Midea Kitchen Appliances Division Vacuum Cleaner Company Introduction

Midea Kitchen Appliances Division Vacuum Cleaner Company Introduction

Midea Group Structure Board of Directors Executive Committee Legal IT Finance Technology& Quality Dept. Auditing Dept Admin & HR Strategy & Planning International (MID) Motors Appliance Co Compressor Appliance Co Lighting Appliance Co Small Domestic Appliance Co. Water Heating Co. Environmental Appliances Kitchen Appliances Division Dishwasher Division Laundry Division Refrigeration Division Commercial AC Division Residential AC Division

Kitchen Appliances Division Structure Kitchen Appliances Division Financial Management Dept. Operations and Human Resources Dept. Quality Management Dept. Supply Chain Management Dept. Industrial Design Dept. R & D Center Vacuum Cleaner Company Cooking Appliances Company Microwave Oven Company Domestic Sales & Marketing Company Overseas Sales & Marketing Company Midea Kitchen and Electrical Appliances Division

Organization Structure Vacuum Cleaner Company Financial Management Dept. HR and Operation Department Supply Chain Management Dept. Quality Management Dept. R&D Department Manufacturing Factory Molding Factory Domestic Sales & Marketing Company Overseas Sales & Marketing Company

Development History 2012 2010 Merged into Kitchen Appliances Division VC was sold more than 6 million units. 2008 Established partnership with Bissell 2007 Established Partnership with Dyson 2005 Joint venture with Midea Group, named Midea Chunhua Electric Appliance Co. , Ltd. 2000 Horned “China’s Best Known VC Brand” 1981 Establishment the 1 st VC Company

Sales Growth Vacuum Cleaner Business growth 2006 to 2013

Global Network

Vacuum Cleaner Company Overview Current Base New Base Midea VC Company, as a subsidiary corporation of Kitchen Appliances Division of Midea Group, has grown into an outstanding VC manufacturer. Sticking to “open, harmonious, pragmatic and innovative” enterprise spirit, Midea VC Company has been pursued by large number of talents with its “Passion, Professional and Participate” talent concept. Boasting an integrated system of product development, manufacturing and quality control, the company now owns annual capacity of 8 million VCs and 10 million motors with more than 250 technical and professional managerial staff fully engaged. At present, Midea VC Company has launched its new manufacturing base project in Caohu, Suzhou with the annual capacity of 20 million VCs. With the extraordinary market developing strength and resource advantages of Midea Brand, Midea VC Company has been dedicated to enhance its medium-and-long-term core competence, and to be the leading vacuum cleaner supplier in the world within 3 years.

Vacuum Cleaner Production facilities New Production Base

New Base Expectation - Total Investment: 600 million RMB - Devoted to be No. 1 manufacturing base for Vacuum Cleaner - Have the lead in design and products

New Base Expectation Caohu New Base – Milestone of Midea VC Company, is expected to be completed before Sep. , 2014. It covers 110, 000 square meter with the building area of 84, 000 square meter, which includes plant, administration building, R&D building and Staff Centre. Injection and Motor would be 100% self-supplied with the annual output 20 million units. Staff care, technology orientated, informationization, high efficiency and environmental protection would be the 5 focus, through which the new base will be the leading manufacturing based 3 years ahead of VC industry. Environmentally Friendly Industrial Park • floor heating system • photovoltaic power generation • rainwater recycling and wastewater treatment system

Production facilities Production facility – Total 11 million units capacity Motor Plant Vacuum Motors Annual Production Capability: 10 million units Testing center R&D center Injection Plant 20 Injection machines Factory for Bissell Project Building Area: Sq. m 38, 300 Annual capacity: 4 million units Vacuum Cleaner Plant Building Area: 54, 300 Sq. m Vacuum Cleaner Assembly line: 10 Lines Annual Production Capacity: 4. 5 million units Free Area for New Project Building Area: 20, 000 Sq. m Available lines: 5 Lines Annual Production Capacity: 2. 5 million units

Development Planning l Cost Leadership Strategy l Appropriate Scale Oriented; Key Account Focus; Key Market Breakthrough l Whole-Category & Omni-Channel Cover; Strive to be No. 1 both in Overseas and Domestic Sales l Scheme medium-and-long term core competence; Devoted to be the best VC supplier of the world

3 -year Technology Planning ECO Pick up Low noise Pick up Emission Input power 2014 2015 C, D A, B A, A+ Bag 62 61 60 Bagless 80 72 67 Carpet 80 82 85 Floor 103 108 110 Grade Noise (d. BA) Technology 2013 -Noise -Emission -Efficiency -Power -Pick up -Noise -Power(W) -Noise New tool development 900 W/700 W 1200 W / 900 W / 700 W New tool & New design-1 ST New design New tool & New design-2 nd

Technology Innovation Technology Intellectual Technology Easy to use Multi-stage Silence System Single and Multi Cyclone System Deep Clean and Steam Sterilization BLDC+Battery+Fan Easy moving structure Hygienic High Efficiency Filtration System Novel Materials Miticide Device

Industrial Chain Review Design Consumer Logistic R&D Industry Design Warehouse Manufacturing R&D Assembly Agency Testing Sales Tooling Development and Manufacture Motor Development and Manufacture Molding Manufacture

Industry Design Industrial Design Company has become a professional, international team, which can complete all design aspects from “Concept to production”. We are committed to providing high-quality products for customers and consumers both home and abroad. Our design concepts and innovation have won various international design awards. Midea Industrial design company has gradually become one of China’s top design leaders. In the future, we will continue to innovate and develop, cutting edge products with the aim of becoming a world-class design team. 70 domestic designer + 7 South Korea/USA/Italy expert Silver Award included

System Construction Midea Products have passed UL、CE、CB、GS、LCIE、EMC、CCC, etc. ISO 90001 ISO 40001 QC 080000

Information Construction Comprehensive informatization management system in the company provides strong support to the production management, by taking Enterprise Resource Planning(ERP) as the core. Order driven Statement optimization Multi-language upgrade ERP Process analysis

Overview of R&D Devoted to improve the quality of human life, Midea VC company is making great efforts on the research and development of new technologies, such as cyclone, high efficiency, silence system and ECO design tec. with the prior consideration of energy saving, environment protection, and intelligence technology. These years, many joint projects were established with Nanjing University, Zhejiang University, Huazhong University of Science and Technology. With more than 150 national and international patent, Midea VC Company is honored National Post-Doctoral Research Center, Provincial R&D Center, Engineering Technology Center and High and New Tech Enterprise.

