by Michael Kanellos
Honeywell (NYSE:HON), one of the world’s largest building management companies, and Haier Group (OTCPK:HRELF), China’s largest home appliance brand, are joining forces. The two global giants announced a memorandum of understanding on Friday to collaborate on developing high energy-efficiency solutions for everything from homes to mass transit.
From a broader perspective, the teaming of the two leaders is no surprise. Honeywell is already active in demand response and building controls, and has been scooping up smaller companies to broaden its offerings. There is a lot of opportunity for demand response in China, and surely market leaders like Honeywell would like a piece of that pie.
The companies will collaborate on intelligent and highly efficient appliances and heating solutions. They are also planning on new technology for building automation, home energy management and mass transit that is “more efficient and cleaner.” We’re not sure where the intersection of energy efficiency and cleanliness is, but this writer would welcome any such technology here in New York City.
Honeywell is also not alone in the China market gold rush. Recently, Johnson Controls (NYSE:JCI) was awarded an “Energy Saving Service Institution Record Certificate” that qualifies it to provide comprehensive building efficiency services in China.
China’s latest Five-Year Plan requires the country’s utilities, which are state-owned entities, to reduce energy sales volume by 0.3 percent a year through efficiency gains -- the equivalent of which could power one million U.S. homes for a year.
But this is not a one-sided agreement. Haier is just as interested in increasing its global footprint as Honeywell is looking to get deeper into China. Besides appliances, Haier is also looking to become a force in TVs, PCs and other electronics. "In addition to household appliances, Haier will develop high-performance and energy-efficient solutions in home furnishings, building automation, security systems, mass transit and other areas,” Shariff Kan, president of Haier America, said in a statement. “Our agreement with Honeywell will allow us to explore solutions that mutually benefit Chinese and American consumers and enterprises." For example, Haier will use some of Honeywell’s insulation technology to meet Energy Star requirements in the U.S.
The opportunities for synergy with both countries looking to cut emissions through efficiency are constantly growing -- and there will be more to come. Besides Johnson Controls' recent announcement, the U.S. Department of Energy also announced this week that building products manufacturer Saint-Gobain will join its U.S.-China Clean Energy Research Center for Building Energy Efficiency.
Disclosure: No positions