Financial crisis, flu to an excellent enterprise(30826)

Financial crisis, flu to an excellent enterprise

The early spring is a low season for the sales of air conditioners; however, the workers on Gree s production line are working as usual. At the same time, the strategic cooperation of Gree and Daikin is formally launched and opens the situation of expansion in reverse. We hardly ever find the effects of financial crisis in Gree.

Recently, a correspondent of Nanfang Daily took a special interview with Vice-chairman and President Dong Mingzhu.

The head-on blow makes everyone more sober.

Nanfang Daily: Currently, the financial crisis caused large impact on the real economy, including residential electrical appliance manufactures. How much influence does Gree have on? How do you look upon this global financial crisis?

Dong Mingzhu (hereinafter called Dong): At first, please allow me to speak a slight digression. I think a company shall not regard the financial crisis as an excurse for its failure in competition. Even if the financial crisis is inexistent, some enterprises would still operate hardly because of the poor management and even cause bankruptcy. The financial crisis just accelerates those enterprises lack of competition to be eliminated.

Of course, Gree is also affected by the financial crisis more or less, e.g. the expected operating income in 2008 was 50.00 billion Yuan. Now, the total amount is possibly influenced by the financial crisis and our speed of scale expansion also slows down. However, Gree still keeps stable and quick growth according to the general operating conditions. The annual profit in last year is close to two billion Yuan, over 50% growth.

The confidence is gold. Like Premier Wen said, the confidence is more valuable than gold. I always trust that any crisis is impossible to beat down the powerful companies. On the contrary, the financial crisis will be a good chance for excellent enterprises. The head-on blow can calm enterprises down to more soberly think the past and future so as to adjust thoughts and developing strategies in time. For example, the financial crisis is just like "Flu". The enterprise will be healthier after proper adjustment like Gree with solid quality.

Secret of success: quality control and technology research & development

Nanfang Daily: In last year, Gree still keeps the quick growth under the adverse condition of cool summer and impact of financial crisis. What is the secret?

Dong : There is not any secret in Gree. If so, the first is to insist on the professional production absorbedly. Gree always resists the temptation of diversification in decision-making, restrain the impulsion of blind expansion and strictly control risks so as to be responsible for enterprises and stockholders.

Secondly, Gree is able to maintain growth in adverse conditions, which is the result of insisting on the independent research & development of core technologies in the long term. We trust the bought technologies are backward and eliminated forever. It is impossible to buy the core technologies. As you know, no competition if no core technology. Therefore, we have persistently developed independent research & development in these years. There are over 2000 patents (of which invention patent amounts to300) in Gree; meantime, we also mastered the most advanced inverter air conditioning technologies, which is the reason why Daikin selected Gree as her partner.

Good time for future expansion and layout

Nanfang Daily: Since the financial crisis, many export processing manufactures were worst affected. As regards One-third of products in Gree exported to overseas markets, as well as the factories in Brazil and Vietnam, are they influenced?

Dong: At present, the operation of factories in Brazil and Vietnam is normal.

With regard to the export, the orders of OEM production for some customers are surely affected. For example, the window air conditioners exported to USA are profitless; however, the export of our self-owned brand products is increasing on the contrary.

This crisis brought us a lesson, i.e. to accelerate the investment of technology research & technology and to expand the export of self-owned brand products. As you know, many foreign residential electric appliance enterprises suffered from serious influence in the financial crisis, some broke down and some was reduced sharply on production capacity, which is a good opportunity for such powerful enterprise as Gree. The cooperation with Daikin is intended to make preparations for future export and overseas expansion.

(Sorting out according to the report on Nanfang Daily on Feb.19^th, cut down slightly)

Financial crisis, flu to an excellent enterprise

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