. He also encouraged the company to continue as a shining example of modern Chinese companies, and promote Sino- Vietnamese economic and trade cooperation.

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FEATURE

Midea Brand Launched in Argentina

By James Yu

T his December, after careful consideration of mar- and tough restrictions often applied to foreign companies. ket research and thorough preparation, Midea Carrier ABC To do business there, many have had to rely on local compa- JV launched its first Midea-branded products in Argentina, nies to enter the market, through the OEM/ODM model. As one of the biggest manufacturers in the world, Midea has been involving in the Argentinian market for a long time, and until now, it was one of the major OEM suppliers in Argentina, with very good relationships amongst the local players in this market. Meanwhile, Carrier also occupied a pivotal position in the high-end air conditioner market, and during consideration of the ABC JV between Midea and Carrier, it was a great opportunity by the former to step into a mid-tier position in the air conditioner market as a key component of the multi-brand system employed by the JV. The newly-launched Lumia air conditioners were assembled by the JV production facility in Tierra del Fuego. For the brand’s first step into the market, the JV made significant investment, both above and under the line, and one example of this can be seen in the form of Argentina's most popular female hockey player, Luciana Aymar, who was selected to be Midea’s spokesperson, as her performance-based persona is a perfect match for Midea’s own identity as a young, fast, and strong player in its field.

One of Midea’s first advertisements in Argentina, prominently on display alongside a flow of traffic.

with the first being the Lumia series air conditioner, on shelves in all of the country’s top five retail chains. as attractive due to its large size and well-developed air conditioning market, Argentina has nevertheless been a difficult place for multinationals, due to high trade barriers

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WORLD SHOWCASE Midea Shows Off at the 43rd International HVAC&R Congress and Exhibition in Serbia

By Tony Miao

A s the main sponsor, Midea collaborated with its with a presentation about the VRF product lineup and their Serbian distributor to participate in the 43rd International application in various projects. HVAC&R Congress and Exhibition in Belgrade. The 43rd Todorovic Branislav, the most experienced professor HVAC&R International Congress is dedicated to current in the Serbian HVAC industry and the most reputable pro- topics in the broad HVAC&R field, primarily focusing on fessor at Nanjing University, gave praise to Midea; he ex- buildings as main energy consumers and the use of renewa- pressed his happiness to see the improvement of Made-In- ble sources and the most up-to-date products used in China products in recent years, in terms of product quality and competitive pricing. Midea is one of the world’s great- est producers of air conditioning, accounting for almost 10% of the global production of air conditioners. Branislav remarked that when he walks through Belgrade, it is inspiring to see Midea split-style air conditioners everywhere, and said that he hopes Midea’s commercial air conditioners can provide even better solutions to the HVAC&R global industry in the future. The second day of the conference was dedicated to the Student Program, which has already become a tradition at the conference, and is intended for students and those of the youngest working generation who have chosen to develop their career in the HVAC&R industry. Studies and reports written by participating students which concern the The family of Midea products shown at the International HVAC&R Congress and Exhibition in Serbia HVAC&R industry are accepted during this day, with the best ones to be published in a top industry journal and pre- HVAC&R systems. Midea exhibited the DC inverter VRF sented at international student conferences and meetings. and air cooled modular chiller in the exhibition. The super Miao and the commercial product engineers from Midea’s DC inverter VRF system which uses full-DC inverter tech- distributor gave a thorough explanation covering all kinds nology and IPLV (integrated part load value) up to 5.8, received much attention. Competing suppliers also showed their new technology and products, such as Samsung’s DVM plus IV and LV Multi V, Toshiba’s SMMS, and Daikin’s VRV IV. The organizer’s goal is to promote the exchange of information on new technology that addresses growing energy demand, as well as to present the most up-to-date architec- tural designs that conform to new thermal performance standards, which are the preconditions for truly energy effi- cient buildings. Tony Miao, Midea CAC’s marketing manager, represented Midea and its distributor at the conference

