CONCEPCION INDUSTRIAL Corp. (CIC) is aiming to grab a bigger share of the market for air-conditioners, as it launches new products leveraging on the Internet of Things (IoT).
In a roundtable interview with reporters on Wednesday, CIC Chairman, CEO and President Raul Joseph A. Concepcion said demand for air-conditioners is rising amid the economy’s growth and rising income of Filipinos.
“Most of you know how difficult life is without air conditioners. It was never about the cost of the air-conditioners. It’s the usage… What wanted to find a gadget basically that would help the basic Filipino person in here. Only 12% of all families have air-conditioners,” he said.
Mr. Concepcion said the company, which currently has a market share of 35% for air-conditioners, is targeting middle-class consumers for its new products.
On late Tuesday, CIC’s newly formed Cortex Technologies Corp. unveiled its first product, the Carrier Smart+Cool system — which controls and tracks the usage of window-type air-conditioners through a plug connected to the air conditioner.
“[Right now, the] window rack [type of air-con] is the bulk of the market. We will have a market for high walls [split-type units] later in the year,” Mr. Concepcion said.
Concepcion-Carrier Air Conditioning Company director Harold Thomas Pernikar, Jr. said with the Carrier Smart+Cool solutions, the 12% penetration rate for air conditioners could go up to around 15% to 20%.
“Being able to provide real-time information with demand, you start to be able to turn around and say that maybe having an air-con is not so expensive to control because if I can control my budget, I can afford it. It’s not too expensive,” Mr. Pernikar added.
The product is expected to launch within the second quarter of the year.
CIC Chief Information Officer Sean Byrne said that Cortex Technology’s aim is to take “mature-level” technology from overseas and tweak it to suit the local taste in using highly digitized products.
Mr. Byrne said the goal is to see all CIC’s appliances adopt IoT to some degree, with the next venture might be for refrigerators.
Mr. Concepcion said around P50 million to P80 million was spent on the first stage of research and development conducted by Cortex.
“In terms of capacity, this year, we spend roughly double of what we spend usually in a year [for CIC]. Our annual capex is about P150 million to P200 million. Next year, we’ll spend double on that,” he added.
For 2018, CIC’s capex budget will be allotted for new facilities and new products.
CIC is currently building a new manufacturing facility which is expected to be operational by 2019.
The listed firm said profit after tax and minority interest (PATAMI) rose 8% year-on-year to P980 million in 2017. This follows a 12% increase in sales to P13.9 billion during the same period.
Mr. Concepcion said CIC expects 15% sales growth as it nears the P15-billion mark. — Anna Gabriela A. Mogato
