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Hefei Rongshida Sanyo Electric Co., Ltd. (SHSE: 600983), with Sanyo Electric as its second largest shareholder, planned not long ago to achieve an annual production value of CNY 5 billion in approximately three years, and increase its annual sales by 700% in the period.
In 2008, Rongshida Sanyo's sales are expected to reach CNY 1.2 billion, compared to CNY 600 million in the previous year. And its net profit was forecasted to exceed CNY 100 million.
Presently, Rongshida Sanyo is engaged in the construction of a new factory for washing machine production, covering a land area of 80,040 square meters.
The first-phase construction was completed days ago with three new production lines capable of manufacturing 1 million propel type washing machines and 500,000 tumbling-box washing machines in total. And the whole project will be completed at the yearend, boosting the company's production capacity by 250 washing machines.
Part of the money for the new factory meant to be used to enlarge Rongshida Sanyo's production capacity of washing machines for industrial use, until Sanyo Electric decided to transfer the assets of its two washing machine factories in Janpan and one in Vietnam into the China-based company with an overall production capacity of 2 million propel type washing machines and 300,000 tumbling-box washing.
Later, Rongshida Sanyo will be responsible for the production of Sanyo Electric's washing machines for the global market, said an executive of Rongshida Sanyo, which hopes to operate the Japanese giant's digital products and other white appliances in the future.
In the 2004 financial year and the following half year, Sanyo Electric suffered a loss of about USD 3 billion. Then it began to peel off many businesses short of competitiveness.
The round of business reduction has come to an end, and the company became profitable again in the 2007 financial year, said a senior Sanyo executive, but on the other hand, its civil and commercial product businesses were squeezed to a large extent. In 2007, it provided the Chinese market CNY 23 billion worth of products, including only CNY 3.3 billion civil and commercial products.
He believed that it was time for his company to re-enhance the businesses, especially in China, where the civil product market is still at a growing phase.
Since 2004, the company has not carried out big investments in the country. But in March 2008, it acquired a 30% stake in Dalian Bingshan Group Co., Ltd., a Chinese company engaged in refrigeration and air conditioning equipments.
And not long ago, it retreated its LCD TV sets from the stores of Suning Appliance Co., Ltd. (SZSE: 002024) and Gome Electrical Appliances Holdings Ltd. (SEHK: 0493), the country's two largest retailers, as an effort to cut distribution cost.
From www.hexun.com, Page 1, Tuesday, August 05, 2008 info@SinoCast.com
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