CAC Wins Hotel Industry Oscarimg.midea.com/global/about_midea/publications/... · By Anggie Cai M idea Commercial Air-Conditioning (CAC) was awarded the Golden Pillow Award as China‘s

Advances Newsletter, November, 2014

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Vol. 4, #9, November 2014, No. 43

CAC Wins Hotel Industry Oscar

Midea CAC was awarded for its work in hotels such as the Suzhou Marriot


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ADVANCES Newsletter

Contents

Midea Advances Newsletter is published monthly

by the International Strategy Department of

Midea Group. We welcome all comments,

suggestions and contribution of articles, as well as

requests for subscription to our newsletter. You

can reach us by email at: [email protected]

Address:

ADVANCES, International Strategy Department

Midea HQ

No. 6 Midea Road

Beijiao, Shunde, Foshan, Guangdong

P.R.C. 528311

Tel: +86-757-23270461

Web: www.midea.com/global

Managing Editor:

Kevin McGeary

Regular Correspondents:

Anggie Cai

Cindy Cai

Jessica Bi

Lv Gang

Zhou Nan

Liu Peng

Nadia Mathias

NEWSLINE

CAC Wins Hotel Industry

Oscar PAGE 5

Midea Group’s Third Quarter

Revenue at $18 Billion PAGE 3

MID Awarded by Leading

Accounting Body PAGE 4

Factory Workers Hold Sports

Meeting during Rainstorm PAGE 6

www.midea.com

CAC’s Spanish Specialist PAGE 19-21

Big Picture

People

Idea

Idea of the Month: The

Advantages of Humanities

Majors PAGE 18

International Clients Attend

10th MDV Elite Camp PAGE 9

CAC Appears at Bangladesh

Roundtable PAGE 12

Smart Sports Branding PAGE

16

CAC Holds 21st Global

Technical Training Session PAGE 7

How Refrigeration Changed

the World PAGE 15

Fun Facts Welling Wins Technological

Progress Prize PAGE 11

Small Appliances Pull in 200

Million RMB on Single’s Day Page 11

Midea Unveils Its Own Spe-

cial Codfish Recipe in Brazil Page 13

App Launched in Brazil to

Help with Air Conditioner

Selection Page 14

Midea Liva Wins Top Market-

ing and Sales Award Page 14


3

Midea Group’s Third Quarter Revenue at $18

billion

M idea Group (000333) released its third quarter fi-

nancial report on October 22, revealing that revenue was at

US$17.8 billion, a year-on-year increase of 16.4%. Net profit for

the parent company was US$1.46 billion, a year-on-year increase

of 49.2%.

Earnings per share were US$0.35, a year-on-year increase

of 49.3%. At the same time, Midea increased its stake in Shunde

Rural Commercial Bank, working towards an offering that gave

Midea a stake of 9.4%.

Since 2011, Midea Group‘s strategy has involved stepping

up its

invest-

ment in

technol-

ogy and

focusing

on con-

sumer

experi-

ence. Its products have subsequently improved, causing profita-

bility to increase. From January to September, gross margin was

25.3% , a year-on-year increase of two percentage

points.

The operating profit margin was 10.44%, a year-

on-year increase of 2.2 percentage points. Parent com-

pany net profit margin was 8.21%, a year-on-year in-

crease of 1.81 percentage points. Profitability was at its

highest in the recent history of the company.

Midea Group CEO Paul Fang stated that the es-

sence of Midea‘s recent operations is the pursuit of

sustainable growth, to add strength to size and add

quality to quantity. It has chosen to develop and inno-

vate its technology and products. Through its organiza-

tion and personnel, Midea strives to build a culture of

innovation and become a thoroughly modern enter-

prise.

Midea has already invested US$130.87 million to

own a 6.33% share in Shunde Rural Commercial Bank.

At the same time, the bank became an equity investment

of Midea. When the offering was complete, Midea

Group‘s shareholding ratio went up to 9.4%.

Shunde Rural Commercial Bank is one of the best per-

forming banks in the local area. It is highly profitable and pro-

vides a handsome return on investment through dividends.

Through working with the bank, Midea expects to see a good

return on its investment. The two companies will also collabo-

rate in strategy going forward.

Wang Nianchun, chief appliances industry analyst at

Guosen Securities Company, noted the significant increase in

profitability of Midea Group in both large and small appliances.

Midea‘s rapid growth in the domestic market exceeded

market

expec-

tations.

Moreo-

ver, the

compa-

ny has

estab-

lished a

long-term mechanism of stock repurchases to show its confi-

dence in continued steady growth.

NEWSLINE

By Kevin McGeary

Wang Nianchun of Guosen Securities Company


4

MID Awarded by Leading Global

Accounting Body By Jessica Bi

C ertified Practicing Accountants (CPA) Aus-

tralia, one of the world‘s largest accounting bodies, held

its South China Anniversary celebrations in Guangzhou

on October 30 and Midea International Division (MID)

was delighted to be invited. Moreover, after a review by

CPA Australia in June and July, MID achieved (on be-

half of Midea Group) the prestigious status of a

―Recognized Employer Partner‖. It achieved this by

building up a tailored training and education program

to strengthen its financial employee‘s capabilities.

