A MAJOR STEP IN APPLIED INNOVATION. KCC Climate Management System. Powered by

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1 A MAJOR STEP IN APPLIED INNOVATION KCC Climate Management System Powered by

2 KCC Climate Management System Powered by THE POWER OF DISRUPTIVE TECHNOLOGY YIELDS A CUSTOMER-FIRST HVAC DESIGN STRATEGY REDUCES CAPITAL REQUIREMENTS LOWERS ENERGY COST KEY COMPONENT TO SUSTAINABILITY PROGRAMS IMPROVES CUSTOMER AND EMPLOYEE ENVIRONMENT LOWERS SYSTEM MAINTENANCE COST Corporate Office KCC International, Inc Grassland Drive Louisville, KY KCC Climate Management System - AirBoss P a g e 2 /16

3 52% of CEOs say energy and raw material costs are a threat to growth prospects, PWC Energy Cost Reduction Technology Challenge According to Forbes, global energy consumption will double by mid-century. Costs will inevitably continue to rise as demand for energy outstrips production. Organizations across the globe are searching for viable methods to lower their energy costs. Costs to heat and cool retail, manufacturing, service and warehouse environments are significant, growing, and critical to the comfort of retail patrons as well as employee productivity. This executive summary provides an introduction to a viable, economically smart approach to help tackle this problem. Proposed Solution HVAC systems control the air temperature and quality that customers and employees experience at facilities. Organizations must contend with how to deliver temperate conditions while managing the increasing energy costs to support HVAC infrastructure. The KCC Climate Management System powered by AirBoss is a system designed to efficiently manage the temperature of interior by constantly re-circulating the air in the space. Mounted on the ceiling, the constant movement of air reduces the load on HVAC systems which provides for even, controlled air temperature. The KCC AirBoss is not an application of fans blowing air around, but a sophisticated air handler that efficiently circulates air. The use of KCC AirBoss technology eliminates the need for internal ductwork, cuts the number of HVAC units required to heat and cool a space by 30 to 50%, reduces dust build-up, and dramatically reduces energy costs due to fewer installed HVAC units. KCC s Climate Management System powered by AirBoss Technology lowers upfront capital costs and monthly energy costs. This improves the bottom line while also reducing the organization s energy footprint. Already AirBoss is in place in over 40,000,000 square feet of industrial and retail space. Technology The KCC AirBoss unit receives supply air from a rooftop system and distributes it in three directions, much like a duct system does. The Air Boss continually re-circulates the air in the conditioned space. Rooftop units typically re-circulate return and makeup air 2½ to 4 times each hour, depending on the height of the ceiling, while the Air Boss unit re-circulates the internal building air 7 times. The Air Boss continually moves conditioned air throughout the space, sweeping the entire building s cubic feet. This constant re-circulation creates a temperature differential of less than 2 degrees throughout the entire space. The KCC designed system is more efficient which means fewer or smaller tonnage units are required to condition the space. The AirBoss de-stratifies the air in a facility because the air is constantly re-circulated. With a normal HVAC system, facilities develop hot and cold spots because the air stops moving. Until the HVAC system restarts, the still air develops into pockets of different temperatures. This change in temperature, in addition to hot and cold spots, creates bands of warm and cool air throughout the facility. A traditional HVAC system runs when the air KCC Climate Management System - AirBoss P a g e 3 /16

4 differential varies from the set temperature at the thermostat location and turns off when the temperature reaches what is called for on the thermostat. By design, a traditional HVAC system is never at the exact 'right' temperature, but works to stay within a range of expected temperatures. The KCC Climate Management System powered by AirBoss eliminates these issues and provides a constant temperature throughout. For example: Johnson & Johnson utilizes the KCC Climate Management System powered by AirBoss at a 300,000 square foot facility where over $1B in product must be maintained within +/- 2 degrees throughout the entire facility. In the heating season, the KCC designed system makes full use of all internal loads such as lighting, people, equipment, etc., as opposed to the inefficient use of this heat rising to the ceiling due to poor circulation. With the KCC Air Boss proprietary system, the capital costs, utility costs, maintenance costs and environmental costs (greenhouse gas) are favorably impacted. 48% of CEOs plan to reduce their environmental footprint in 2013, PWC Manufacturer Operating since 1977, KCC International, Inc. is an employee owned design-build and custom manufacturing company based in Louisville, KY. With revenue over $45M, the company operates with 250 full time employees and a staff of 18 engineers. The company has professional engineering licenses in 34 states and is on track for all 50. KCC has an active product development program, utilizing innovative and environmentally sensitive technology. Significantly, the company is an OEM manufacturer and also designs and produces commercial air conditioning units for one of the major HVAC equipment manufacturers. The lead engineer for the KCC Climate Management System is a graduate of Vanderbilt School of Engineering, has been with KCC for 15 years and previously was with Johnson Controls, Milwaukee, WI for over 15 years. Images from KCC production line. KCC Climate Management System - AirBoss P a g e 4 /16

