Midea Group

Founded in 1968, Midea Group set its foot in the field of household appliances manufacturing in 1980. It carried out shareholding restructuring in May, 1992 and saw its initial public offering (IPO) in November, 1993 on Shenzhen Stock Exchange Market. In 1997, the company initiated the divisional system reform while in 2000 it incorporated into a conglomerate.
Midea Group occupies an area of 1,000,000 m2 including its headquarters in Shunde and another two industrial zones in Daliang and Wuhu. It has five key divisions i.e. air-conditioner, household appliances, compressor, electric motor and kitchen utensils and runs business in the fields of electronics, real estate, investment and assets management. Right now, the group has 15,000 employees, 4,000 of whom have received junior college education and about 200 have received their master’s, doctor’s or postdoctoral degree. The total assets and net assets of Midea are 9 billion and 2.5 billion yuan respectively. As a Chinese Well-known Mark, it has a brand value of 6.38 billion yuan.  
In 2000, the sales revenue of Midea hit 10.5 billion yuan, up 31% year on year while export sales went up by 40% to 140 million US dollars compared with the previous year, generating a tax and profit payment of one billion yuan, an increase of 60% over the previous year. It is the first large enterprise in Shunde district to have sales revenue of over 10 billion yuan.
Midea holds the largest and most complete production chains for air-conditioners in China. It can turn out in a year 2.5 million residential air-conditioners, 10,000 commercial air-conditioners, 2 million air-conditioner compressors and 8 million micro motors for air-conditioners. In addition, Midea produces annually 17 million electric fans, 8 million electric cookers, 3 million microwave ovens, 2 million electric heaters, 3 million water dispensers and 1 million cooking utensils. Its production and sales volume of air-conditioners ranks top two in China, which of fans remains No. 1 in the world, which of electric cookers, electric motors for air-conditioners and electric heaters is the highest in the country while that of cooking utensils and compressors remains top two in the industry. Besides, MDV (a kind of commercial air-conditioner), microwave oven, dishwasher, water dispenser and other new products are also quite popular in the market. 
In recent years, Midea Group takes innovation in mechanism as the core, continues to promote innovation and reform in the operational mechanism, property rights system as well as management system. After the implementation of divisional system reform in 1997, Midea gradually advanced the share-holding system of operators in 1998 and further carried out the corporatization of divisional system and Management Buy-outs (MBO) in 2001. Midea always sees human resources as the prime resource. By creating an open and competitive environment for its employees, it provides broad space for development for its workers, especially professional managers. At present, Midea has attracted talents from all around the country including Hong Kong and from countries around the world such as Japan, America, Singapore, England and Australia, forming a sound team and favorable talent reserves.
Midea has an extensive marketing network, with over 30,000 sales outlets, over 100 business representative offices and branches on the provincial and municipal level, over 30 customer service centers, over 5,000 service networks and, in addition, a dedicated, quality and young marketing team. The group lays great emphasis on exploring overseas market. It has established a global marketing network covering over 60 countries and regions on the five continents and set up branches in Hong Kong, Europe, America and other places. All of its products have been granted the ISO9001 certification, its air-conditioners have gained the ISO14000 certification and over 400 items of its products have won international certifications such as CE of EU, UL of America, CSA of Canada, BS of England and GS of Germany.
On technological development, Midea persists in the development strategy of high starting point, high input and high quality. It has established corporate technical centers and postdoctoral scientific research working stations with some 1,500 profession technical workers, which have been approved by the state. Midea has established comprehensive technical cooperation relations with many world renowned multi-national corporations, such as Toshiba, NEC, Mitsubishi, Carrier, Merloni Progetti and Texas Instruments. In addition, it cooperates with Tsinghua University, Xi’an Jiaotong University and other key colleges and universities in research of electric motor, kitchen utensils and electronic control technology to cultivate its ability for independent development and its advantage of core technologies. 
During the period of the Ninth Five-Year Plan, Midea altogether handed over to the state 1.5 billion yuan taxes. Since 1994, it spent over 10 million yuan for public welfare annually and its donations to Shunde Polytechnic alone added up to 20 million yuan. The group had an outsourcing and supporting output value of 7.9 billion yuan in 2000, with 810 supporting enterprises. In this way, it made great contributions to the prosperity of local economy and to solving the employment issue of the district.
The year 2001 is the first year for Midea to implement the Tenth Five-Year Plan and is the year when Midea will further transform its mode from scale management to profit-earning. At the same time, it will accelerate its pace to internationalize the company and realize the internationalization of capital, technology, market, brand and personnel so as to promote the upgrade of the industry and product structure. It is expected that in 2001, Midea will have a sales revenue of 13.8 billion yuan, with export sales hitting 180 million US dollars.  
In the next five years, Midea aims to become a world renowned enterprise in household appliances manufacturing and key industrial chains and, at the same time, enter such fields as materials and devices for electronic industry, development and services for application software, logistics distribution and delivery and others, so as to form the scale advantage. By 2005, Midea will become a diversified large-scaled international famous conglomerate with annual sales revenue of 39 billion yuan, an export sale of 800 million US dollars and a tax and profit payment of 4 billion yuan.

March, 2001