Wednesday, July 24, 2019

New fridge technologies to drive Emerson profits for next half decade

Mar 19. 2019
John Heo, vice president for Southeast Asia, Emerson Commercial and Residential Solutions.
John Heo, vice president for Southeast Asia, Emerson Commercial and Residential Solutions.
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Emerson is eyeing a business opportunity to invest US$10 to $20 million in the Asean and Asia Pacific region for new refrigeration technologies, as it aims to increase sales by up to 10 per cent in the next five years. In Thailand, the firm will focus on increasing refrigerator sales in the cold-chain market.


“There are two new technologies which Emerson has been working on: the variable speed refrigeration condensing unit and refrigerators with a lower ‘global warming potential’ (GWP),” said John Heo, vice president, Southeast Asia, Emerson Commercial and Residential Solutions. 

Heo said the two technologies are currently being developed in Suzhou, China. He expects the development phase to be completed in the next two years, with investment sums of between $10 to $20 million (Bt316 to Bt633 million) to follow afterwards in the manufacturing phase. 

“The variable speed condensing unit is more efficient than traditional condensing units, as it will be able to adjust its speed according to the demand of the system. This will lower the power consumption and, in turn, will lower the costs for our customers,” he said. 

As for the lower GWP refrigerators, environmentally less harmful products are becoming more popular in many Asian markets. Even though Thailand’s market is still lagging behind markets of developed countries, Heo said, its people will sooner or later start to demand more environmentally friendly products. 

Twenty-one years ago, Emerson invested over $100 million to establish a manufacturing centre in Thailand’s Eastern Seaboard, currently known as the Eastern Economic Corridor (EEC), he recalled

Then six years ago, Emerson established a training centre to provide training advice to its customers about the products. And three years ago, the firm invested in the manufacturing of condenser units in the Kingdom. Through these two projects, Emerson has invested up to $1 million in Thailand in the past half-dozen years. 

“Through investing to continually improve our products and services and enhancing our position as a leading firm in the refrigeration industry, Emerson has achieved an average of 10 per cent growth in sales for the past five years, and we aim to maintain this sales-growth rate for the next five years,” said the vice president.

The core of Emerson’s business strategy for the upcoming years lies in its focus on Thailand’s cold chain market. 

A “cold chain” is a supply chain of goods that need to be stored under controlled temperatures, such as fruits, meat and vegetables. 

“In the past, Thailand’s strong exports was the backbone of the cold-chain industry, as Thailand exports various non-durable goods to the rest of the world,” Heo explained. “However, in the past 10 years, Thailand’s middle class has expanded and the domestic demand for fresh products in convenience stores and supermarkets has grown rapidly.”

It is in the latter part of the supply chain, boosted by domestic demand, that a new target market for Emerson has emerged. This includes selling refrigeration units to pharmacies, supermarkets, restaurants and other commercial distribution outlets. 

“Thailand’s cold-chain market has been growing by double digits over the past 10 years, and is expected to grow at a high single digit in the upcoming five years,” Heo finished.


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