| Submission Entry: | 1.) Given that buildings consume 40% of global energy, within which at least 40% is consumed by HVAC systems, how has the goal of 1.5 C additionally impacted your product development strategies? What specific product design elements have you incorporated to support the 1.5 C goal? (150 words) (106)Answer: Rheem is committed and leading with actions on limiting global warming to 1.5 deg.C and to reduce dangerous effects on climate change. Sustainability is key aspect in all stages of our Product-Development-Process(PDP). Early in PDP, we gather key representatives from our R&D, Sourcing, Manufacturing, and other teams for Sustainability-Strategy-Sessions. In these sessions, our teams consider eight-factors focusing on the product’s impact on environment, and four on its social impact. Our sustainability strategy wheel and PDP help us to integrate sustainability into final product(Attachments1&2). To make it clearer to our customers, the most sustainable products in our lineup will also bear Rheem’s Sustainability Standout Seal™ mark.
Rheem’s Ducted Inverter Lineup, 1.5-5.0ton exemplifies this commitment as it can deliver impressive EER up to 12.2 at T1 conditions. This unit comes with highly advanced inverter compressor, and BLDC motors on indoor/outdoor side(Attachment3&4).
2.) Describe the bigger picture that you see as a manufacturer/supplier of Standalone DX equipment. How does the sustainable development (ESG & energy efficiency) movement in Saudi Arabia impact/influence you as a manufacturer or supplier? (150 words) (107)Answer: Rheem's three main global sustainability initiatives are:
Degree of Innovation-Rheem aims launching line of products with 50%reduction in GHG-footprint by 2025, supporting SDG7:Affrodable-and-Clean-Energy. Rheem's Ducted-Inverter lineup have high-efficiency inverter compressor which reduces overall power consumption supporting Saudi Arabia's Net-Zero-2060 goal.
Degree of Efficiency-Rheem targets to reduce GHG-emissions by50% and achieve Zero-Waste-to-Landfill across Rheem's global manufacturing operations by 2025 supporting SDG12:Responsible-Consumption-and-Production.
Degree of Leadership-We will train 250,000 plumbers/contractors on sustainable products, installation, and recycling best practices by 2025. This resonates SDG4:Quality-Education. We also have comprehensive plan to train/upskill individuals in KSA at our Innovation-&-Learning-Centre(ILC) in Riyadh, supporting Saudi Arabia Vision-2030 goals, contributing to broader development/economic objectives.
Rheem's dedicated global sustainability team publishes progress reports every year for above mentioned goals(Attachments5&6&7). Rheem's Ducted-Inverter units are built to comply/exceed Rheem,Saudi Arabia,& GCC's sustainability goals(Attachment8).
3.) To what extent do you believe you have the scope to feel concerned about, and to contribute to, the sustainable development of Saudi Arabia? How frequently are you able to precisely meet the specific needs of consultants and of developers/builders (clients)? What proportion of your annual revenues is from a "business as usual" approach to deliver the equipment? What specific actions have you taken to persuade consultants and clients to look beyond business as usual? (150 words) (108)Answer: Rheem places a strong emphasis on contributing to the SDG. We have established a Product-Excellence-Panel(PEP) consisting of consultants, contractors, regulators. This collaborative approach ensures that our products align with the specific needs of market and clients. Our product development journey emphasized collating Voice-of-Customer(VOC). We engage with stakeholders, from project inception to completion, and actively incorporate their feedback. This collaborative approach ensures that our products align with specific needs of the market and MEPs of Saudi Arabia. Our recent development of ducted inverter series is a testament to our global collaboration efforts.
We have invested and recently opened Rheem’s biggest Innovation and Learning Centre in Riyadh which is targeted to train and persuade more than 1000 consultants and customers per year in sustainability aspects of the products. This investment emphasizes Rheem’s willingness to look beyond the business and train people of Saudi Arabia in product sustainability matters(Attachment9).
4.) What is your strategy for allocating budget for R&D? (150 words) (109)Answer: Our approach to allocating R&D budget is well-defined, with following priorities:
New direction of Rheem is to have local R&D setup with established world class processes and test labs.
Prioritizing investment in various tiers of products.
Focusing on development of innovative and sustainable product solutions.
Engaging in partnerships with renowned universities, including Purdue University, University of Illinois, University of Colorado, etc.
Allocating resources to support Low-GWP refrigerants.
Sponsoring undergraduate projects at universities, and collaborating with global institutions to achieve net-zero goals.
Rheem supported project led by University of Maryland has recently won US Department-of-Energy $2.3M grant to develop a 10-ton commercial rooftop cold-climate heat-pump with R290 natural refrigerant with almost 0-GWP(Attachment10).
