Electra HK Technologies Ltd
- 香港總商會會員編號 :
- HKE0256
Electra HK Technologies Ltd
The simple air conditioners that buzz in Hong Kong's windows and drip water on pedestrians' heads have changed little over the decades. The same cannot be said of the split-type air conditioners, however, which have evolved to be better described as indoor air quality enhancement machines, rather than air conditioners.
Interestingly, the world seems divided on which systems they prefer. In Europe, 90 per cent of all units sold are split-type air conditioners, while consumers in the United States prefer the window-type air conditioners.
"In Europe, people appreciate the aesthetics of the split type," Ilan Horowitz, managing director, Electra HK Technologies Ltd, said. "Also, people would just not accept the noise level that the window type makes."
Electra HK Technologies Ltd, was established in 1995 in Hong Kong as a subsidiary of Electra Consumer Products -- one of Europe's largest air conditioning and consumer electronics manufacturers -- to focus exclusively on designing and producing new electronics systems and consumer products.
"So this company is now the centre of all electronics in the Electra Group, from sourcing materials to designing to manufacturing," he said.
Half of the 60 staff in Hong Kong focus on research and development, while the remainder are involved in logistics and sales. Last year, the company invested US$6 million to open a 14,000 sq. metre factory in Dongguan, which employs 400 workers.
Mr Horowitz said he plans to set up an R&D team in Dongguan to work with the company's Hong Kong engineers. Even though his Hong Kong R&D department is doing well, he believes the company needs to tap into the deep pool of engineering talent that is available in the Mainland.
The Mainland is also where he expects his biggest competitors to come from.
"Our major threat is coming from Mainland makers. They can do things more cheaply than we can do. They are very aggressive, and they can offer solutions, albeit simple solutions," he said.
While he has no interest to enter a joint venture to strengthen its Mainland presence, he isn't ruling out the possibility of acquiring a Mainland firm to leverage its China sales.
"But the way for us to be competitive is to offer innovative solutions, fast time to market, and flexibility," he said. "We have invested a lot in the factory to make it flexible, and our demand flow technique has reduced our lead time from 55 days to 10 days.
Increasing innovation, design capabilities and communication with customers to convert their ideas into prototypes are "the thing the Chinese still cannot do because of language barriers, and lack of experience of how to manage a project," he said.
The Mainland currently accounts for 10 per cent of the company's sales, a figure Mr Horowitz said he satisfied with, and is in no real rush to expand.
The company's sales to the U.S. also account for about 10 per cent of total sales, but given American consumers' preference for window-type air conditioners, he does not expect the market there to grow significantly.
Instead, the company will focus on expanding its 15 per cent share of the Europe market, which accounts for 60 per cent of its sales.
Electronic Manufacturing ServicesBesides designing and manufacturing electronic control devices for its customers and own products, Electra makes and sells similar controllers to some of its competitors.
This may seem odd, but Mr Horowitz said he convinced Electra's president that doing so would be a better utilisation of the company's resources, and that outsourcing was a growing trend for companies looking to save costs.
"Look at all the big air conditioner manufacturers in Japan. They all set up their own compressor facilities, but they are selling them to other companies around the world, many of which are their competitors who are also making air conditioners," he said.
The Japanese have, for the most part, resisted the idea of outsourcing for components. Even though it is increasingly common for companies to do so, Mr Horowitz said outsourcing is still an alien concept for many Japanese businesses. European firms have been quick to take advantage of Electra's electronic manufacturing services (EMS) because they often have their original designs, but just need a company to manufacture for them in China as cheaply as possible but at the right quality.
EMS also allows Electra to increase the volume of products it produces, and therefore more cheaply, as well as keeping the factory running.
"It is a good penetration idea as well, because it allows a company to try you out on assembly, or testing, or design, which are all added-value services to the manufacturing process. Business people have to be conservative, but once you show them you can deliver what they want, sooner or later they will commit the design of their products to you," he said.
That also allows Electra's customers to take advantage of its breakthroughs in research and development, which range from short-term projects to two- to three-year projects. Most recently, the company developed an innovative ionizer that fits inside an air conditioner unit. Measuring about the size of a slim mobile phone, the unit generates negative ions, collects dust which then drop out of a hole in the bottom of the unit, and results in no ozone generation.
Mr Horowitz said the unit sells for just US$12, but would add significantly to the value and features of an air conditioner for a manufacturer, especially when incorporated with other innovations, such as a humidifier to control air moisture, and a power regulator to double energy efficiency.
For the future, people should expect to see more and more features incorporated into appliances. Indoor air quality treatment and enhanced energy efficiently are the two biggest trends that he foresees, as well as networking devices.
"In Europe, people like all appliances to be linked to a network or the Internet to have a service centre monitoring them," he said. "I think Hong Kong will catch up quite fast in this area, especially with developers wanting to offer customers something unique."
