By Sarah Falson
THAILAND: Japanese electrical company, Sanyo Electric Co, is set to hand over its biggest Thailand refrigerator plant to the Haier Group in an effort to revive earnings and cut production costs, according to China Knowledge.
Sanyo has agreed to make the Haier Group, the Chinese mainland’s largest electronics and appliance manufacturer, its only OEM (original equipment manufacturer) of refrigerators, the news report said. Accordingly, 90 per cent of the flagship plant, which makes approximately one million refrigerators a year, will be sold to Haier before the second quarter of 2007.
According to the report, Sanyo suffered losses in the 12 months up to March this year, to the sum of approximately 20 million yen ($A219.5 million).
“Meanwhile,” said the same report, “Haier’s Shanghai-listed unit Qingdao Haier posted a 26 per cent increase in third-quarter net profit as gross profit margins for air-conditioners and refrigerators rose.”
In a statement to Current.com.au, Haier Australia Pty Limited CEO, Karl Qin, said: “Sanyo and Haier have a long co-operation history. Sanyo has already built a few factories within Haier industrial parks in China.
“We were offered the Sanyo Thailand fridge plant two months ago. [The fridges made there] are frost-free and are suitable for the Oceania market.
“We asked them to do some tests to see if these products would pass MEPS [Minimum Energy Performance Standards regulations in Australia].”
According to Qin, Haier is holding extra cash due to the head office’s failed bid for American appliance manufacturer, Maytag, last year, which is subsequently distributed in Australia by the local market’s biggest-selling appliance-company, Whirlpool.
“You see that [Haier] did not get Maytag last year in America. [Therefore], Haier still has cash in hand. Late last year, Haier bought the Daewoo factory in India. I am not surprised at all about Haier’s actions in Thailand.”
Qin suggests that the Haier Group could be due for some similar acquisitions in the future.
“My personal opinion is that Haier will buy more well-known brands in the future,” he told Current.com.au
An official agreement regarding the Haier Group’s acquisition of the Sanyo refrigerator plant has not yet been published.