We currently have 7 R&D-centers, 20 lab facilities and over 500 engineers and as we continue to expand our investment in R&D, our goal remains steadfast to deliver the most sustainable products(Attachment11).
5.) As a manufacturer/supplier, what specific actions do you take in terms of handholding on installation and training on operation? (150 words) (110)Answer: In February-2024, Rheem opened its biggest Innovation-&-Learning-Center in Riyadh. In there, different ranges of Rheem’s products are shown in running conditions where service teams from different companies get hand on training on the products(Attachment 9).
We have introduced North-American-Technician-Excellence(NATE) certification program in GCC which guarantees quality of knowledge acquired by technical staff responsible for product installation and commissioning. Currently Rheem is training 100 NATE-certified technicians across GCC.
For VRF lineup, we have structured training modules that focus on installation, operation, features, and specifications. We also provide after-sales training on service/maintenance, which are crucial for optimal performance(Attachment12).
We offer access to Rheem Academy, where our service team, pro-partners, and customers enroll in various online training courses. Over 500 training courses are currently on this platform.
By 2025, Rheem aims to train 250,000 plumbers, contractors, and key influencers on sustainable products, sustainable installation, and best practices for refrigerant recycling/recovery.
6.) What energy-efficiency goals have you set as a corporation over the next 5-, 10- and 20-year horizons? Can your equipment offer outcomes beyond what is expected? [Note: The transformation could be in technology, business process, product development, R&D, human resources (keeping them motivated and inspired, as the basis for innovation).] (150 words) (111)Answer: Our manufacturing of ducted inverter lineup is at Rheem’s GCC facility. This will foster a reduction in embodied carbon and efficient supply chain. This leads to reduced energy consumption, and lower emissions during manufacturing. This move aligns with Saudi-Green-Initiative and emphasizes development of sustainable and resilient infrastructure.
Throughout the development of ducted inverter series, our primary focus has been to meet and exceed requirements set by regulatory bodies such as SASO including SABER, QCC, ESMA, and MEW. This entailed optimizing our lineup so that efficiency requirements are met while ensuring compliance with green building authorities such as Saudi Green Building code.
As an international organization, we recognize the importance of fostering a culture of innovation and sustainability within our organization. This includes initiatives to motivate and inspire our human resources, encouraging them to contribute to our long-term sustainability goals through R&D efforts, process optimization, and forward-thinking solutions.
7.) What are you doing to speed up the product development cycle to comply with fast-evolving MEPS requirements? (150 words) (112)Answer: Our product roadmaps are meticulously designed to align with the rapid changes in MEPS requirements, both on a global scale and within the GCC region. We maintain active engagement with key regulatory bodies, including SASO including SABER, GSO, ESMA, AHRI, and PAI, as well as collaborating with notifying bodies such as SGS, UL, and Intertek.
Active engagement with regulatory bodies ensures that our products are strategically planned of time, considering any changes in regulations. Because of Rheem’s global footprint whenever draft regulation is published, we are getting a copy to review/comment.
As members of Eurovent and AHRI, we participate in quarterly meetings that provide crucial updates on regulatory changes. Our global product strategy focuses on the incorporation of state-of-the-art technologies that surpass MEPS requirements, ensuring our products remain at the forefront of energy efficiency advancements(Attachment11).
8.) To what extent are you incorporating synergistic AI, IoT to bring about improvement in how your equipment are used? How much are you as an organisation adopting/utilising AI and IoT to contribute to a qualitative change in performance, such as improving energy efficiency? (150 words) (113)Answer: As we witness increasing adoption of smart home technology, our control solutions have been a central focus. We've implemented advanced control solutions for our ducted inverter lineup portfolio. These innovations empower both contractors and homeowners to have a more seamless and efficient experience with our equipment.
Through a dedicated gateway that connects to Wi-Fi, our lineup can now be remotely monitored and controlled. It also allows to minimize electrical consumption during no occupancy hours as the units can be turned off as it won’t be required. Scheduling, prognostic & diagnostic, timer function, fan mode selection are all other features of the Rheem’s ducted inverter controller.
Across our manufacturing facility, we have adopted various AI technologies for unit assembly. This integration of AI enhances efficiency and precision, ensuring that our products meet the highest quality standards.
9.) In the past one year, how many of the projects you have served secured a Green Building certification? And under which rating systems and at what level of certification? (100 words) (114)Answer: Rheem's Ducted-Inverter units have been adopted into several large-scale regional projects. Because of the inverter compressor and smart control features, these units are anticipated to have substantial contribution to achievement of SDG targets. Over last year, we have successfully finished 4 green building projects where we were able to adhere to green building requirements.