5 Summary Energy conservation is no longer an ideal for which to strive. Energy conservation is a business requirement for success. Organizations across the board are implementing solutions to reduce their dependence on high-cost energy: automatic lights, efficient fleet vehicles, green building construction and many others. The KCC Climate Management System powered by AirBoss is another very effective solution to furthering the objective of controlling energy costs and continuing to apply downward pressure on those costs over time. This system will have an immediate and positive environmental impact with its substantial reduction of greenhouse gases. Sales Contact: KCC Climate Management System - AirBoss P a g e 5 /16

6 Additional Information Addendum 1: KCC Climate Management System powered by AirBoss Select Installed Projects Addendum 2: AirBoss Image Addendum 3: JOM Pharmaceutical (Johnson and Johnson) Installation Addendum 4: ebay Distribution Facility Addendum 5: Retail Installation Brief Typical (12,000 sq. ft. sized building) Addendum 6: AirBoss vs. Conventional Design Typical 400,000 ft² Facility Line Drawings Addendum 7: AirBoss vs. Conventional Design Typical 12,000 ft² Open Ceiling Retail Store Line Drawings Summary: KCC International, KCC Climate Management System Summary ADDITIONAL DATA FACILITY COST MODEL CONVENTIONAL VS. AIRBOSS SYSTEM DESIGNS EXAMPLES FACILITY COST MODEL CONVENTIONAL VS. AIRBOSS SYSTEM DESIGNS, Assumptions KCC Climate Management System - AirBoss P a g e 6 /16

7 Addendum 1: KCC Climate Management System Powered by AirBoss - Highlighted Projects Walmart Distribution Center 1,228,000 square feet, 2014 JOM Pharmaceutical (Johnson & Johnson) - 300,000 square feet, 2006 UPS - SCS (Pharmaceutical Logistics) - 297,000 square feet, 2004 Global Sports (ebay) - 4 locations, 1,500,000 square feet total, Honda of Indiana - 400,000 square feet, 2007 Honda of Ohio 400,000 square feet, 2011 Bailey Tools 7,000 square feet, 2006 Geek Squad (Best Buy) - 800,000 square feet, 2010 Guess Jeans - 500,000 square feet, 1999 RR Donnelly & Sons - 323,680 square feet, 1998 Trammell Crow - 480,000 square feet, 1999 KCC Climate Management System - AirBoss P a g e 7 /16

8 Addendum 2: KCC AirBoss Images ebay Facility JOM Pharmaceuticals Facility KCC Climate Management System - AirBoss P a g e 8 /16

9 Addendum 3: KCC Climate Management System JOM Pharmaceutical Installation Overview Customer: JOM Pharmaceutical Services (Johnson and Johnson) Location: Shepherdsville, KY Facility: Distribution Center, 300,000 square feet X 37 feet high Winter Operation: The system runs at 70 degrees while the outside temp is at 0 degrees F Summer Operation: The system runs at 70 degrees while the outside temp is at 95 degrees F Project Challenge JOM Pharmaceutical Services (JOM) planned to store up to one billion dollars of product in a facility that had to maintain stringent temperature requirements for FDA validation in the entire space of the facility. The building environment had to be continually monitored by a temperature grid of 150 sensors to ensure the design temperature was maintained +/- 2 degrees F. In addition, the owner required redundancy of heating/cooling units, as 78 degrees F would invalidate the efficacy of product. KCC Solution The recommendation was to install (17) 25-ton roof mounted gas/electric units coupled with the KCC AirBoss to provide the temperature requirements. As the maximum temperature of 78 degrees F could be achieved with only (12) 25-ton units, the redundancy need was inherently achieved. The system has supplied the proper temperatures from the first readings in 2006 to the present. Results By installing the (17) 25-ton rooftop units with corresponding KCC Air Boss, JOM experienced the following results: JOM was able to save over $1,100,000 in capital costs. By reducing the number of HVAC units, J&J further saved an additional $775,005 in future equipment replacement costs. JOM experienced a total cost of ownership-annualized reduction of over $110,000 No incidents for FDA validation and Factory Mutual approval KCC Climate Management System - AirBoss P a g e 9 /16

