PLUG-IN FRILUX CASE. December 2013

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1 PLUG-IN FRILUX CASE December 2013

2 GROWING MARKET Sales growth in the air-conditioning, refrigeration, ventilation and solar heating (refrigeration market) segments is being driven by the Brazilians increased purchasing power, expansion and modernization of factories and commercial spaces, as well as expansion in infrastructure works stimulated by the arrival of the World Cup and the Olympics. The favorable outlook should generate good business for the refrigeration market in the coming years, according to the Brazilian Association of Refrigeration, Air Conditioning, Ventilation and Heating (ABRAVA). The entity estimates an 8% growth this year, a figure higher than the 2.9% projected for GDP. Even with the high tax burden and high dollar, the refrigeration market is expected to reach US$ 15 billion in revenue. Of this total, the industry represents close to US$ 9.9 billion, primarily driven by refrigeration in the transport and storage of food and beverages; followed by commerce, US$ 2.4 billion; and services, US$ 2.5 billion. Regionally, the South East holds 61% of the sector, followed by the South, with 13%. The newest trend is that the North is increasing its participation, which now accounts for 10%, the Midwest with 9% and the North with 7%. 9% 13% 10% 7% Southeast South Northeast Midwest North 61% In this business scenario, also growing is the pursuit for increasingly more agile refrigeration innovations and processes that contribute to reducing the impact on the environment and to the growth of the sector s demand. One of the greatest challenges for commercial system manufacturers is optimizing assembly and maintenance processes, in order to provide service gains amid a workforce which is becoming increasingly more expensive and over time, increasingly scarcer. As a refrigeration sector leader Embraco seeks to understand the customer s market to promote the sector s growth in an accelerated and sustainable manner.

3 COLOMBIA OMBIA SLOVAKIA LESOTHO BANGLADESH CONTINUOUS INNOVATION In this context, Embraco, world leader in hermetic compressors for refrigeration, has dedicated itself to study the logic of innovation to develop and offer increasingly more intelligent solutions for the global market since 1971, the year it was founded. Embraco has a production capacity exceeding 37 million units per year. Its more than 12,000 employees work in factories and offices located in Brazil (headquarters), China, Italy, Slovakia, Mexico, United States and Russia. Its leadership position is the fruit of a consistent innovation and technology policy. Historically, Embraco invests between 3% and 4% of net revenues in funding research and development. It follows long-term planning and has a state-of-the-art structure, with more than 40 research & development (R&D) laboratories and 500 professionals working in this area. As a result, close to 70% of the organization s revenues are generated by products launched in the last four years, an index reached by understanding the markets in which it operates. Only in this way is it possible to offer innovative and effective solutions through agile and sustainable processes. Such efforts can also be demonstrated by the number of patents registered every year. Embraco has more than 1,277 patents, being the Brazilian company with the most patents in the United States.

4 INTELLIGENT SOLUTIONS Embraco developed this year, 2013, the Embraco Plug-in, to meet the commercial refrigeration market s needs which require each time more agility and innovation, both in Brazil and in the global market. It s a sealed unit manufactured in Brazil. A complete solution that can significantly decrease the assembly and repair time of refrigerated display cases. The innovation was created for commercial applications, with the ability to cool self-service cabinets of up to 2000 liters. The new solution has a national technical assistance network, competitive price and quality assurance seal from Embraco. Another Embraco Plug-in benefit is the ease of installation, which can be done by an operator and with more agility. Compared to conventional assembly systems, the Embraco solution can reduce a 1 hour assembly time to 20 minutes per equipment.

5 HISTORY Frilux Refrigeração, Embraco s customer located in Mafra, Santa Catarina, uses the Embraco Plug-in system to serve customers in the gastronomy refrigeration and equipment distribution segments. In less than one year of use, the company has reduced production costs by more than 10% and increased its equipment manufacturing speed by over 100%. Before, we took an hour to assemble the equipment, now the maximum time is 20 minutes. Claudiomiro Mensch director of Frilux Claudiomiro Mensch, director of Frilux, says that the company had encountered difficulties in the Brazilian market to offer a secure system that would provide greater autonomy and reliability to its customers. Embraco studied Frilux s needs in-depth to propose a solution capable of contributing to the company s business. Through tests conducted in partnership with Frilux, it was possible to reach a tailored result: Embraco developed an on-demand Plug-in with important features, such as: Ease and speed in preparation and implementation; Low level of problems due to a smaller number of processes involved in assembly; Complete solution for cooling systems; Lower maintenance effort; Ideal equipment for self-service cabinets of up to 2,000L. Beyond the benefits stated by Frilux, our customer has experienced a reduction in the number of field problems, since the entire Plug-in system is assembled by us, which brings reliability and Embraco s quality assurance seal. Embraco s guarantee has been proven over the nine month partnership with Frilux. Until now, we haven t had any replacement or problem. Natanael Kaminski, corporate marketing director at Embraco

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