The achievement was down to a joint effort by

MID Human Resources and MID Finance Depart-

ment, who teamed up to fulfill the requirements needed

during the certification process. This status greatly im-

proves Midea‘s ability to attract top financial specialists

and is also good for current CPA Australia members

working at Midea: ―We recognize the investment Midea

has made in their global financial training scheme and we

want to provide the company with the opportunity to better

publicize this quality in the market place‖ said a CPA Austral-

ia South China office representative during the ceremony.

With this status achieved, MID is able to offer the fol-

lowing benefits to its employees:

Company sponsored CPA Australia study programs for

selected finance staff members (globally)

Tailored training together with internal experts & exter-

nal well recognized tuition providers:

General Financial Training (up to M2/P2 – Selected /

Finance Only)

Specialized Financial Training (for M3/P3 and above –

Selected / Finance Only)

Managerial Financial Training (for M3/P3 and above –

Selected / Non Finance)

Internal mentoring system for easier recognition of re-

quired practical experience hours

Enhanced career options for certified CPA‘s

As especially for accountants ―life-long learning‖ is a key

element of success, it is required by all CPA members that they

invest into their professional development a required minimum

amount of training time each year. By participating in the

Midea / MID internal training, CPA Australia members can

claim 40 CPD (continuing professional development) hours per

year for the duration of their employment with Midea Group or

MID.

For more information about the CPA Australia program,

the recognition for the practical experience requirement or the

CPD please contact MID HR – Jessica Bi

([email protected]).

NEWSLINE

Presentation of the “Recognized Employer Status Certificate from CEO CPA Australia Mr. Alex Malley (Left) to Mr. Rainer Kern (Right)


5

CAC Wins Hotel Industry Oscar

By Anggie Cai

M idea Commercial Air-Conditioning (CAC) was

awarded the Golden Pillow Award as China‘s Most Popular

Hotel Supplier for the third year in a row on November 3rd.

The event, the Oscars of China‘s hotel industry, was held in the

Sheraton Hotel in Xixi, Hangzhou in eastern China‘s Zhejiang

Province.

All of the top international hotel groups and management

corporations as well as

Asian hotel elites and

industry watchers had

representatives at the

ceremony. The evalua-

tion process for the

award is as rigorous as

any other in the indus-

try.

Midea CAC values its

relationships with the

hotel industry, so its

continued success at

the Golden Pillows is

a huge validation of its

policies. With its full

product range, elite R

& D team and com-

prehensive service, it

tailors itself to each ho-

tel and its cutting-edge

green technology has become famous in the industry. Clients

in-

clude Starwood Hotel, Intercontinental Hotel, Howard John-

son, Marriott Hotel,

Hilton Hotel, and

Wyndham Hotel.

CAC‘s recent hits

include ―MC series

Chiller‖ which adopts

the patented technolo-

gy named the full fall-

ing film technology and

incorporates the high-

est COP 7 in the indus-

try. It boasts the much

sought after AHRI

certification.

Furthermore,

Midea CAC offers

comprehensive air-

conditioning and hot

water solutions to the

hotels. It not only meets the various needs but also saves invest-

ment costs, operational costs and management costs. CAC now

hopes to replicate this success around the world.

Driven by high speed growth and a win-win approach to

doing business, Midea CAC has established strategic partner-

ships with real estate giants Vanke, Evergrande, Green Town,

Poly, CITIC and Country Garden. With the mutual collabora-

tion and backed by its strength and power, this augurs well for

the future of Midea CAC.

NEWSLINE

The Wanda Hilton in Sanya ,Hainan Province

The Chongqing Sheraton

The ceremony

The Golden Pillow


6

Factory Workers Hold Sports Meeting during

Rainstorm By Lv Gang

W hen workers at Midea‘s Residential Air-

Conditioning (RAC) factory in Wuhu, Anhui Province held their

annual sports meeting on November 8, heavy rain and strong

wind did not diminish the enthusiasm one bit. Despite the tem-

perature being only 5 degrees Celsius, workers gave their all in

the spirit of friendly competitiveness that RAC has long cultivat-

ed.

The competitors had to get up at 6 a.m. The sun had not

yet come up and it had been raining all night. It was the factory‘s

day off and the workers had been mentally preparing for this day

for

months. At 8:18, despite the cold wind and rain in their faces,

the workers stood to attention as the Inspection March, a tradi-

tional Chinese military anthem, was played to mark the begin-

ning of proceedings. Every employee, regardless of their status,

was either competing or watching from the stands.

There were in total 16 events for both men and women,

with heats held in the morning and finals held in the afternoon.

The weather became even more miserable as the day went on,

but this only added to the intensity. One female colleague

slipped and fell during the 100 metre race. However, she got up

on her own, refusing other people‘s help, and finished the race

with a smile to the cheers of spectators.

In some events the discrepancy in fitness and ability was

particularly noticeable (the men‘s 3,000 metre race saw one

competitor get lapped), but it was all about the competing and

camara-

derie,

and

that

com-

petitor

finished

the

race,

sprint-

ing on

the

final strait. When the medals and trophies were presented, the

name of the factory itself was chanted a lot more than that of

any individual.

This event has been held every year since 2011. It carries

the same motto as The Olympic Games of ―faster, higher,

stronger.‖ This principle is something that is hoped will rub off

on the factory itself.

NEWSLINE


7

By Anggie Cai

CAC Holds 21st Global Technical Training

Session

M idea

Commercial Air-

Conditioning

(CAC) held its

21st Global Tech-

nical Training

Session over the

past month. It

was my honour to

host the first

round on Octo-

ber 29th - 31st for

the second time.

