China Chunlan Air Conditioner Company

Jiangsu Chunlan Group Established in 1973, Jiangsu Chunlan produces air conditioners, dehumidifiers, washing machines and other household appliances. Air conditioners make up 80 percent of the company’s overall output, and 23.50 percent of exports. An ISO9001,ISO14001-certified company, Jiangsu Chunlan sells $1.4 billion worth of air conditioners 2006, 25 percent of which is exported. OEM orders account for more than two thirds of exports. Major markets are Europe, Middle-east, Africa, and Middle-Asia country. Jiangsu Chunlan manufactures 7,000to 24,000BTU window-type air conditioners, 18,000 to 48,000BTU floor-standing units, 7,000to 24,000BTU wall-mounting units and 32,400to 88,700 BTU central air conditioners. Of total production, Window-type models take up 10 percent of total output; floor-standing models account for 5 percent; wall-mounting AC for 73 percent, and central air conditioners, 12 percent. About 55 percent of products use R22, 17 percent use R407C, and 28 percent use R410A. All R22 used are procured locally from a holding company in Taizhou city, while R407C is sourced from Hang Zhou and South Korea. The R410A is imported from Japan and South Korea. Manufacturing Jiangsu Chunlan’s R&D team focuses on improving existing housing designs and intends to develop 10 new models a year. The R&D team has 900 members and works in partnership with various academic institutes and international companies. The R&D process, described as “10, 100 and 1,000”, usually takes 18 months to two years. At stage one; a new design is manufactured on a small-scale production line with an output of 10 units. Tests are carried out on noise level, and cooling and heating capacities using the air enthalpy method. Performance in extreme environments is also tested. A stage two, 100 units are manufactured, tested and improved on. The design scheme and testing standards are then established. In the final stage, 1,000 units are manufactured using the scheme and standards. Of these, 20 units undergo durability tests or running non-stop for one to two years while 500 to 600 specially labelled units are offered to long-term, established customers. The performance of the latter is tracked twice a year for three successive years. Jiangsu Chunlan has 24 assembly lines, each with five QC points manned by two to three people at each point. Another two to three QC team members patrol each assembly line. The company also checks air conditioner performance via the helium CNC-leak test system, which emits an alarm when there is a leakage. Finished products are tested on the assembly line and are also put through a voltage testing system. Jiangsu Chunlan acquired ISO14001 certification in 2003 and implements IQC, OQC, and FQC. Its products have CCC, CE, ROHS, MEPS, CB, TUV, GS, SASO and UL approvals. Outlook In 2008, Jiangsu Chunlan plans to focus on consolidating its existing product line to achieve economies of scale and cost-savings. It also plans to increase annual capacity by three million units. The company intends to adopt an aggressive marketing approach, which includes attending trade shows in Guangzhou, Germany, and Spain. Jiangsu Chunland expects its export sales to grow by 12 percent in 2008.