10 Addendum 4: KCC Climate Management System ebay Distribution Facility Customer: Global Sports International, division of ebay Location: Louisville, KY Facility: Distribution Center Three buildings, 221,000 sq. ft. facility and a 231,000 sq. ft. facility joined by a 40,000 sq. ft. connector building housing a break room and employee meeting area, all with a 30 ft. ceiling height. Project Challenge Provide heating and cooling for a new 40,000 sq. ft. connector building on a new construction project and install air-conditioning systems for the two recently purchased facilities to provide the same comfort levels as other Global Sports International facilities in the area. The customer requires 72 degrees F in all areas, including beneath large mezzanine areas in the two main facilities. The project must be completed without disruption to the customer s on-going operations. KCC International Solution The recommendation was to install (3) 20-ton roof mounted gas/electric units coupled with KCC AirBoss to provide 72 degrees F and all outdoor air requirements for the large meeting and break area. Each of the larger buildings was retrofitted with (12) 25-ton roof mounted air conditioning units coupled with KCC Air Boss. KCC installed smaller versions of the KCC AirBoss beneath the mezzanines to circulate the conditioned air. Results ebay was able to retrofit two large buildings and complete construction of a connector building while continuing to provide on-going services to their customers. Moreover, the comfort levels were achieved with the installation of 660 tons of cooling versus the competitor s proposed 900 tons of cooling. All ductwork was eliminated to condition the area below the mezzanines. The capital costs for the project were reduced by over $400,000 and the owning and operating cost savings are projected to exceed $150,000 annually. By reducing the number of HVAC units, ebay further saved an additional $225,000 in future equipment replacement costs. KCC Climate Management System - AirBoss P a g e 10 /16

11 Addendum 5: KCC Climate Management System Typical Open Ceiling Retail Store Installation Overview Customer: Assumed 12,000 square foot retail space with drop ceiling Location: Assume Indianapolis, IN Facility: Retail Annual temperature: Assume 74 degrees all seasons Project Challenge Reduce capital, utility and maintenance cost for a large retail chain competing in competitive marketplaces. Ensure a quality customer and employee experience while having a positive environmental impact. KCC International Solution The recommendation would be to install (1) 15 ton unit for the main retail sales space coupled with the KCC AirBoss and (1) 2.5 ton unit for the receiving, office and restroom space. Addendum 6 showcases the number of systems and tonnage that would be eliminated. Results Project capital cost for conditioning would be reduced by over $19,000 due to reducing the number of systems and lower electrical/plumbing costs. The utility costs would be decreased by approximately $4,200 per year with a maintenance/repair reduction of approximately $600 per year. Ongoing system operation would have a positive environmental impact, specifically with greenhouse gas emissions. The internal environmental impact would be positively impacted by reduced system noise, harsh blowing air and lower airborne dust. By reducing the number of HVAC units, the prototype further saves an additional $25,000 in future equipment replacement costs. KCC Climate Management System - AirBoss P a g e 11 /16

12 Addendum 6: AirBoss vs. Conventional Design Typical 400,000 ft² Facility Line Drawings KCC Climate Management System - AirBoss P a g e 12 /16

13 Addendum 7: AirBoss vs. Conventional Design Typical 12,000 ft² Open Ceiling Retail Store Line Drawings KCC Climate Management System - AirBoss P a g e 13 /16

14 KCC AirBoss - Climate Management System Summary Provides a quality building environment o Improved air quality o Lowers greenhouse gas emissions Cost containment for the capital cost of air conditioning systems and on-going systems operations o Capital cost lowered by 30 to 40 percent o Capital avoidance due to fewer units to replace in the future o Equipment maintenance cost reduction, both preventative repair and operational o Operating cost lowered by 30 to 40 percent Improves customer experience o Uniform facility temperature o Airborne dust control o Reduction of harsh blowing air RESULTS: The KCC Climate Management System powered by AirBoss will positively impact customer shopping experiences (REVENUE) and employee productivity (EFFICIENCY). It is a cost effective air-conditioning solution in every respect (COST). It will have a positive impact on Greenhouse emissions (ENVIRONMENT). KCC Climate Management System - AirBoss P a g e 14 /16

15 ADDITIONAL FACILITY COST MODELS CONVENTIONAL VS. AIRBOSS SYSTEM DESIGNS EXAMPLES

16 FACILITY COST MODELS CONVENTIONAL VS. AIRBOSS SYSTEM DESIGN EXAMPLES Assumptions This analysis is illustrative and provides guidance on how savings are achieved utilizing a KCC AirBoss design o Actual building/facility data is required to generate engineering design specs to provide specific design costs and benefits Operating Costs based on $.10/kwh Internal Heat Load AirBoss assumes savings based on taking advantage of de-stratification & internal load of building o i.e. modeling included assumptions of lighting, conveyor, operating hours etc. ebay, Bailey and J&J are AirBoss installations Amazon is conventional installation, designed by 3rd party engineer retained by Amazon Retro-Fit example shows possible retro-fit payback analysis Assume additional savings benefit if installations are in more extreme geographies (i.e. Orlando, Las Vegas) Prototype Retail facility analysis is based in Indianapolis, IN, with a 13.4ft high wall at rear of single slope roof, second HVAC unit support receiving area/offices/restrooms Capital Costs include all associated costs for a complete system, i.e. electrical, labor Internal and AirBoss Fan costs & Compressor costs are function of full utilization, discounting 30% for variability Retro-Fit example Capital Costs include AirBoss units only Amazon vs. Retro-Fit unit differential is a function of unique/complex design requirements for Amazon facility.