The second

round was held

from November

3rd – 5th. Both

rounds are well

worth an intro-

duction.

The objective of the training seminar was to strengthen mutual understanding between Midea and its customers, ulti-

mately leading to im-

proved cooperation. The

first day mainly involved

product presentations

and visits to Midea

CAC‘s showroom, facto-

ry and laboratories.

On the morning of the

second day, the product

presentations continued

and then in the afternoon

all participants went to

Panyu, Guangzhou, a

short drive away to tour

the Baomo Garden. The

garden is a masterpiece

of southern Chinese

landscaping and architec-

ture. The garden was

built in the late Qing

NEWSLINE


8

CAC Holds 21st Global Technical Training

Session (Cont.) By Anggie Cai

Dynasty (1644-1911) to

honour Lord Bao Zheng

of the Song Dynasty (960

- 1279 AD) and is one of

the most stunning scenic

spots in the area.

The third day saw a

complete change of tone.

All present customers

were given an examination

on both Midea VRF prod-

ucts and Chiller products.

The aim of the examina-

tion was to test the prod-

uct knowledge of the at-

tendees and help them to

better know about CAC,

all in the name of fun of

course. Later in the after-

noon it came to the part

of exam reviewing and

the training certificate

awarding. The three

days were also packed

with lectures and activi-

ties.

Global technical train-

ing sessions organized

by Midea CAC are a

good way of promoting

Midea products and

bringing international

clients to our headquar-

ters and the local area.

The experience can

strengthen customers‘

belief and confidence in

Midea as a company

they can collaborate

with for years to come.

NEWSLINE


9

By Anggie Cai

International Clients Attend 10th MDV Elite

Camp

T he tenth Midea Commercial Air Conditioning (CAC)

MDV Elite Camp concluded on November 13th with a trip to

Chimelong International Circus in Guangzhou. The trip to the

world‘s largest permanent circus was an appropriately feel-good

way of rounding off the international event.

The session commenced with a speech made by interna-

tional marketing specialist Javier Romano followed by a brief

welcome speech delivered by Mr. John Wei, marketing director

of Midea CAC. Present at the camp were customers from Tur-

key, Georgia, Poland, Czech, Iran, United Arab Emirates, Philip-

pines and Thailand. Attendees included project managers, sales

managers, marketing directors, sales directors and even directors

and chief executives.

The first day mostly involved VRF product presentations

and visits to Midea facilities. International attendees were partic-

ularly impressed by the exhibition center and history museum at

the group headquarters. As well as this introduction to the

Group, visitors were given a tour of CAC‘s own engine room in

the basement where Midea heavy chillers are installed. They also

NEWSLINE

Group photo

A seminar

Seeing product samples at the Group headquarters

A visit to the history museum


10

International Clients Attend 10th MDV Elite

Camp (Cont.) By Anggie Cai

visited CAC‘s showroom, factory, laboratory and warehouse.

On the second day, presentations were given on Midea

CAC VRF and chiller products, support and service, comparison

between Midea VRF and competitors‘ and product development

plans. Apart from presentations, there was a feedback question-

naire on the training seminar and certificates were awarded to

participants. On both of the first two days, around twenty

minutes were set aside for question and answer sessions. These

sessions were particularly lively as customers tried to learn more

about the products and the market.

On the third day, all attendees visited the site of a project

in Guangzhou and had time to go shopping on Beijing Pedestri-

an Road. Things wound up with the trip to the circus in the

evening.

Established in 2012, Midea CAC MDV Elite Camp has

been held 10 times and continues to grow. It is an open plat-

form for engineers and sales managers from Midea distributors

and agents to gain knowledge of Midea products and services

and to share opinions and ideas on market trends and products.

Through the seminar, the members are able to give appropriate

product proposals for projects with decent knowledge and ex-

perience in the field of heating, ventilation, and air conditioning.

NEWSLINE

In CAC’s engine room

On the rooftop

Day out in Guangzhou

Shopping on Beijing Pedestrian Road


11

Small Appliances Pull in 200 Million RMB on

Single’s Day By Zhou Nan

M idea sold 200 million RMB (US$32.5 million) worth

of small appliances online on November 11, a day that has be-

come known as Single‘s Day and is chiefly characterized by a

splurge in online shopping.

Midea was the only appli-

ances brand to achieve such

a figure.

Founded at Nanjing

University in the 1990s,

Single‘s Day is celebrated

on the date with the most

uses of the digit ―one‖. As

more young people cele-

brated the date and China‘s

middle class grew exponen-

tially, companies began to

see marketing opportunities in the date. The term " 双十

一" (meaning "Double 11") was trademarked in China by Aliba-

ba Group on Dec 28, 2012 under registration numbers

10136470 and 10136420.

This year saw the biggest Single‘s Day yet for online shop-

ping. Taobao and Tmall, both subsidiaries of Alibaba, made a

combined total of 57.1 billion RMB.

This was a 57.7-percent increase from

last year‘s 36.2 billion yuan.

Midea was aware of this opportunity

but also conscious that, as consumer

sophistication increases, good brand-

ing is important. The strategy this year

was named the ―Five Qualities.‖ The-

se were abundance (of available prod-

ucts), speed (of delivery), quality (of

service), reasonability (of prices) and

authenticity (of quality and durability).

Midea‘s deep understanding of the

domestic market helped it stand out once again.

