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　Case Studies

Broad is a Changsha-based 100% private company; it is the leading global non-electric absorption chillers manufacturer and also an energy saving solution provider
·Broad Air Conditioning, established in 1988 with its headquarters in Changsha, is a 　
　100% Chinese private enterprise with approximately 2,000 employees
·Broad’s main products include central air conditioning non-electric absorption
　chillers, central air conditioning terminals and other energy saving products. Its
　products had been exported from Changsha to more than 60 countries
·In 2007, Broad’s revenue amounted to USD 900 million, an increase of 40 percent
　over 2006. According to the management, Broad holds more than 60 percent in the
　domestic non-electric chillers market, and around 50 percent in the USA, European
　and Middle-east markets

Broad Air Conditioning Co., Ltd

Broad has a commitment to enhance living quality, and benefits from the local investment environment
·Broad has pursued a “green” policy through its air conditioning technology. In 2002, Broad was commended by the United
　Nations Global Compact Learning Forum for being the only example of a company prioritising environmental protection in
　China’s air conditioning sector
·Broad is pleased with the favourable investment environment in Changsha. In our interview, management referenced the
　following examples:
-“The Changsha government is innovative in local investment policies to enterprises and continuously supports us. In the
　city’s marketing activities, the government actively introduces national and global leading companies and overseas
　diplomats to visit Broad, which helps to expand our reach in the world.”
-“Enterprise innovation has always been encouraged in the local culture, which also leads to the development of Broad’s
　core competency.”
　
Sources:(1) Company publications
　　　　(2) KPMG interviews

“Support from the creative government, greener environment and innovation are Changsha’s key advantages.”
- Mr. Ding Yuangang, Vice President of Broad Air Conditioning

　LG Philips Shuguang Electronics Co., Ltd.

LG Philips Shuguang is regarded as one of the most successful overseas investments by LG Philips Displays
·LG Philips Shuguang Electronics Co., Ltd. is a large-scale electronic enterprise jointly invested in 1994 by LG Philips
　Displays, Hunan Electronic Information Industry Group and Hunan Shuguang Electronics Group
·It is an important production base for Cathode Ray Tube (CRT) television, CRT monitors and key components in China
·In 2007, the total revenue of LG Philips Shuguang amounted to USD 500 million, with its sales revenue increasing at an
　annual average rate of over 30 percent

Companies in Changsha benefit from the rapid development of coastal areas and the government’s Western China Development Programme
·The favourable location and low costs were key in LG Philips’s decision to invest in Changsha ten years ago:
-“The operating cost in Changsha is relatively low compared with other cities. The high quality labour is available at a
　low price, and being central China, the logistics cost is favourable.”

·The local government is considered cooperative and reliable
-“The Changsha government has been cooperating actively with us and has done well in its commitments.”
　Sources:(1) Company publications
　　　　　(2) KPMG interviews

“We have enjoyed Changsha’s advantages of labour and logistics costs and government support.”
- Mr. Ha Joung Won, General Manager of LG Philips Shuguang

Interbrew

Interbrew, the largest beer producer in the world, has always shown keen interest in the Chinese market as a vehicle for business expansion. After comprehensive research into factors such as population, market capacity and market competitors, Interbrew focused on the region of Yangtze River delta and Pearl River delta for its expansion into China. Changsha’s unique geographic position in the south-China market, which acts as a hub that connects all regions in China, enables Changsha to play an important and enduring role in the planning chart of domestic beer magnates. In September 2003, Interbrew acquired 50% of Lion’s shares in China including Hunan Debier Brewery Company at the cost of USD$131.5 million, which made its total investment of USD$59 million in Changsha.