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Different from the first round, the investment is characterized as exclusively foreign-funded. As the world's number three, and Europe's number one white goods manufacturer, BSH shows great interest in independent development in the Chinese market.
On August 25, 2008, Roland Gerke, president and CEO of BSH China, who just returned from the group's headquarters in Munich of Germany to Nanjing, told reporters that BSH's board of directors had great confidence in the company's businesses in China, so decided to input USD 160 million of additional investments in its expansion projects there.
As early as in 2004, the European headquarters of BSH had made a decision to launch a second round of investment. In the past four years, the group took a string of actions in China.
On March 9, 2005, the BSH Industrial Park laid a foundation stone in the Nanjing Economic and Technological Development Zone, and was completed a year later. In April 2006, BSH's largest top freezer project around the world broke earth in Chuzhou City of central Anhui Province.
In 2007, the company invested EUR 50 million and built a plant in the Nanjing Industrial Park, producing 800,000 big- volume tumble washing machines a year. As of the end of 2007, BSH's investments in the country had reached USD 500 million.
According to Gerke, the USD 160 million will be inputted in building a tumble washing machine plant as well as an electric water heater plant in the industrial park, whose production capacity of the above products will double to 1.6 million and 500,000 a year after the two plants coming to service.
In 1995, when BSH first marched into China, its strategy is to form joint ventures with local partners. In Wuxi City of Jiangsu Province, BSW Household Appliances Co., Ltd. (BSWH) was set up with Jiangsu Little Swan Group Co., Ltd., producing tumble washing machines. In Chuzhou, BSH Home Appliances Co., Ltd. (BSHHA) was established with Yangzi Refrigerator, making refrigerators. In both of the two ventures, BSH takes a controlling stake.
But, since 2004, BSH became a lone wolf in China, independently conducting investment in the country. Though its tumble washing machine plant in Wuxi brought tens of millions of Chinese Yuan every year, the company had no hesitation in setting up the Nanjing-based new plant exclusively owned by itself.
Actually, in 2000, BSH has taken over a 30% stake in Yangzi Refrigerator, making money-losing BSHHA an exclusively held subsidiary. The next year, BSHHA made a miraculous recovery from five-year losses.
By the end of 2007, Siemens-branded tumble washing machines took a 33.5% market share in China in terms of sales, and that of Siemens refrigerators hit 15.6%, showed statistics by China Market Monitor Co., Ltd.
From January through July 2008, the sales of the two products above rose about 15%. Because their selling prices hiked nearly 5% in the period, their sales actually jumped 20%. BSH's supply to the Chinese market cannot meet the demand, that's why it is building new plants in the country.
(USD 1 = CNY 6.85)
From www.nanfangdaily.com.cn, Page 1, Tuesday, August 26, 2008 info@SinoCast.com
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