Daikin

To contend with the demand in the rapidly expanding air conditioning market in Brazil, Daikin Industries, Ltd. has decided to establish a new factory (site area of approx. 200,000 m2) for air conditioning equipment in the city of Mogi das Cruzes, located on the outskirts of Sao Paulo in the Federative Republic of Brazil, with production beginning at the start of 2014. At the new factory, Daikin will manufacture its multi-split type VRV commercial air conditioning systems to meet demand for air conditioning equipment at public and commercial facilities in Brazil.

Daikin first began selling commercial use air conditioners in the Brazilian market in 1992. Last year in May, Daikin established Daikin McQuay Ar Condicionado Brasil Ltda. (Head Office: San Paulo) as a subsidiary, and operations began in full-force from April 1st of this year. In addition to commercial use air conditioners, Daikin plans to sell a wide range of products in Brazil extending from residential air conditioners to large-sized air conditioners as it aims for sales of 35 billion yen in fiscal year 2015.

In the Brazilian air conditioning market, demand for air conditioning is expected to expand as capital investments accelerate accompanying infrastructure improvements for such large projects as the 2014 FIFA World Cup Brazil and the Rio de Janeiro 2016 Olympics. Furthermore, as the affluent class increases in size, the market for residential use air conditioning is also expected to see rapid growth. The air conditioning market in Brazil experienced sales of approximately 180 billion yen (Daikin estimate) for fiscal 2010, but in fiscal 2015 the market is expected to widen to over 400 billion yen (Daikin estimate).

In Brazil where sustained economic growth is anticipated for the future, it will be essential to develop products that correspond to local needs and supply them in a timely fashion according to demand. After considering investigation results that included the worldwide production system of the Daikin Group and determining the necessity for development of a full-fledged air conditioning business in Brazil, Daikin decided to establish a production factory at this time for air conditioning equipment in Brazil.

Daikin intends to proceed forward with a comprehensive production system and construct a sales network in the cities of San Paulo and Rio de Janeiro that comprise 60% of all air conditioning demand in Brazil. Not only does Daikin intend to implement equipment sales, but it also plans to accelerate full-fledged business development in Brazil by employing its own unique style of meticulous after sales service that includes establishing service bases in the main cities, fostering highly-skilled service technicians at Daikin authorized service providers, and implementing a 24-hour, 365 day-a-year contact center similar to those established in such countries as Japan and China.

[Outline of New Company]

1) Company name	:	Daikin McQuay Ar Condicionado Brasil Ltda.
2) Location	:	Sao Paulo, Federative Republic of Brazil
3) Representative	:	Takahide Shibata, President
4) Capital	:	81,901,000 real (approx. 4.3 billion yen) 1 real=52.4 yen
5) Investment ratio	:	Wholly owned subsidiary of Daikin Industries, Ltd.
6) Established	:	May 1, 2010
7) Sales	:	Approx. 1.5 billion yen (fiscal 2011 plan)
8) Areas of business	:	Air conditioning equipment sales and after sales service
9) Employees	:	Approx. 20 people (as of the end of March 2011)

[Outline of New Factory]

1) Location	:	Mogi das Cruzes, Federative Republic of Brazil
2) Investment amount	:	Approx. 5 billion yen
3) Established	:	Beginning of 2014
4) Site area	:	Approx. 200,000 m2
5) Production items	:	Commercial use air conditioners (VRVs, light commercial air conditioners, chillers, and air handling units)