NEWSLINE

By Liu Peng

Welling Wins Technological Progress Prize

W elling Holding Company, which is owned by

Midea Group, was awarded the China Home

Appliances Technological Progress Prize at the

2014 China Household Appliances Technical

Conference in Shanghai in November. It was at

the Air Conditioner Technology Session that Dr.

Chen Jintao of the company‘s Research and De-

velopment Department collected the prize from

Wang Lei, deputy director-general of the China

Household Appliances Association.

Welling, the only electric motor manufac-

turer to win the prize, has been revolutionizing

core manufacturing technology by introducing

―separate cores‖, Dr. Chen told the conference. The motor

efficiency is 1-3% higher than the industry benchmark.

The prize is the most

prestigious of its kind in

China. The selection

process involves the

assessment of thousands

of research and develop-

ment projects, according

to Wang Lei.

Welling Holding has a

more than 30 percent

market share and an

annual production ca-

pacity of 220 million units.


12

CAC Appears at Bangladesh Roundtable

By Cindy Cai

M idea

Commercial Air

Conditioning

(CAC) attended the

6th ARCASIA

Roundtable on

Sustainability in

Architecture and

Construction in

Bangladesh on

September 26th –

27th. More than

1100 attendees from the field of construction and related indus-

tries were

at the

event

which was

hosted by

the Bang-

ladeshi

Institute

of Archi-

tects.

The key-

note

speeches were delivered by Ar. Eric J. Cesal. CEO of Architec-

ture for

Humanity,

USA, and

Ar. Dr.

Ken

Yeang,

Principal

of T R

Hamzah

and

Yeang,

Malaysia.

Pro-

viders of heating, ventilation, and air conditioning (HVAC)

equipment play a key role in reducing pollution. For this reason,

CAC sent

consultants

and engineers

as well as

local distribu-

tors.

At its

12 square

meter stall,

Midea CAC

displayed

Midea V5X

VRF ODU and IDU, had distributed leaflets and catalogs of

D4+ and

V5X VRF.

Midea VRF

leaflets

were given

out with

the gift

bags, help-

ing to pro-

mote Midea

as a green

brand. A

VRF adver-

tisement was published in the official brochure for the event.

NEWSLINE


13

Midea Unveils Its Own Special Codfish

Recipe in Brazil By Nadia Mathias

C elebrity chef Edu Guedes, Midea‘s brand ambassador

in Brazil, has introduced a special recipe to be prepared on the

Midea Liva microwave-oven. The codfish dish, known in Portu-

guese as bacalhoada, is light and healthy as well as tasty and takes

just a few minutes to cook.

Midea‘s first line of microwave-ovens manufactured in

Brazil, the Midea Liva, has five models available on the market.

These include the 20-liter mirrored and white, the 25-liter with

grill and the 30-liter, with and without grill.

It boasts some striking functions including ―Lighter‖,

which is used for reducing the calories in a dish, and ―Easy

Clean‖, which allows

the user to clean the

microwave without

chemicals simply by

placing a glass of wa-

ter containing a slice

of lemon inside before

heating it.

There are also

pre-programmed reci-

pes for children‘s dish-

es called the Kids

Menu. It is available in

the 20-liter mirrored,

20-liter white, 30-liter

with grill and 30-liter

white models.

You can watch a

Portuguese video of the

recipe being put togeth-

er on the brand‘s YouTube (https://www.youtube.com/watch?

v=IwT9TVL_-mY&feature=youtu.be).

Bacalhoada (Codfish Dish)

Ingredients

2 medium-sized potatoes cut into thick rings.

1 mug of water.

4 cabbage leaves.

400g of desalted codfish fillets.

2 tomatoes cut into thick rings.

2 red onions cut into thick rings.

1 small red pepper cut in pieces.

½ cup of green olives.

¼ cup of dry white wine.

½ cup of olive oil.

½ cup of parsley.

Add the amount of salt that you choose

Yield: 2 servings

How to prepare

Put the potato rings, 1 cup of water in a dish and cover

with a plastic film. Place

it in the microwaves

oven for five minutes.

In a serving dish of ap-

proximately 20X20 cm,

place the leaves of cab-

bage at the bottom, cov-

ering the whole area.

They will preserve the

moisture of the ingredi-

ents. Alternatively, go

on placing the codfish,

the pre-baked potato,

the tomato, the red on-

ion, the red pepper and

the olives over the cab-

bage leaves. After every-

thing is settled, add the

wine, the olive oil and the

salt, if necessary. Cover

everything with plastic film and place it in the microwave oven

for another 10 minutes.

Tip: Remove the plastic and leave the recipe for another

five minutes in the grill function. When completed, the dish will

appear as pictured.

NEWSLINE

The bacalhoada codfish dish


14

App Launched in Brazil to Help with Air

Conditioner Selection By Nadia Mathias

M eu Midea, an app recently launched in Brazil, helps

the consumer decide the best location both aesthetically and

practically to place an air conditioner in

the home. The smartphone app also

helps the consumer pick an appropriate

size for their air conditioner.

The application also includes the

full line of the Midea Liva microwave-

ovens and the launch of joint venture

Midea-Carrier‘s Springer brand, the

Springer Split air conditioning.

The Midea Eletrodomésticos app is available for

smartphones or tablets that use the Android (version above 3.0)

and iOS (above 6.0) operational systems. ―Our brand is fresh,

user-friendly and innovating. That is why we develop products

with the highest technology and we also use all the possible fea-

tures so that the consumer has an interactive experience with

our products before purchasing‖, said Post-Sales Marketing Di-

rector Henrique Mascarenhas. With this application, it is possi-

ble to explore the functions of the new Midea Liva air condi-

tioning and also check how the device is going to look in the

house.

