Haier, Sampo executives meet for talks on further cooperation

Taipei, Feb. 20, 2003 (CENS)--Chai Yong-sen, executive vice-president of the Haier Group of mainland China, on Feb. 18 met with H.C. Ho, president and CEO of Taiwan's Sampo Corp., to discuss possible expansion of cooperation ties between the two companies.

Haier is the largest home appliance/information technology (IT) conglomerate in mainland China. Chai is in charge of the conglomerate's home appliance, cell phone and personal computer businesses.

Sampo is one of the leading home appliance brands in Taiwan. It recently acquired Grundig AG, the largest home appliance brand in Germany.

Industry sources said that Haier expressed intentions to buy plasma display panel (PDP) and liquid crystal display (LCD) TV models from Sampo, while Sampo plans to import some white goods, such as refrigerators and air conditioners to Taiwan.

Haier and Sampo had previously formed a strategic alliance. Chai met with Ho for over an hour before taking a plane back to mainland China.

After its acquisition of Grundig, Sampo expects to export over NT$10 billion (US$287.36 million at US$1:NT$34.8) worth of air conditioners and refrigerators this year. Such business expansion is expected to further enhance Sampo and Haier's cooperation ties.

Industry sources said that the Haier and Sampo have complementary assets, as the former is the largest maker of white goods in mainland China but lacks the higher-margin products, such as PDP and LCD TVs, that Sampo can supply.

Haier last year procured about 100,000 air conditioner compressors from Rechi Precision Co., Ltd., a mainland subsidiary of Sampo, and the figure is expected to jump to 200,000 units this year. In addition, the mainland partner will also buy some higher-level refrigerator models and fly-back converters from Sampo's mainland plant in Tianjin.

Sampo and Haier signed an agreement in Hong Kong to form a strategic alliance. The tie-up was expected to create US$100 million to US$300 million worth of business opportunities in the next three years.

Sampo imported Haier's side-by-side refrigerator models for local sale in the second half last year. However, their cooperation has been limited by regulations in Taiwan restricting the import of some big-size home appliances from mainland China.

Chai kept a very low profile after arriving in Taiwan in Feb. 16. The major goal of his visit was to call on Haier's two major contract cell phone suppliers, Lite-On Technology Corp. and Compal Communication Inc., to upgrade their cooperation ties and discuss future orders.