R&D Professionals Xin Xianshan (Korean) Design Specialist Profession Experience: 16 Years Rinaldo (Italy) Design Specialist Profession Experience: 10 Years William (USA) Design Specialist Profession Experience: 8 Years

R&D Professionals BYUNGSUN YANG (Korean) VC R&D Specialist 大谷利夫 (Japanese) Motor R&D Specialist Profession Experience: 25 Years Profession Experience: 38 Years CHANGDO PARK(Korean) KYUNG CHUL KIM (Korean) VC R&D Specialist Profession Experience: 22 Years VC R&D Specialist Profession Experience: 28 Years

R&D abilities HUMAN RESOURSES BYUNGSUN YANG (Korean) Position: R&D Technology Expert Joined in Jan. , 2013 ü Years of working: 25 years in VC Industry ü Engineering Experience • 1988 -2012，LG electronics ，Director for R&D Department ü R&D Experience • Bagtype/Stick/Steam/Wet & dry/Motor/Power Nozzle/Hose/Robot/upright(Bagless)/Bagless（ cyclone) ü Award • Good Design award • New Technique award • Red dot award

R&D abilities HUMAN RESOURSES CHANGDO PARK(Korean) Position: R&D Technology Expert Joined in Feb. , 2013 ü Years of working: 22 years in VC Industry ü Engineering Experience • 1991 -2012，LG electronics ，Director for R&D Department ü R&D Experience • motor/Bag/low noise bag/SRM bagless/Robot/RK 2 dev. modify models/Bedding cleaner ü Award • Good Design award • New Technique award • Red dot award • 6 sigma Black Belt

R&D abilities HUMAN RESOURSES KYUNG CHUL KIM (Korean) Position: R&D Technology Expert Joined in Jan. 2013 ü Years of working: 28 years in VC Industry ü Engineering Experience • 1984 -2009，engineer in LG (25 years) • 2010 -2012，SEILSA，Director for R&D Department ü R&D Experience • Wet & dry/Up-Right/Low noise/stick/Robot ü Award • Good Design award

R&D abilities HUMAN RESOURSES 大谷利夫 (Japanese) Position: Motor Technology Expert Joined in Feb. , 2010 ü Years of working: 38 years in VC Industry ü Engineering Experience • 1974 -2006，SANYO，motor Research and design (32 years) • 2006 -2008，Shanghai Xingpen，New product research • 2009 -2010，Suzhou EUP, new product development ü R&D Experience • Minor motor/high efficiency/Low noise ü Award • JEMA(Japanese Motor Industry Association) progress prize

R&D abilities HUMAN RESOURSES SOAK PARK(Korean) Position: Motor Manufacturing Technology Expert Joined in MAR. , 2013 ü Years of working: 23 years in VC Industry ü Engineering Experience • 1990 -2007，DAEWOO，motor Research and design (17 years) • 2007 -2008，Imperial Goldrich Hongkong，General Manager • 2008 -2012，慧仁CITY(株) research laboratory, Director ü R&D Experience • Wet & Dry/Up-Righ/high efficiency/Low noise ü Award • KS(Korea Standard) committee member

Agency Testing Midea Testing Center is highly equipped with more than 50 ea testing machines. Testing capacity covers more than 400 items, including performance, safety, reliability, and precision testing for components etc. What’s more, Midea Testing Center was accepted and authorized by Bissell and TTI. Sound Testing UE Room Performance Testing Life Testing Precision Measurement Materials Testing Lab Life Test for Components Cleaning Performance

Agency Testing Midea Testing Center is recognized by many international certification organizations, such as UL, TUV, SUD, TUV, Rhineland, Intertek, BV-LCIE etc. , which is available to testing witness on IEC/EN 60335 -1、60335 -2 -2、60335 -254、60335 -2 -10、UL 1017. Once participate the edition and revision of National Standard related to home appliance, especially for Vacuum Cleaner.

Molding Manufacture High efficiency of more than 40 ea injection machines fully support 40% self -supplying unit assembly manufacturing. Besides, Highly equipped prototype processing center offer strong support for design and evaluation testing.

Motor Development and Manufacture Independent Development and Manufacturing of VC Motors

Assembly Manufacture： 20 assembly lines，3 flexible lines, Annual output of 10 million. Lean Production：automation equipment and informatization system would be brought to support the JIT lean production Quality Control： 2~3 inspecting positions have been placed when produced, to ensure 100% pass rate.

Warehouse & Logistics Large Capacity Warehouse with 150, 000 capacity; shipment quantity per day can reach 50, 000 with 2 loading stages.

Care for Staffs Technical Innovation Customer Value • Customized Offers and Solutions • go beyond your expectation • • • Lean Manufacturing Opportunity and Trend Research • Automation Development in • High Quality New Technology • Eco-friendly Learn through New Technology Quality Oriented • Reliable Quality Control • Brand Quality Value

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