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A.O. Smith (China) Water Heater Co., Ltd
2014-03-27
As a multinational corporation with an admirable history of 138 years and a listed company in NYSE (AOS), A.O. Smith has become the largest water heater producer in North America based on its advanced technologies, high-quality products and integrated services. It has been producing water heaters since 1936 and its global business revenue amounted to USD1.71 billion in 2011. The company now has 24 plants in 7 countries with a total global staff of nearly 10,600. A.O. Smith water heaters and heating systems are recognized and preferred by a great many consumers for reliable quality and integrated services, and are widely used in KFC and McDonald chain stores worldwide. The company is also the supplier for all US embassies and consulates overseas designated by the US Government.

A.O. Smith (China) Water Heater Co., Ltd., a wholly-owned affiliate to A.O. Smith, was founded in Nanjing Economic and Technological Development Zone in 1998, and has its second plant currently under construction with a total investment of USD180 million.

By means of its strong R&D capacity, A.O. Smith has maintained a fast and continuing growth of sales volume at 35% to 40% annually ever since its entrance into the Chinese market in 1998, and has so far stabilized its top position in China's water heater market in terms of market share. According to CMM data, A.O. Smith ranks top in both the electric and gas water heater markets in China with a share of 35% and 17%, respectively. It holds a share of 26% in the integrated water heater market in China, leaving all other brands far behind. Undoubtedly, A.O. Smith has been the leading brand in the water heater industry.

Delivery of the super-scale base for production and research of energy-saving water heaters

A.O. Smith has never stopped its investment in China ever since it invested USD30 million in 1998 to establish its wholly-owned affiliate in Nanjing, that is, the A.O. Smith (China) Water Heater Co., Ltd.

Within hours subsequent to China's entrance into the WTO in 2001, A.O. Smith announced its USD20-million capital expansion plan, aiming to build a largest base in Asia-pacific for water heater manufacturing and R&D. In 2004, A.O. Smith founded its Global R&D Center in Nanjing China, which has functioned to support its product R&D, technical application and engineering technology services in both the Chinese and the international markets. "The most prominent advantage of our Global R&D Center lies in its proximity to the Chinese market," said Ding Wei, Senior Vice President of A.O. Smith Group Corporation and President of A.O. Smith China, "Through R&D activities, our excellent R&D staff from China and the USA or other countries of the world offer water heater products which can satisfy the innovation and energy-saving needs of Chinese consumers."
A.O. Smith increased its investment again in Mar., 2011 to build up the base for R&D and production of energy-saving and low-carbon water heaters with the hope of leading the energy-saving and low-carbon upgrade of the water heater industry and laying the foundation for sustainable development. The second plant of A.O. Smith in Nanjing China has broken ground with the increased investment, which will, once built up, significantly expand the company's capacity for such products as energy-saving electric water heaters, gas water heaters and solar water heaters. It will double the production scale of A.O. Smith China again and better satisfy the ever-increasing needs of the Chinese market for A.O. Smith water heaters, thereby further consolidating the company's leadership in the water heater industry in terms of innovation, energy-saving and technical advancement.
A.O. Smith's new plant is designed to cover a total area of 350 mu and is planned to be constructed in two stages, where the Stage I project will cover an area of 180 mu with a floor area of around 53,000 square meters and is due to come on stream in June, 2013. A.O. Smith will establish a world-class water heater R&D and production base with regards to both technical R&D and production scale.
 
Concentrating on R&D for 138 years to create energy-saving masterpieces

Ever since its foundation in 1874, A.O. Smith has been insisting on the philosophy of "prioritizing technical R&D to create masterpieces through continuous innovations" for a splendid history of 138 years. In China, A.O. Smith has also firmly stuck to its values of "focusing on scientific research and continuing to innovate" and has always prioritized technical innovations and consumers' needs, trying its best to develop more products that better meet the needs of Chinese consumers. While continuously expanding its industrial scale, A.O. Smith is always standing at the forefront of industrial reform to deliver low-carbon and energy-saving water heaters.

Up to now, A.O. Smith has established a modernized management system in China including integrated R&D, production, sales and services, with its product portfolio across both commercial and household segments. It has brought along internationally-appreciated water heaters and professional services to Chinese consumers.

In the A.O. Smith Global R&D Center, energy-saving technologies are ceaselessly improved while upgraded technologies are invented one after another, including: the glass-lined special protection system, which protects the heater from corrosion and fouling and ensures longer service life and more efficient heating; the electric water heater with a heat pump energy-saving module, which can save the electricity by half and supply hot water in an energy-saving and superfast manner by means of the "fast-forward button"; the pressurized solar water heater with a glass-lined storage tank, which heats water by both solar power and electricity and supplies comfortable hot water in an energy-saving manner; and the gas water heater with an energy-saving condensation technology, which offers an energy efficiency of over 100% and effectively prevents carbon monoxide poisoning, thereby perfectly integrating safety and energy saving.

In addition, A.O. Smith has also paid much attention to the R&D of heating systems and water-treating products, and made endless efforts to bring Chinese consumers a secured and convenient life. The A.O. Smith household wall-mounted stove with both warming and water-heating functions is designed, installed, tested and repaired by professional teams, representing the best combination of energy saving and comfort in household heating. The A.O. Smith anti-permeation water purifier can filter out not only harmful substances in water such as impurities, residual chlorine, thermonatrite, virus and bacteria, but also heavy metals which cannot be removed by common purifiers, thus effectively ensuring the drinking safety for family members especially children. So far, A.O. Smith has taken a share of 13% in the water purifier market, ranking top among all foreign-funded brands.
Bullish on the Chinese market

A.O. Smith's former Global R&D Center held an R&D staff of nearly 100 for products of various categories, and received an accumulated R&D investment of more than RMB400 million. Its new R&D Center has launched after expansion with the staff increased to 200 employees. It is equipped with the world's most advanced computerizing devices and a patented tester for the performance of water heaters, both of which will be used to test all A.O. Smith household and commercial water heaters and to continuously develop more globally-leading energy-saving products.

A.O. Smith's forthcoming new plant base covers an area of 250,000 square meters, approximately double of the floor area of its existing plants. Installed with the most advanced production line for environment-friendly and energy-saving products, the new plants are planned to output 3 million water heaters annually, double of the company's current capacity.
As a leading brand in the water heater industry, A.O. Smith may look at the Chinese market more often in the future. As Ding Wei has said, A.O. Smith plans to double its sales renevue in China over the following five years. Concentrating on the research of sustainable hot water supply, A.O. Smith has clearly foreseen the ever-widening way ahead for energy-saving products. The company will also insist on the development of such energy-saving products as to meet different consumer demands and realize all advanced concepts relating to energy saving one by one, making the products with future quality and technologies available today for Chinese consumers.
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