Advances Newsletter, July, 2014

Vol. 4, #6, July 2014, No. 40

MACC Gathers for New Jersey Conference

Midea America & Canada Corp held its 3rd annual sales conference

1 Advanceswww.midea.com Newsletter, July, 2014

ADVANCES Newsletter

Contents

Refrigerant AC Certified as NEWSLINE Fun Facts High-tech and Green PAGE 7 MACC Holds Sales Conference in New Jersey Midea Wins Zhuhai College The Early History of Air- PAGE 3 Bid PAGE 8 conditioning PAGE 12 Midea Gives 10 Million RMB Midea Included on Big Picture to the Poor in 1 Day PAGE 3 Leadership List PAGE 8 The Usefulness, or Lack Training for Graduates at Hidden Wind AC Wins Design thereof, of Learning Manda- Shunde Polytechnic PAGE 4 Award PAGE 9 rin PAGE 13 Midea CAC Wins African CAC Wins Thailand Airport Games Project PAGE 5 Idea Project Page 10 Idea of the Month: The Hefei Factory Embraces Photovoltaic Power Seriousness of Humour PAGE Automated Revolution PAGE 5 Generation Project in 14 Net Profit Growth of 45-60% Operation PAGE 10 People Forecast PAGE 6 Midea-Carrier Attends Kitchen Appliances Division ITIL Ideas Man PAGE 15

Wins National Quality Major Chile Expo PAGE 11 Certification PAGE 6

Factory Workers Enjoy Team Building Activities Page 7

Midea Advances Newsletter is published monthly Managing Editor: by the International Strategy Department of Midea Group. We welcome all comments, Kevin McGeary

suggestions and contribution of articles, as well as Regular Correspondents: requests for subscription to our newsletter. You can reach us by email at: [email protected] Anggie Cai Crystal Lun Address: Jack Zheng Cai Yu ADVANCES, International Strategy Department Tian Fangling Midea HQ Chen Minshan No. 6 Midea Road Lin Shan Beijiao, Shunde, Foshan, Liu Xi P.R.C. 528311 Benjamin Pena

Tel: +86-757-23270461

Web: www.midea.com/global

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NEWSLINE

MACC Holds Sales Conference in New

By Jack Zheng Jersey

partners can remain in full compliance with the regulations. In M idea America and addition, Midea also introduced its new dishwasher product line Canada Corp (MACC) held its and exhibited its newly developed Wi 3rd Annual National Sales -Fi connected air conditioner feature. Representative Conference Attendees were said to be impressed this month, with more than 30 with the strong growth of Midea in reps coming from all over the United States, the increasing North America to meet at number of product lines, and its MACC’s head office in New commitment to building a real pres- Jersey. ence in the United States, character- The conference was ized by improved Oracle systems. useful for providing an im- The overall feeling from those in portant explanation regarding attendance was that conference was new United States Federal both enlightening and a great team Regulations that will relate to building opportunity. home appliance energy consumption, and how Midea and its

Midea Gives 10 Million RMB to the Poor

By Cai Yu in 1 Day

Xu Shaohua led the proceedings, which have been held every M idea donated 10 year since 2010. Since June 30, million RMB (US$1.62 mil- 2010 Midea has donated 115 lion) on June 30, which is an million RMB to the poor and officially recognized day in needy in Guangdong. Guangdong for helping the The money mostly goes to the needy. A ceremony was held less developed rural areas of the in Sun Yat-sen Memorial Hall province and the poorest and in where a repre- most vulnerable people in those sentative of each organization regions. As of June 30 this year, in attendance was given a a total of 25.8 billion yuan had banner to show how much been donated in Guangdong as money it had donated. part of the program. Deputy Party Secretary of Guangdong and Executive Vice Governer

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NEWSLINE

Training for Graduates at Shunde Polytechnic By Tian Fangling

A camp for graduate recruits of Midea was held at Shunde Polytechnic from July 14-19. Around 1,200 new employees attended the camp in which they were initiated into the corporate culture of Midea and taught about the values, missions and responsibilities involved. Human resources boss Liu Jufeng was in attendance and commenced the camp with a speech explaining what the recruits had to look forward to and what was expected of them. He

Themes of the camp included “Midea’s Road to Interna- tionalization”, “Midea’s Market and Brand”, “Midea’s Product Quality” and “Midea’s Product Innovation.” This may make the whole thing sound a bit dull, but the training came in a wide variety of forms including learning the offi- cial Midea anthem, basketball matches and a micro movie making contest. This will hopefully have taught the recruits that it is not enough to devote their time and energy to the job. They are also expected to put their hearts into it.

gave an introduction to Midea’s future strategy and some of the challenges the company is likely to face in the coming years as it strives to become a leading global brand and promote potentially in- dustry-leading programs such as M-Smart. The camp consisted of two segments, the first being general induction and the second seeing recruits divided into their respective departments. Senior representatives of each department were in attendance. The general induction included lectures about the product line, technology, history of the company and other key knowledge. Even gradu- ates in non-science subjects are expected to have a decent understanding of the technology.