The application is very easy to use: position the ad –

available for printing on the website (http://

www.mideadobrasil.com.br/pt/downloads/resultados/

todos/11/0) – in the place where you plan to put the air

conditioner. Then, open the application in your

smartphone or tablet and position the screen viewing

the device. There, the air conditioner appears in real

time, as if it were installed in place. Further, you can

select the device‘s capacity to have an idea of how much space

that the air conditioning would occupy.

Another feature available at the Midea website is the

‗sizer‘ (dimensionador). It helps the consumer choose the ideal air

conditioning model for their individual needs. All you have to

do is access the website (http://www.mideadobrasil.com.br/

dimensionador/) with information of the room in the house

where you intend to install your purchase to see the list of the

most appropriate devices.

NEWSLINE

Midea Liva Wins Top Marketing and Sales

Award By Nadia Mathias

M idea Liva, with its consumer-focused innovation,

was one of the winners at the 2014 Top of Marketing and Sales

Associação dos Dirigentes de Vendas e Marketing do Brasil (ADVB)

Awards, the highest accolade of its kind in Brazil. The brand‘s

first microwave-oven manufactured in Brazil won in the innova-

tion category. The award ceremony took place on November

27th at the Bourbon Country Theater, in Porto Alegre after

thousands of professionals selected the winners.

The (ADVB) award has existed for more than 30 years and

acknowledges companies that have excelled in marketing and

sales strategies. Launched at the beginning of 2014, the Midea

Liva microwave ovens line was developed to fulfill the specific

needs of the Brazilian consumer. The company invested R$5

million (US$1.99 million) in product development.

―The design was developed with a clear vision of visual

language and functions, passing through different forms of re-

search regarding the habits and preferences of consumers,‖ said

Product Marketing Manager Rodrigo Teixeira The launch coin-

cided with the opening of a new manufacturing unit in Brazil to

make the products competitive in a crowded market.

To assure the product‘s success, the launch targeted retail-

ers, distributors and the press as well as ordinary consumers.

The last stage started in October with a national media campaign

fronted by celebrity chef Edu Guedes.

The Top Marketing and Sales award from the ADVB

acknowledges the bond Midea has created with the Brazilian

consumer, bringing to the market a product with smarter func-

tions, easy to clean, power efficiency and innovative design, all

for a reasonable price.


15

Fun Facts: How Refrigeration Changed the

World By Kevin McGeary

N owadays, the chance to enjoy fruit that is out of

season, imported meat, and chilled wine every day is something

that many who don‘t consider themselves rich can take for

granted. The modern household refrigerator has created an un-

precedented distance between food consumption and food pro-

duction.

The introduction of refrigeration to farms, pioneered un-

der U.S. President FD Roosevelt in the 1930s, has resulted in

new food sources being available to entire populations. Refriger-

ation has also made it possible for entire cities to be built in

hitherto unsustainable territories.

The yakhchal ("ice pit" in Persian) is a type of refrigeration

invented in Persia around 500 BCE. Its structure was

formed from dome-shaped mortar which was resistant to

heat transmission. Snow and ice was stored beneath the

ground, allowing access to ice even in hot months and al-

lowing for prolonged food preservation. Refrigerators are

still called yakhchal in Persian.

Before the invention of modern refrigeration, icehouses –

which were placed near freshwater lakes or packed with

snow and ice during the winter – were common. Such ware-

houses were built in Seoul, Korea in 1396. The buildings

housed ice collected from the Han River each January. The

warehouse was well-insulated, providing elite families with

ice into the summer. The warehouses were closed in 1898

but the buildings are still intact.

The history of artificial refrigeration began when William

Cullen, a professor of medicine at Glasgow University, de-

signed a small refrigerat-

ing machine in 1755.

Cullen used a pump to

create a partial vacuum

over a container of di-

ethyl ether, which then

boiled, absorbing heat

from the surrounding

air. The experiment cre-

ated some ice, but had no practical application at that time.

In 1805, American inventor Oliver Evans described a

closed vapor-compression refrigeration cycle for the pro-

duction of ice by ether under vacuum. In 1820, British sci-

entist Michael Faraday liquefied ammonia and other gases

by using high pressures and low temperatures, and in 1834,

American expatriate to Great Britain Jacob Perkins built

the first vapor-compression refrigeration system. A similar

attempt was made in 1842 by physician John Gorrie who

built a working prototype, but it was a commercial failure.

By the 20th century, refrigeration technology, particularly

the refrigerated train, made it possible for cities such as Las

Vegas and Houston to be established in territories that had

no natural channel of transport. The rise of the automobile

was another major factor.

Refrigerators from the late 1800s until 1929 used the toxic

gases ammonia (NH3), methyl chloride (CH3Cl), and sulfur

dioxide (SO2) as refrigerants. Several fatal accidents oc-

curred in the 1920s when methyl chloride leaked out of

refrigerators. Three American corporations launched col-

laborative research to develop a less dangerous method of

refrigeration; their efforts led to the discovery of stable

nonflammable moderately toxic

gases or liquids known as Freon.

In just a few years, compressor

refrigerators using Freon would

became the standard for most

domestic kitchens. The environ-

mental hazard caused by using

Freon would only become ap-

parent much later.

