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Entrepreneur outsources AC production to China
Ten years ago, entrepreneur Andrew Singh began manufacturing air-condition units in Point Lisas, after two years of selling and servicing units through a company called Wilog air-conditioning.
Thirty-nine-year-old Singh, who was born in Mc Bean, Couva, went from servicing to manufacturing air-conditioners and then decided to outsource the production of the units to China, taking advantage of that country’s cheaper labour rates and higher productivity.
Wilog Group, through its fully owned subsidiary Delta Comfort Technologies Ltd Liability Company (DCT LLC ) now manufactures air-conditioners in China and is on a constant search for new markets to distribute their product listings.
“It is a lot of work to break into new markets, but it is one customer, one box at a time. We were able to grow the company to its global presence in seven years. We represent global brands with our flagship brand being Lennox, which has been around for over 130 years in the air-conditioning, heating and ventilation business. It is the world’s second largest air-conditioning brand, with our company getting this coveted franchise over five years ago,” he told the Guardian by phone on Monday from Miami.
Wilog air-conditioning, which is a subsidiary of the Wilog group, was started in 2004 by a group of professionals.
The first foreign market they entered into was the United States in 2014.
Since then they have entered into 26 new markets globally.
“The Lennox brand gave us the opportunity to partner with the second oldest central Heating Ventilation and Air-Condition (HVAC) company and gave us the footprint we needed to get into markets that carry the Lennox franchise. They gave us the all-clear this year to be not just the exclusive distributor in T&T, but also Guyana, Suriname and Belize,” he said.
In T&T they employ over 35 professionals and a cadre of sub contractors and distributors. Within the US and Asia over 20 professionals are employed in different management and engineering facilities.
They have three branches in T&T, with the corporate office in Port-of-Spain and distribution centres in Freeport and San Fernando.
Singh added that one month ago the company got the exclusive distributorship for Daikin Applied, which is another global brand.
“Because of this, we can push into heavy industrial application and air-conditioning work. So Wilog, in T&T, is the representative of four major global brands, Delta air-conditioners, Lennox air-conditioners, Anama Heating and Cooling products and Daikin Applied,” he said.
In 2013, Wilog Invested in the purchase of Delta HVAC which is a European brand.
“We made a bid and purchased the distribution and manufacturing rights for Delta. As a humble T&T company we were able to establish a global brand with markets in Europe, the United States, Latin America and the Caribbean,” he said.
Right now, they manufacture Delta air-conditioners in Zhuhai, China (under licence), having attained major certifications such as air-conditioning, Heating and Refrigeration Institute (AHRI), Energy Technology List (ETL) and UL listings within the US.
“In 2013 we set up offices in Asia under the leadership of our Asia managing director Mr Ivan Lo. We have two offices in Asia, one in Hong Kong catering to Global Finance and Marketing and in Mainland China catering to Quality Control, Engineering and Logistics. The name of that company is DCT Asia Limited. Our Asia Office is also responsible for managing the Asia/Pacific rim for Delta Sales and Engineering Support. Basically they are responsible for getting the brand into that part of the world,” he said.
Right now, their Asian markets include Vietnam, Philippines, Indonesia, Malaysia, and they are working on certifications to introduce the Delta to Mainland China and Australia.
“Our eyes are also set on the African continent and we are following these markets very closely to ensure seamless market entry into this dynamic region.”
Singh said economies of scale continue to drive production within China and the company remains committed to reinvent their business processes to encapsulate global manufacturing trends and technologies as they develop.
“In 2007 Wilog closed down its assembly
facility from Point Lisas, Trinidad, which allowed a greater focus to be placed on distribution and brand management. Attracting global brands required stringent focus on our brand development (BD) capabilities which has evolved considerably over the years. Our customers continue to be happy with our complete product portfolio which is hinged on all categories from residential to heavy industrial applications.”
He said it made sense to move Delta’s manufacturing to Zhuhai where they started in 2014. Annually, they manufacture between 50,000 and 60,000 Delta systems.
“We manufacture 26 different product categories for different markets globally and our Research and Development Engineers are always delivering content geared to improving efficiency and certifications.”
North, South America
DCT Inter America is Wilog’s next subsidiary which is based in Florida and this company is responsible for the management, engineering and distribution aspects of Delta air-conditioners within the US market.
“This office is also responsible for entry into the Caribbean and Latin America diaspora. We have Territory Managers for different regions. They are responsible for orders and delivery of products to our customers in Latin America and the Caribbean. We also have a warehousing facility in Florida,” he said.
Although, they have not entered the South American market, some of the Central American countries they have already entered into include Nicaragua, Honduras, Costa Rica, El Salvador, Belize and Panama.
In the last quarter of 2016, they hope to finally break into the Mexican market.
Their Caribbean markets include T&T, Barbados, St Vincent, Grenada, Aruba, Curacao, Jamaica, Dominican Republic and the Bahamas.
“We are also looking at Haiti seriously and had already engaged a leading distributor in that island. Since Delta air-conditioners are backed by AHRI, our Inverter products carry well into markets where energy cost are high. We are pleased to work with home owners and building management companies throughout the region educating and inspiring all segments on technology trends and training.”
He said it is a lot of work to enter into different markets with so many different requirements.
“An air-conditioning unit is not a pencil or a pen, it carries global certifications that need to be met for every country that you enter into.
So our Asian offices are responsible for working with all governmental jurisdictions to ensure that the products we manufacture conform to all their national entry certification requirements. We are selling across different platforms like different voltages, different energy needs etc. We are now UL and AHRI certified from the United States. This opens Delta up to a lot of competitive markets, “ he said.
He said they are working into getting into other European market like Brussels, Frankfurt Germany, Poland and Eastern Europe.
“We are currently speaking to several large distributors within Europe for the second quarter of 2017, we want to have several partners within these new markets,” he said.
Singh said their flagship brand Lennox commands a powerful market share in T&T, and has evolved to become a natural selection among building owners and their distributors.
“Our market is a mature one with different products geared to satisfying 100 per cent of market share through the global brands we carry.”
He said the universities and business schools in T&T need to continue to train and groom young entrepreneurs on the world of business and commerce.
“Young entrepreneurs need to be groomed and to get a shot at the wealth bank of the country. Companies need to continue their investment in young people. Everyone deserves that one opportunity and should work hard towards achieving their goals.”
He urged local companies looking for new markets to continue to be pioneers in their industry.
“Continue to achieve the economies of scale through re-engineering. Continue to put T&T first and ensure that locals are employed. Never see a recession as a period of panic. I prefer to see it as a process of renewal and change for your business. It is an opportunity for new strategies, new ideas” he said.
Looking into the future, he said the company does not rule out coming back to T&T to do manufacturing in some form.
“It may not be a completed product. It may be components like compressors, assembly of key parts that our global manufacturers may be interested in. It all boils down to the economics. The ease of doing business in T&T is also important,” he said.