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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
Advances Newsletter, November, 2014
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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
Advances Newsletter, November, 2014
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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
Advances Newsletter, November, 2014
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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
NEWSLINE
Presentation of the “Recognized Employer Status Certificate from CEO CPA Australia Mr. Alex Malley (Left) to Mr. Rainer Kern (Right)
Advances Newsletter, November, 2014
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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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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.
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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.
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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
Advances Newsletter, November, 2014
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.
Advances Newsletter, November, 2014
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.
Advances Newsletter, November, 2014
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.
Advances Newsletter, November, 2014
22
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