Now, those of us who lack gar-

dens to grow vegetables or raise

animals can enjoy a much more

diverse diet than our ancestors

did for a fraction of the effort.

Fun Facts

William Cullen

The 1933 Electrolux Servel Model


16

The Big Picture: Smart Sports Branding By Kevin McGeary

N owadays, the amount of money generated by

sports makes a nonsense of the cliché: ―It‘s only a game.‖ Such

is the exposure that a commodity or brand can get through

sports that the National Football League (NFL) in the United

States is set to charge whoever performs the halftime show at

the next

Super Bowl

for the

privilege.

Bruno

Mars‘ per-

formance

early this

year

amounted

to a 12-

minute ad-

vertisement

of himself when a 30-second advertisement during this year‘s

Super Bowl cost US$4 million.

How did this come to pass? Joe Maguire, author of

―Power and Global Sport‖, insists that the British Empire is the

main cause. Wherever sport grew fastest in the 19th century,

Maguire argues, it was because either the British exported it or

influential people had visited Britain. Maguire identifies five

main growth spurts, the last one being caused by the media that

has helped the biggest sports contests become global events

over the past fifty years.

For the 1948 Olympics in London, the broadcasting rights

went for somewhere between £1,000 and £1,500—about

£40,000

(US$60,000) in today‘s money. For the Olympics‘ return to Lon-

don in 2012, the rights (in a parcel with the 2010 Winter Olym-

pics) went for US$4 Billion, according to Tim De Lisle of More

Intelligent Life. Even though brand names are not allowed to be

displayed in the Olympic stadium, companies still fall over

themselves to be associated with the event and its biggest stars.

Ever since young lawyer Mark McCormack agreed to rep-

resent American golfer Arnold Palmer in 1960, just about every

top sports star has moonlighted as a corporate marketing tool.

Proctor & Gamble‘s Gillette brand launched what would be-

come one of the most successful global marketing efforts in its

history in 2007 by signing sponsorship deals with tennis player

Roger Federer, footballer Thierry Henry, and golfer Tiger

Woods.

Ties were severed with Henry and Woods in 2010, a year

which saw the former golf world number 1 lose US$20 million

in endorsement deals after confessing to infidelity and taking a

hiatus. Manchester United CEO Ed Woodward has overseen

the team‘s worst period in over two decades on the pitch but

has been deemed a successful CEO after cutting sponsorship

deals with Adidas and Chevrolet. The Adidas deal was made

possible

because

their

predeces-

sor Nike

were not

willing to

pay the

US $1

billion

for the

ten years

of exclu-

sive rights

and the Chevrolet deal was worth US$79.85 million for each

year of its seven-year duration.

How does a company choose which sports team or star to

endorse its brand? The first question is the intended audience.

At the end of 2012, golf‘s world number one Rory Mcilroy

signed a $250 million ten-year deal with Nike to be its brand

ambassador after Nike ditched Tiger Woods. This paid particu-

lar dividends in July this year when McIlroy won the open and

Nike got the chance to Tweet images of the triumphant Irish-

man alongside its brand logo.

McIlroy, whose sponsors also include Bose and Omega,

Big Picture

Bruno Mars at Super Bowl XLIX

Maria Sharapova

Sports branding in action


17

Big Picture

The Big Picture: Smart Sports Branding

(Cont.) By Kevin McGeary

has proven a winner for brands with his mixture of success and

(relative to Tiger Woods) wholesomeness. Of course, his ser-

vices are only affordable to a few companies, so brands should

stay on the lookout for available sports stars who can help pro-

ject their values and raise their profile in a specific locality. In

China, who is the next Lin Dan? Who is the next Yao Ming?

Brands need to get in there early. Success is important but so

too is potential. Sixteen year-old golfer Guan Tianlang could be

a good person to sponsor before he becomes too much of a

superstar.

Companies also need to consider the target market. In

India, getting ones brand name on the bat of a star cricket

player would be most logical, while in Canada and the United

States, ice hockey and baseball would respectively be the best

sports to target. In China, Rolex‘s sponsorship of tennis

player Li Na proved appropriate given her glamour and his-

tory of refusing to conform to the humdrum expectations of

the establishment.

Brands must also choose teams and individuals that

embody admirable qualities both on and off the field. These

include skill, style, personality and humility. Tennis champi-

on Maria Sharapova signed endorsements with Nike and

Prince rackets at the ages of 11 and 14, respectively. She won

Wimbledon in 2004 at age 17 and the world No. 2 contin-

ues to repay their belief in her and has a heartwarming rags

to riches story that fits their image.

When it comes to sports branding, the old expression

―any publicity is good publicity‖ is largely true. Tiger Woods

ceased to be a role model in 2009 but this year US$55 mil-

lion of his US$61.2 million income will come from endorse-

ments, helping him to sixth place on the Forbes' list of the

world's highest-paid athletes. As with much else in life these

days, fame is more important than actual achievement.

Aided by its partnership with the world‘s watersports

governing body FINA, Midea achieved much exposure at

last year‘s World Championships in Moscow. This goes to

show that for multinational companies, sports branding isn‘t

just beneficial, it is utterly essential.