For example, one of the projects consisted of G+10floor and in this project, we supplied our Ducted-Inverter units which resulted in lower energy consumption. This allowed us to acquire green building points according to Dubai-Green-Building requirements. The consultant was Arkiplan Consulting Architects & Engineers.
10.) What pricing policy do you follow as a manufacturer or supplier of Standalone DX equipment (less chillers)? What are you doing to attract customers - lowering cost of goods and aftermarket services, offering attractive warranty terms, other unique value propositions, etc.? (150 words) (115)Answer: Our existing pricing structure comprises of Material, Labor, Overhead, and Margin. To maintain competitiveness, we regularly conduct pricing checks with our competitors' rates to ensure that we offer our customers the best value for our products.
We also extend additional benefits such as cashback offers, which ensures that they reap financial rewards for orders.
We also provide comprehensive support services, including help desk assistance, complimentary NATE certification and Rheem Academy training, free branding materials, Cool saver energy calculator for Ducted Inverter series, and dealer incentive programs for our sales channels.
Our dedication continues throughout the project lifecycle, offering onsite and off-site technical support during installation, T&C and warranty period. We also have swift warranty claim processing, with most claims approved within just 30 minutes. In certain cases, we offer warranty extensions free of charge, tailoring our support to meet our customers' specific needs (Attachment13).
11.) What management strategies and guidelines have you established to counter payment delays and other such instances, which are affecting your cashflow as a manufacturer or supplier, and are preventing an ideal building construction eco-system (involving all stakeholders) from forming? What creative strategies are you utilising to circumvent/overcome cash flow challenges? (150 words) (116)Answer: Rheem has established a framework of guidelines, internal controls, policies, and processes to ensure the effective management of cash flow within the organization.
To safeguard receivables, we have employed an approach that includes securing transactions with letters of credit, facilitating advance payments, and implementing credit insurance measures.
On the payables front, we always offer favorable payment terms for our distributors and customers. Furthermore, our regular cash flow forecasting plays a pivotal role in our financial strategy. Not only does it assist in predicting future expenditures for the business, but it also serves as a valuable tool for optimizing cash flow management throughout the organization.
12.) What do you envisage the future of HVAC to be? What futuristic scenario are you working towards in product development? What are you doing that makes your equipment reliable; affordable; minimises harm to the environment (air, sea, water... during production, operation and disposal after the equipment has ended its lifecycle); makes the equipment easy to install; makes it possible to overcome systemic faults in design, construction and installation disciplines? (250 words) (117)Answer: We envision that the future for HVAC will place an emphasis on sustainability, enhanced IAQ, operational efficiency, and ease of use. In our future product development, we are working diligently to implement these.
One key aspect that we are working on is transition to low GWP refrigerants. We are actively researching alternative refrigerants to minimize harm to the environment. This move aligns with global efforts to reduce greenhouse gas emissions and combat climate change.
Another crucial focus is improving IAQ. We are designing all our to not only provide optimal temperature control but also ensure the purity and healthiness of the air being circulated. This contributes to a healthier living and working environment and minimizes the transmission of viruses and bacteria.
We are developing advanced controllers that make equipment operation and servicing easier, streamlining maintenance processes, and enhancing overall reliability.
At our production facility, we have implemented refrigerant leak capturing equipment to minimize the release of harmful substances into the atmosphere.
Additionally, we are expanding our production lines in the MEA region, aiming to reduce embodied carbon and promote local manufacturing. This not only enhances affordability but also aligns with sustainability goals by minimizing the carbon footprint associated with transportation.
13.) Anything else you wish to say, which you feel would bolster your case? (150 words) (118)Answer: Our ducted inverter lineup stands out as it is one of the few lineups amongst other competitors that will be manufactured in the Middle East. This strategic transition will help in reducing operational carbon because of the presence of high efficiency inverter compressors and reduced embodied carbon emissions. By manufacturing locally, we are significantly reducing the environmental impact associated with long-distance transportation.
Additionally, the adoption of sustainable practices within the local manufacturing process such as capturing of refrigerant leakage will truly allow us to extend beyond our sustainability goals. Our commitment to producing in the Middle East enhances our regional growth and innovation. The lineup is also composed of advanced features that are enabled to cater to the harsh climate of GCC such as refrigerant cooling PCB, multiple protection devices, golden fins coating to protect the coils and operation up to 55 °C(Attachments14&15&16).
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