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NEWSLINE Midea CAC Wins African Games Project By Anggie Cai

refined its plans, offered tailored climate solution to the owner T he 11th All-Africa Games is to be held in Brazzaville, and ultimately stood out from the competition to win the pro- capital of the Republic of the Congo, next year. Thousands of ject. The success relies partly on the excellent installation and elite athletes from across the after-service provided by continent will then gather in Midea’s team and also largely Brazzaville sports center and owes to the persistence of compete in a variety of sport- Midea’s staff. ing events. The games are a Since its founding in 1999, huge media event and draw Midea CAC has kept improving spectators from all over the and upgrading. Now its prod- world. At this time the air ucts and service are of the high- conditioning facilities that est caliber. The winning of the serve the 84,000 square meter African Games Stadium Project stadium will have their mo- is another sports related coup ment in the spotlight. to follow on from the World To make it an inviting Cup. environment for all fans, the stadium management wanted to use high quality air condition- ers. Midea CAC worked closely with its distributors, repeatedly

Hefei Factory Embraces Automated Revolution By Anggie Cai

addition, laying out the logistics route, positioning the produc- A s its production output continues to surge, tradition- tion equipment and delivering the material accurately to the al distribution modes such as manpower, tractor and forklift can designated place all proved difficult. Realizing the information no longer meet the needs of Midea system between the logistics and produc- Commercial Air-Conditioning (CAC). tion lines also needs to be taken into ac- To handle its increasing needs, CAC is count. Because of these difficulties, the embracing automated technology. unmanned factory has not become a wide- In early May, the Engineering spread phenomenon. Department, along with the finance and The project team needed a detailed plan. logistics departments and the Produc- They visited and investigated a number of tion Workshop set up a special team factories to assess the possibility of un- aimed at achieving unmanned automa- manned operation. Then they reviewed tion distribution. It was decided to successful predecessors as well as the fail- choose W4 as the pilot line for this pro- ures and reasons why they didn’t succeed. gram. However, the way to design and This is a milestone, not just for Midea ,but make the material delivery car posed a particular challenge. In for factory production in China.

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NEWSLINE Net Profit Growth of 45-60% Forecast

By Chen Minshan

nology. In 2013 the company completed the development of M idea Group Co. Ltd published its forecast for the eight categories of intelligent product. This is expected to reach first half of the year on July 14 ahead of the publication of the 25 this year. Interim Financial Report before August 31. The holding compa- As well as M-Smart, B2C e-commerce is a huge priority ny is expected to see net profit for Midea. This has included the grow by 45-60% compared with opening of an online shop, lo- the same period last year. Net prof- gistics and the achievement of it is expected to be from 6.059 online to offline business inte- billion-6.686 billion RMB (US $ gration (O2O). Principles to 976,649,960 - 1.077 billion). Earn- follow include continued invest- ings per share are expected to be at ment in products and technolo- 1.44 yuan-1.59 yuan. gy, establishing a new cost ad- Central to the company’s vantage, intelligent manufactur- plans for 2014 are a new partner- ing, strengthening fine manage- ship with Alibaba and the embrac- ment, maximizing resource utili- ing of the Internet of Things. The zation, discovering new busi- latter is mostly manifested in the ness, and eventually entering the form of M-Smart, a program that top 2 in the industry could revolutionise people’s relationship with their home appli- ances by creating a “smart home” of integrated intelligent tech-

Kitchen Appliances Division Wins National Quality Certification By Lin Shan

ing quality management systems in the industry; the second saw M idea’s Kitchen Appli- one of the division’s teams certified as ances Division was awarded a major “highly trustworthy”; the third saw national qualification certification the same team awarded for outstand- correlation (QCC) after an evalua- ing quality management; and the tion that took place July 7-11. The fourth saw the team awarded as an event, held in Xining, Qinghai outstanding participant in quality con- Province, was also attended by other trol related activities. Chinese giants such as Haier, Liby The Kitchen Appliances Division Group, Geli and China Tobacco. A makes small products such as micro- total of 400 attendees were attend- waves, rice cookers and hobs as well ing and 100 QCCs were granted. as larger appliances such as dishwash- The Kitchen Appliances Divi- ers and ovens. sion won four certificates. The first was for having one of the outstand-

