Manufacturing News

Air conditioner maker Gree sets lofty sales goal

Gree Group, China's largest maker of domestic air conditioners, has set an ambitious sales target for the years ahead, even amid the sluggish demand due to the global financial crisis.

Dong Mingzhu, president of Gree Group, said the company's sales are expected to reach 200 billion yuan ($32 billion) by 2015, after its sales surpassed 100 billion yuan last year.

"There was a downturn in global demand for Chinese electronic appliances last year. But we've achieved our sales target thanks to strengthened technology research in the last few years," Dong told China Daily during the annual session of the National People's Congress.

Gree's sales increased 19.8 percent year-on-year in 2012, with net profit increasing 40.9 percent to 7.4 billion yuan.

In contrast, China's home appliance industry saw a decline of about 17 percent in sales last year, according to Dong.

Dong said the company will boost its presence in the international market by focusing on brand building and technology upgrading.

Gree's plans for international expansion are well in line with the government's "go global" strategy, which was emphasized in Premier Wen Jiabao's government report during the opening of this year's NPC session.

Wen said in the government work report that China will make investments overseas and support Chinese companies in their global expansion strategies to create a new space for economic development.

"For Chinese companies, investing overseas shouldn't be simply opening an office or a factory in a foreign country. You should bring in your own brands and technologies overseas to boost your competitiveness in the global market," Dong said.

Gree started building a plant in the United States last year, according to Dong.

"Prior to the construction of the plant, we opened a branch office in California in 2011, which has helped greatly to boost the shipping of our products to the United States," Dong said.

Also, the company has started international promotion efforts. For instance, in March last year, Gree's advertisements were shown on a LED screen in New York's Times Square.

The company currently makes its products on the Chinese mainland, Brazil, Pakistan and Vietnam.

According to Dong, the company's profits from exports last year were about 1 billion yuan, thanks to years of efforts to boost its international presence.

The international market accounted for nearly one-seventh of Gree's sales.

"For us, there isn't a difference between selling a product in the domestic market or in the overseas market. That's why we were able to achieve a sales increase in both markets," Dong said.

Dong said that China's urbanization process and increased spending by rural residents will help to boost sales in the domestic market.

"China is more like an international market for us in the coming years, given its vast potential purchasing power, especially in rural areas," Dong said.

Dong, also a NPC deputy from Guangdong, said that the company doesn't have any plans to diversify its business.

"We'll focus on what we're specialized in. We'll boost efforts in technology research to make more environment friendly products in the future," Dong said.

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