An image of McIlroy tweeted by Nike after his Open victory

Midea CEO Paul Fang after signing a deal with FINA

Li Na posing while wearing a Rolex watch


18

IDEA

Idea of The Month: The Advantages of

Humanities Majors By Kevin McGeary

I t can‘t be too presumptuous to assume that your busi-

ness has never received a frantic phone call asking for someone

to urgently discuss the sociology of “Gone with the Wind,” ad-

dress the feminist critique of Christianity, or solve the riddle of

James Joyce‘s “Finnegan’s Wake.” However, there is a lot to be

said for staffing a business with people who have studied those

and other non-instrumental subjects which are offered at some

of the world‘s leading universities.

According to the 2014 Chinese College Graduate Em-

ployment Report, all but two of the top 10 college majors with

which to get a graduate level job were STEM (Science, Tech-

nology, Engineering or Mathematics). As The Economist point-

ed out in 2009, it is understandable that in a country like China,

where development is the priority and spending on infrastruc-

ture is colossal, engineers are pushed to the top.

Whereas the United States, as observed by Alexis de

Tocqueville in the 1830s, is a country with a solid tradition of

being governed by lawyers, a look at the resumes of members

of the CCP Standing Committee over the past three decades

shows that scientists and engineers reign supreme in the Peo-

ple‘s Republic. The last three presidents, Xi Jinping, Hu Jintao,

and Jiang Zemin all

started their careers as

engineers.

Yet this doesn‘t tell

the full story. Jack Ma

- possibly China‘s rich-

est man - majored in

English at Hangzhou

Normal University.

Fellow billionaire

Huang Nubo, an ac-

complished poet, stud-

ied Chinese. The myth of humanities graduates being doomed

to a life of poetry and poverty is no truer in China than it is

anywhere else.

In the United Kingdom, courses that are not STEM, law

or medicine and are not taken at an elite university have been

branded ―Mickey Mouse degrees.‖ Last year, former Conserva-

tive Member of Parliament Ann Widdecombe wrote in The

Daily Express that universities should stop fooling young peo-

ple into thinking such degrees are passports to success. Politi-

cians in Texas have this year been suggesting that arts students

should forget about receiving subsidies which will instead go to

STEM and busi-

ness students.

However,

the Choose Hu-

manities report,

published in

2012, suggests

that they are

wrong. The re-

port found that

leaders across a

wide range of fields in Britain such as FTSE 100 CEOs, Mem-

bers of Parliament, and Vice Chancellors of top universities

found that 60% of the U.K.‘s leaders had arts or social sciences

degrees. Of the CEOs of FTSE 100 companies, 34 had hu-

manities degrees and 31 had STEM degrees.

Why should companies value humanities degrees? In a

previous job, I once had an older colleague who knew enough

about the field we worked in to be at the top of it. Unfortu-

nately, his career had been stillborn for two decades. After his

constant insubordination, swearing at colleagues, and fantasiz-

ing out loud about firing or even doing violence to certain col-

leagues got too much, he was replaced by a much younger

professional who had studied philosophy.

The difference was noticeable from day one. His replace-

ment‘s calmness and analytical thinking skills made me realize

why figures from the U.K.‘s Higher Education Statistics Agen-

cy have shown that philosophy graduates are very much in

demand in the fields of finance, property development, health,

and social work.

If China is to successfully complete the transition made

by Japan and South Korea from a low cost manufacturing

economy to a home of numerous global brands, it will need

the humanities. The list of illustrious philosophy majors is too

long to put here (look it up); the study of history helps one

appreciate that scientific and technological developments don‘t

happen in isolation; and an appreciation of literature helps one

understand the importance of defying cliché.

The last one is particularly important. This is because it is

not imitation that makes money. It is creativity.

Jack Ma’s parents didn’t push him into doing a science and look what happened

Huang Nubo, billionaire and poetry lover


19

CAC’s Spanish Specialist By Kevin McGeary

Javier Romano

International Marketing Specialist

Trained mechanical engineer Javi Romano, 22, is

working in international marketing at Midea Commercial

Air Conditioning (CAC) for an eleven-month period which

began September 1st. He took this role after doing a one-

month internship in the research and development (R &

D) department in July last year.

Fluent in Spanish, Catalan, French and English, Javi

mostly focuses on the markets where these languages are

spoken. He uses

his training as an

engineer to help

brand and pro-

mote the prod-

ucts.

Despite

speaking only

limited Chinese,

Javi’s internship

gave him a good

oversight of how

the factory works,

how the R & D

works, and the

company’s prod-

ucts. This

knowledge ena-

bles him do his

current job. He

focuses on over-

seas markets where

CAC continues to grow and land eye-catching projects

such as airports, sports stadia and shopping malls.

He took the time to talk to Advances about learning

Chinese, developing Midea’s social media presence,

CAC’s star products, and how much he misses being able

to buy cheese while here in China.

ADV: How was your internship in July 2013?

Javier: Though my lack of Chinese limited the number of

things I could do, and this was disappointing, I now appreciate

how much I learned during that month. Before coming back to

take my current job I made sure that I would be able to work

mostly in English and that my work would be appropriated to

my skill set.

Part of what inspired me to come back is that I like China.

It is an emerging country in which my father has done business

for many years. Because it is still growing, China offers opportu-

nities that Spain does not. The unemployment rate in Spain is

still in the twenties and the youth unemployment rate is even

higher.

I am lucky to

be able to work

for such a big

manufacturer

so early in my

career. This

situation would

be extremely

rare in Spain.

ADV: Are you

learning Chi-

nese to advance

your career?

Javier:: Before

coming over

for the intern-

ship last year, I

had never even

thought about

learning Chinese.