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NEWSLINE Factory Workers Enjoy Team Building Activities By Liu Xi

years by being M idea’s Shunde-based factory workers were treated taken to local to a range of outings over a period of a month to help relieve areas with a stress and build camaraderie. Activities included white water strong natural rafting and hiking with attendance at over 90%. and cultural histo- The workers were thanked for their hard work over the ry and being treated to group meals with dis- tinct local cuisine. This is part of a campaign by Midea to make its Shunde facto- ries more staff-centred.

Refrigerant AC Certified as High-tech and Green By Crystal Lun

As demand for environmentally friendly products increas- M idea R290 new refrigerant air es, R290 is considered as the most promising conditioner has been certified as authentic hi- new refrigerant, with fluoride-free, low-carbon, tech technology by the Guangdong provincial natural, effective, and many other advantages. It government. This proves that Midea is leading is not only consistent with the demands for the its competitors in environmental technolgy, phase-out of ozone-depleting substances under something that is likely to be reflected in the the Montreal Protocol, but also meets the re- market in the near future. quirements of the Kyoto Protocol on reducing Refrigerant R22 is still commonly used greenhouse gases. Moreover the reliability of in air conditioners in the Chinese market. This R290 has been approved after years of experi- is known for being environmentally unfriend- mentation. ly, producing greenhouse gases. For this rea- In 2011, Midea conducted the world's first exam- son, most air conditioners exported to Europe ple production line for R290 ACs with multilat- and North America in recent years have used eral funds from the United Nations. In Decem- the upgraded refrigerant R410a. Although it ber last year the project was completed and ac- doesn’t damage the ozone layer, R410a still cepted by the United Nations and related agen- produces greenhouse gases. cies. The model awarded was assembled on this line.

7 Advances Newsletter, July, 2014

NEWSLINE Midea Wins Zhuhai College Bid

By Crystal Lun

Beijing Insti- M idea RAC won the bid to supply up to 7,200 units tute of Tech- of air-conditioners to the Zhuhai campus of Jilin University on nology. This July 15. The first delivery was sent within 24 hours of the deal summer has being done. “The installation will be completed in 50 days seen RAC dou- weather permitting, in time for the new semester,” said a dean ble down on its from the campus. efforts to get In the same more university week, Midea campus pro- RAC also jects. won the bid The air-conditioners used in college dormitories are held to supply to a higher standard than those used in homes. Because they are 1800 sets of used by a number of people at the same time, the air condition- air- ers require a better cooling performance and higher energy effi- conditioners ciency. Being switched on and off more frequently also requires to the Zhuhai a better control system. Midea will also be expected to deliver campus of strong after-sales service. Midea Included on Leadership List

By Crystal Lun

ucts and excellent enterprises, to set a high standard in energy T he China Standardization Institute Energy Efficiency efficiency, and to promote social responsibility. Management Center announced its Importance is attached to 2014 Leadership List on July 10, and product intelligence and Midea Air Conditioning was granted user experience for this four awards, “Leadership of Intelli- year’s appraisal. With out- gence Household Appliance Enter- standing technology for prise”, “Leadership of Intelligence energy saving, Internet of Household Appliance”, “Leadership Things, PM2.5 removal, of Consumer’s Most Favorable turbo cooling and heating, Brand”, and “Leadership of Con- and low noise of only sumer’s Most Favorable Product”. 23dB, four types of Midea The appraisal was conducted split AC and six floor by the National Development and standing AC won the Reform Commission, involving air award. conditioning and refrigerators, wash- ing machines, and flat screen televi- sions. It is committed to award and distinguish qualified prod-

8 Advances Newsletter, July, 2014

NEWSLINE Hidden Wind AC Wins Design Award

By Crystal Lun

T he results of The Red Dot Award for design concept 2014 were released in July with Hidden Wind by Midea RAC industrial design center emerging victorious. TheRed Dot Award is an internationally recognised quality label for excellent design. Today, the Red Dot Award for design concept has grown to be the largest and most prestigious competition for design concept and prototypes worldwide. The award represents the values of imagination, in- novation and competitiveness. The evaluation process

focuses on originality, ecological impact and durability. This year saw 4,791 nominees from 60 countries. Winning a Red Dot augurs very well for a product’s performance in the market. Midea’s Hidden Wind is a conceptual air conditioner pow- ered by solar energy. It was given