Investing in China pivotal to Carrier’s long-term growth
Carrier Global Corp, a global provider in intelligent climate and energy solutions with a century of history, has embarked on a new journey toward “a new Carrier” focused on heating, ventilating and air conditioning, or HVAC; and refrigeration.
The company said that China, which is committed to high-quality and sustainable development, will continue to be a pivotal market and Carrier aims to use its expertise to support China in achieving its carbon reduction goals.
Carrier became an independent public company in April 2020. According to Dave Gitlin, chairman and CEO of Carrier, the public listing presented the company with a significant opportunity to define its identity and chart its future course.
“The clear vision is to be the global leader in intelligent climate and energy solutions,” said Gitlin. “So the new Carrier (will be) all about sustainability, maintaining a laser focus on using data and intelligence to provide our customers with sustainable solutions.”
So the new Carrier (will be) all about sustainability, maintaining a laser focus on using data and intelligence to provide our customers with sustainable solutions.”
Transformation
Over the last few years, Carrier has been transforming to optimize its product portfolio to become more focused on its HVAC strategy. Businesses that no longer align with Carrier’s simpler, pure-play global climate leadership focus are being divested. The company has clear priorities for the planned business: moving swiftly to maximize value. In December, Carrier announced agreements for the sales of its commercial refrigeration and global access solutions businesses, and in March, it announced an agreement for its industrial fire business.
Carrier has also acquired premium businesses with the goal of strengthening its foundation. In January, it completed the acquisition of Viessmann Climate Solutions from the Viessmann Group, marking a new milestone in its journey.
“We think that focus can help us create a new culture, a new team, a new north star, and that focus can really galvanize our entire workforce to provide solutions for our customers,” Gitlin said.
Presence
China, which has been promoting its green and low-carbon energy transition in a bid to achieve a carbon peak before 2030 and carbon neutrality before 2060, will continue to be a pillar market in Carrier’s transformation plan, according to Gitlin, who paid a visit to China at the end of February.
Starting with a joint venture in Shanghai in 1987, Carrier has established a sizeable footprint in the HVAC and refrigeration sectors in China. It has built an industrial chain that encompasses research and development, production, marketing and management in the country.
Carrier operates several facilities in China, including regional headquarters in Shanghai, 300 sales and service branches, 11 manufacturing sites and five R&D sites. It boasts a workforce of 11,000 employees, and its solutions have been applied in a large number of landmark projects in the country, including the Beijing Water Cube, Oriental Pearl Tower in Shanghai, Hangzhou Olympic Sports Center Stadium and many important metro lines.
It has also forged robust connections with local partners and suppliers. Products and solutions developed in China have been exported globally to serve the international market, according to Gitlin.
“It is phenomenal,” said Gitlin. “We’re very proud of the team that we have here and their ability to support our customers as they execute their strategies and initiatives around decarbonization.”
Gitlin said over the last few years,
Carrier has been realigning its business focus in China to serve evolving demand and seize growth prospects. Presently, 75 percent of its sales revenue is derived from industrial infrastructure such as data centers and electric vehicle production, a significant increase from 30 percent five years ago.
“Our whole strategy as a company is to go where the growth is,” Gitlin said. “This year our team is targeting high growth in China, and I’m very confident that we’ll get there.”
Looking ahead, Carrier will continue to expand its operations and investment in China. As one of the largest HVAC markets, the country is vital to Carrier’s growth strategy in the Asia-Pacific region, said Gitlin.
“We look at the world and we always say we control the controllables, and we invest globally and we invest in China. We’ve invested nearly $500 million in China over the last five years. We will continue to invest in China,” he said. “We’re going to invest in our operations, R&D and in life-cycle solutions that include connected products and digitally enabled products.”
In China, Carrier’s customers can anticipate a comprehensive multichannel brand strategy, according to Gitlin.
“We can have different brands for different tiers within the customer base,” Gitlin said.
In addition to Carrier products manufactured in China and the United States, Carrier now offers customers a range of brands including Viessmann from Germany, Toshiba from Japan, Giwee from China and Riello from Italy, each tailored to meet diverse customer demands.
Furthermore, Carrier aims to expand its distribution channels and extend its reach to additional lowertier cities in the coming years.
Dave Gitlin, chairman and CEO of Carrier
“We want to be present not only in tier-one cities, but very targeted in tier-two and tier-three cities. We really see such an opportunity for growth, not only in China, but in this part of the world,” Gitlin said.
Meanwhile, Carrier will transform into a life-cycle solution provider, engaging engineers from the product design stage and providing support throughout the product’s lifecycle, according to Gitlin.
“Some of these chillers will last 20, 30 or 40 years, and we want to be there to provide maintenance and upgrades through connected offerings for the entire life-cycle of these products,” Gitlin said.
“We are committed to continuing to invest in long-term growth in China and creating ongoing success for our customers.”