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WORLD SHOWCASE Midea Shows Off at the 43rd International HVAC&R Congress and Exhibition in Serbia (cont.) By Tony Miao

of air conditioning systems such as the refrigeration and for Serbia throughout the future. chiller systems. He talked about future trends for air condi- In the Serbian market, Midea split air conditioners and tioning solutions around the world, and pointed out VRF as VRF products were graded in surveys as highly recommend- a product for the future by way of its high efficiency, zone ed by all end users. Judging from attendees reaction to design convenience, and flexibility in selection, installation Midea’s products at this conference, Midea’s brand will likely and aftersales service. Midea’s VRF is widely employed in become even more appealing to those in the Balkan Asian and European countries and will be a good solution

PEOPLEMIDEA in the COMMUNITY Students in Ho Chi Minh City Receive Midea Subsidy By Shine Li

M any believe that China's Teacher's Day and May would fund four impoverished college students studying in Day, also known as Children's Day, is the same for teachers the university’s Chinese Department. across the world. In fact, each country has its own day to More than 300 college students were invited to attend honor teachers, and November the celebration. The representa- 20th each year is when Vietnam tive from Midea’s Vietnam celebrates its teachers. branch introduced the history This year’s Teacher’s Day and strategic planning of Midea in Vietnam will mark the 30th Group, and expressed the com- anniversary of this occasion in pany’s great desire to cooperate the country, and in honor of with and support the Chinese this moment, Midea graciously Department of Ho Chi Minh stepped up to help the students Normal University, including of Ho Chi Minh Normal Uni- sponsored internships and versity with a celebration of training events. Teacher’s Day. As Midea feels it Ho Chi Minh Normal Universi- is a civic responsibility to sup- ty’s Dean of the Chinese De- port the communities it operates within and relies upon, partment thanked Midea deeply for their generous support Midea’s Vietnam branch announced at the event that they of their students, both financially and in opportunities for employment.

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PEOPLE

Appliance Compliance

By Matthew Smith & Mandy Wang

ADV: First of all, Sophia, thank you so much for taking time to sit down with me, as I know you’ve been pretty busy re- cently. Over the past several months of working together, I know quite a lot about you, but a lot of our readers don’t – so could you introduce yourself? Sophia: Well, I’ve been here for five months, working to develop and implement a comprehensive set of compliance policies for our company. Before join- ing Midea, I worked in a law firm in the Netherlands for nine years.

ADV: Wow, the Netherlands… and now you are back in China! This is a huge change for you, both in location and career focus. How did you come to be working for Midea in China, from a law firm in the Neth- erlands? What was so attractive about the company for you to make this move? Sophia: Actually, I know Midea well from my previous work with them. Midea has a holding company in the Netherlands and back then, my firm helped them to establish this company and conduct its business. Through the course of this work, I got to know Midea and its people. Two of those people were Dr. Andy Gu and Armin Chen, both of whom I had a very pleasant working relationship with. After some time, Armin contacted me, saying that Midea was expanding internationally, and that the company wanted to strengthen itself with overseas expertise, who understand the language and culture of international business – so that was their side of it. What made this proposal attractive for me was largely because I am Chinese. I always wanted to return to China eventually, and I felt this was a good moment to try, because Midea is such a large company, and probably the largest private company in China. I see my role here at Midea as a good platform for me to develop my skills. And being Chinese, I also feel so proud to work for such a globally successful Chinese company, and to contribute my skills to its future success. So I see this as a perfect match.

ADV: Yes, the way you describe it, it sounds perfect. You have nine years of working overseas, and you speak Mandarin, English and Dutch (and Cantonese in the very near future, I think, haha!) In addition, you understand cultural and business differences between China and the western world. So it seems very ideal. Now that you are a true insider at Midea, as one of its employees, how do you feel about the people here? Sophia: Well… some are quite professional. Some… are not so international, speaking frankly, haha.

ADV: Haha, well, that’s true for a lot of companies here. You can’t expect everyone to be international - it takes time. So, speaking of being more international… your arrival here brought something new to the company: an area of business that

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PEOPLE

Appliance Compliance (cont.)