Then when I

went back to Spain I started learning the language because I find

it interesting. I started learning under a Chinese guy who I met

out here during my internship. He works as a Spanish teacher

and moved to Barcelona at the same time I went back there. He

is now one of my best friends.

This guy traveled a lot around Europe so I found another

People

Javier Romano at the CAC front desk.


20

CAC’s Spanish Specialist (Cont.) By Kevin McGeary

Chinese teacher living in Barcelona and had a weekly 90-minute

lesson over a period of nine months. My level is not high but I

know enough of the basics to survive. Though I cannot read or

write Chinese, having my current level of vocabulary makes a

huge difference. I know this because I experienced living here

without knowing a word.

To learn how to read and write takes a lot of work. Con-

sidering how busy I am, for now I‘m just focusing on learning

how to speak.

ADV: If you were

fluent in Chinese, how

would this change your

role?

Javier: Actually,

my current role would-

n‘t change much, be-

cause in my job in in-

ternational marketing, I

only deal with markets

outside of China. How-

ever, I could communi-

cate more with tech-

nical staff and R & D

staff who tend not to

have as high of a level

of English as 90 per-

cent of my colleagues.

This would make the

process of learning tech-

nical details about products quicker and make my days a bit

smoother.

Much of my marketing work is general rather than specific

to any market, but because the languages I can speak fluently

are Spanish, Catalan, French and English, I pay more attention

to places where those languages are spoken.

ADV: So your role is to identify how to brand a product?

Javier: Yes, broadly speaking. But I think the main things

I bring to the table come as a result of my Western background.

I am a user of social networks such as Facebook and LinkedIn

so can help the company make early steps in promoting itself

online. I can also offer the company some insight into how

Western clients think.

ADV: What was your major in college?

Javier: I studied Mechanical Engineering at The Universi-

tat Politècnica de Catalunya (UPC) in Barcelona. You may think

the job of marketing is not relevant to my qualification as an

engineer, but CAC is such a technical product, it is important to

have good knowledge to converse with clients who might ask

detailed questions. I also need to know what to promote and

how.

ADV: What would

you say are some of

CAC‘s star products

of recent times?

Javier: Midea is

very strong in varia-

ble refrigerant flow

(VRF) products.

The V5X is the

latest series of this

kind. It is super-

efficient and revolu-

tionary in the indus-

try.

The full-falling film

centrifugal chiller is

another star product.

It saves 40% of refrigerant compared to its predecessors which

supports CAC‘s claim to being a green brand.

ADV: What should CAC aim for over the coming years?

Javier: I think the next big step, not just for CAC but also

Midea itself, will involve going from being a respected original

equipment manufacturer (OEM) to a famous brand. This is not

easy and there are lots of obstacles along the way but it can pay

huge dividends.

ADV: What is the biggest obstacle to achieving this?

Javier: It is important to raise brand awareness. The big-

People

R410A DC Inverter , part of the V5X series which Javier identified as a star.


21

CAC’s Spanish Specialist (Cont.) By Kevin McGeary

gest companies dedicate a huge percentage of their budget to

marketing. Sports branding would be good, but CAC is not a

product that ordinary members of the public care about. Ordi-

nary people don‘t walk into a shopping mall, appreciate the air

conditioning and wonder who made it.

Our particular products need to be promoted to people in

the industry. One customer in a business that produces prod-

ucts as large and complex as CAC can be worth the same as

hundreds of customers in another business.

Midea‘s biggest advantage is its huge and still growing

presence in the domestic market. The company can use this

success and the capital it generates as a basis to advance itself in

overseas markets.

ADV: Do

you think China is

a good place to do

business?

Javier: Of

course. My father

is an exporter who

has been dealing

with China and

Japan for many

years. He is very

happy with his

dealings with Chi-

nese companies,

including Midea. I

read an article this

month saying that

in China, foreign

investment had

dropped 1 percent

over the past year

and now amounted to US$96 billion. The days of breakneck

growth may have ended, but that is still a huge number.

China‘s strengths lie in the fact that it is still developing

and there is still much room for growth. This country is, as

Deng Xiaoping said, feeling for stones as it crosses the river. As

it becomes a middle-class country, the growth will level out and

economic policy will have to focus more on services rather than

simply products. Like Japan and Korea, it will make the shift

from being known for cheap labor to being known for quality

brands.

ADV: Do you like living here in China?

Javier: I like living here in Shunde but that is all I can say.

I can‘t say with certainty what I think of China because it is such

a huge territory, almost the size of Europe. There is always a

huge difference between living in the city and living in the coun-

tryside and there are enormous regional differences within every

country, but I like living here in Guangdong, even though the

summers are horribly hot.

One thing is, in China people work very long hours so

don‘t get a lot

of free time.

With what free

time I have, I

play football on

Tuesdays with

colleagues from

CAC and Resi-

dential Air

Conditioning

(RAC). I also

like to read,

watch movies

and play on the

computer. At

weekends, I like

to travel to

nearby cities,

such as Guang-

zhou, Hong

Kong and Macao.

As well as friends

and family, the main thing that makes me homesick is food.

Even though Cantonese cuisine is more similar to Spanish cui-

sine than anything else in China (it is not spicy and there is a lot

of seafood), I still miss being able to buy cheese! However,

when I was in Changsha where everything is spicy, I definitely

appreciated Shunde food even more.

People

Javier talking to Advances at his office in Shunde.


22

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