Carrier Corp. and Midea Electric to Form Manufacturing Joint Venture in China

Carrier Corp., a unit of United Technologies Corp. (NYSE:UTX), and Guangdong Midea Electric Appliances Co., Ltd (Shenzhen Stock Exchange. 000527), a unit of the Midea Group, have signed an agreement to form an air-conditioning manufacturing joint venture, Foshan Midea Carrier Air Conditioning Equipment Co., Ltd, in Shunde, China. Midea will hold a 60 percent stake and Carrier will hold the minority stake in the joint venture. He XiangJian, chairman of the Midea Electric board, and Geraud Darnis, chairman and president of Carrier Corp., celebrated the contract signing at a ceremony today in Guangzhou.

The Midea-Carrier joint venture will produce residential and light commercial duct-free split air-conditioning systems exclusively for Carrier for the global market. The partners expect the manufacturing facility to be fully operational by the end of the year.

“The Midea-Carrier joint venture is a milestone in Carrier’s long and successful relationship with Midea,” said Darnis. “This venture brings together the strengths of two leaders in the global air-conditioning industry.”

Midea is the largest exporter and leading air-conditioning manufacturer in China, the world’s second largest and rapidly growing air-conditioning market. Midea offers world-class design expertise and manufacturing scale in duct-free split systems while Carrier is the global leader in heating, ventilation, air conditioning and refrigeration (HVACR) systems. Carrier’s founder, Dr. Willis Carrier, invented modern air conditioning in 1902. Carrier brings a well recognized brand name and unsurpassed global distribution network to the joint venture. Carrier has a significant presence in China with seven factories, more than 100 sales and service offices, 2,500 employees and a state-of-the-art global research and design center in Shanghai that opened in December 2006.

Midea and Carrier will invest 200 million Yuan (U.S. $29 million) in registered capital to establish the new company.

“Carrier has a rich history in China and this investment demonstrates our ongoing commitment to China and its HVACR markets,” added Darnis.

Fang Hongbo, president of Midea Electric Co., Ltd, said, “Our new JV is aimed to be a stable, long-term platform of capital, product, technical and brand cooperation and alliance between Midea and Carrier. We will take full advantage of this opportunity to draw on manufacturing, technical and management experience from both parties to accelerate the globalization of the new venture.”

In addition to Foshan Midea Carrier Air Conditioning Equipment Co., Ltd, Midea Air Conditioning and Toshiba Carrier Corp. have four successful manufacturing joint ventures. Carrier indirectly participates in those joint ventures through its minority ownership of Toshiba Carrier.