By Matthew Smith & Mandy Wang will enhance Midea as a company. Could you tell us about this? Sophia: Ah, compliance.

ADV: Compliance. Some people in China might not know what compliance is. Sophia: Yes. In China, if you discuss compliance, many people won’t understand at all. Outside of China, especially in Europe and North America, companies have a much higher awareness of this concept and the importance it holds.

ADV: Now, you said that you worked in a law firm before. Was your previous legal work the same as the compliance work you do now? Sophia: I do have a legal background. But what’s the difference between law and compliance? Not so long ago, company legal departments were concerned more with remedy procedures, legal disputes and contract review. Those are the major tasks. Even the legal department in Midea feels their primary challenge is mostly contract review and dispute resolution. But when a company grows, especially into international spaces, it is critical to pay attention to the issue of prevention. Knowing how to avoid problems is at least as important as knowing how to deal with them, likely more so.

ADV: So your addition to Midea means that the execu- tive management realizes the importance of compliance and precaution. Sophia: Yes, they’re very aware of the need for a proper compliance implementation at Midea. They understand that prevention is the better approach. So that’s why I am implementing compliance, not only in Midea in China, but also in the international joint ventures that we have with Carrier. I have to say that Carrier pays a lot of attention to compliance.

ADV: So actually, we are learning a lot about compliance from Carrier, as compliance is a new concept for most of us. Sophia: Yes, even for me, it is still a learning process, as I only worked in a law firm before, which only partially prepared me. Speaking of which, I am not the only new addition for our compliance efforts; Monique, our compliance manager, previously worked at Daimler in Guangzhou. We work together, developing a compliance

18 www.midea.com Midea Advances Newsletter, December, 2012

PEOPLE

Appliance Compliance (cont.)

By Matthew Smith & Mandy Wang framework for Midea. Carrier and Daimler have been international companies for so many years, so their compliance structures are already quite mature.

ADV: Carrier is a big player in just one of our main industries, while Daimler is not related at all. Obviously we cannot just copy and paste what we have learned from them. How do you transform the measures and policies to suit Midea? Sophia: You’re right, copy and paste won’t satisfy Midea’s needs. So we’re taking this one step at a time, making sure each step is the correct one. It will take a long time, and it is a great challenge, but we have our goal in sight.

ADV: Do we stay in frequent contact with Carrier in regards to developing our compliance framework? As we are based in China, and Carrier is based in U.S. and our JVs are in other countries, this must make things complicated. Sophia: Certainly. We have regular contact with Carrier via phone and email to exchange ideas. From time to time, they also organize lectures and seminars for us. For example, in September, the Carrier Head of Compliance came here to Midea Headquarters and gave us a presentation about their compliance framework, explaining the meaning of compliance, its importance, and how they developed their structure. It was immensely helpful for us. Later in March, we will probably meet with the Carrier people in Brazil to have a compliance review of the JV there. Every interac- tion with them regarding compliance is a learning experience for us.

ADV: After the lectures, seminars, and discussions, and all of the work you and Monique have completed in the past few months, how do you feel about progress you have made so far? Sophia: We really did start from zero. We are now in the process of drafting a company Code of Ethics, because we have so many companies outside of China. Within that task, we are now doing a full check of each company’s situation. Then we will decide how to proceed. One aspect we have seen with Carrier is their online, e-learning compliance program. Car- rier is using this service successfully, so we will also adopt this service for our employees, especially for the Carrier joint ventures and other overseas companies. To improve, more and more people at Midea need to be aware of compliance: What is it and why is it important. So we need to educate our people about this first. This is the first step.

ADV: Thank you so much for taking the time to explain this new and important aspect of Midea’s global business. I look forward to hearing more about it as you progress. Sophia: Without a doubt, you will! Communication and education, this is the goal. It was my pleasure to speak with you about it.

19 www.midea.com Midea Advances Newsletter, December, 2012

PEOPLEMidea SNAPSHOT

Tempting teatime treats on 5th floor at Midea Headquarters