KOOLKES SENDIRIAN BERHAD: How Cool Can The Fridge

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Koolkes Sdn Bhd: How Cool Can the Fridge Be?refrigerated showcases,” deliberated Mr. Han when explainingthe various suppliers.COMPETITORSAccording to a salesman, the market for refrigerated display showcase equipmentsis very competitive. Electrolux and Hussmann (see Appendix 1) were the marketleaders in Malaysia from 1987 to 2000 and used to represent their parent companies;each for Swedish and American manufacturers respectively. However during aperiod in 2000, the exchange rate for the Swedish Kroner and the U.S Dollarincreased in comparison to the Malaysian Ringgit. As a result, Electrolux insteadmarketed equipments made by Fukushima of Japan and Hussmann had its casesmade by Nakano, also from Japan. Both products were branded respectively asElectrolux and Hussmann, as it was much cheaper for the companies to buy fromJapan rather than their home countries.In 1992, Bonnet Neve from France entered the Malaysian market throughLeading Refrigeration Sdn. Bhd. and in 1993, T. M. Cooling Technology Sdn. Bhd.became its distributor until 1994. It was then marketed by Zenick EngineeringSdn. Bhd. The salesman also explained that entry of Bonnet Neve was verytimely as the rate of France Franc was low and stable then, thus it managed tocontrol 30% of the market for refrigerated showcases equipments. Bonnet Neve,unlike Electrolux and Hussmann, only worked using its local representatives forsales and installation and also provided engineering expertise. The companyhad sales representative’s offices in Singapore and South Korea to cater for itslocal representatives all over Asia. It had plans to have its refrigerated showcaseequipments assembled locally and eventually to have them manufactured here.Bonnet Neve’s production of showcases was about 30,000 cases a year and 7,000of these were exported to Asia annually.The lead time from the date of order until delivery to customers would takeapproximately 90 days, including shipping which would require about 4 weeksfrom France to Asia. Bonnet Neve was scouting for a local company for a jointventure in this project in Malaysia. The strategic position of Malaysia in Asiawould mean that shipment will be faster and this will translate to earlier delivery.Manufacturing time would be reduced and hence, prices of the refrigeratedshowcases will be greatly reduced as the costs of labour, freight, warehousingand inland transportation were lower. Bonnet Neve was also waiting to takeadvantage of ASEAN Free Trade Area (AFTA) as it would benefit substantiallyfrom the reduced taxes and thus, would make its products price very attractive.Linde from Germany also made its appearance in the market scene in 1992with its first Asian sales representative office based in Hong Kong. However,Linde practiced direct sales to supermarket owners and its local representativesonly carried out the installations, warranty and after-sales services. From 1992 to151
Asian Journal of Case Research (AJCR)1996 its local representatives in Malaysia was United Refrigeration Sdn. Bhd. butwas replaced by Hub’s Engineering Sdn. Bhd. since 1996.Other competitors were Arneg from Italy, represented by Kong ChuanRefrigeration Sdn. Bhd., Croisbanc from Italy, represented by SommervilleMalaysia Sdn. Bhd. and Kohxa from Spain, represented by Chief, themanufacturer itself.The frequent changing of local representatives by reputable and big suppliers,such as Bonnet Neve and Linde, were mainly because local representatives couldnot meet their high technical standards. As a result, the suppliers lost their salesas the local representatives’ after-sales services and customer service were weakand unsatisfactory.The number of competitors grew as the food retailing industry expanded.The Malaysian society became more affluent and advanced and this changed theirshopping patterns. Shoppers preferred convenience when shopping and a onestop-shop suited their needs. Mr. P.K. Gong noted,“Families nowadays would want to go to shopping complexeswhere they can shop at the department stores, eat at the foodcourt or restaurants, see movies at the cinema complexesand get their groceries at the supermarket, all in a visit – howconvenient! The society has also become more health consciousand preferred hygienic and safe practices in food handling andstorage found in refrigeration system.”MANUFACTURINGThe manufacture of refrigerated display showcase equipments with remotecondensing system such as multi-deck and island chiller/freezer display showcasesdiffer greatly from self-contained (condensing unit) chiller cases with heated glassdoors. The former required high technology and R&D to get the correct flowof refrigerated air in cooling the display cases with a minimal loss of coldnessand lower energy consumption. Incorrect designs for their airflow curtains maycause warm air and dust to be trapped inside the showcases. As a result, watercondensation may happen within the showcases and cooling efficiency will bereduced. These cases must be acclimatized to local conditions (different ambienttemperature, humidity, etc.) for optimum performance. Airflow curtain designshowever, were not required for the self-contained chiller cases as the heated glassdoors prevented the cold air from leaving the cases.Remote condensing system was used mainly in hypermarkets and supermarketsbecause these outlets required a huge number of refrigerated showcases. With itscondensing system comprising of several compressors located in the compressorroom or outside the building, heat generated from the condensing system would152
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KOOLKES SENDIRIAN BERHAD: How Cool Can The Fridge

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