TCL to expand procurements from Taiwan

Taipei, March 17, 2005 (CENS)--The TCL Group, a leading home-appliance conglomerate in mainland China, is expected to expand its procurements from Taiwan, according to Felix Chen, chairman of Taiwan's Sampo Group.

According to Chen, TCL chairman Li Dong-sheng is scheduled to visit Taiwan early next month to place more contract orders with Sampo and Rechi Precision Co., Ltd. (an affiliate of Sampo) for air conditioners and compressors, and to find contract partners to supply notebook PCs and cell phones.

Chen has maintained long-term friendship with Li and is an outside director of TCL's board. Chen said that TCL currently procures over 100,000 refrigerators from Sampo's plant in Tianjin, valued at NT$400 million to NT$500 million (US$12.99 to US$16.23 million at US$1: NT$30.8), per year. In addition, TCL also procures 800,000 to one million air-conditioning compressors from Rechi and has set up a joint venture, TCL-Rechi in Huizhou, Guangdong province, mainland China.

Chen pointed out that notebook PCs would be a new star product in mainland China, trailing cell phones and home appliances. TCL has expressed high interest in developing notebook PC business.

Li will visit several local notebook PC and cell-phone producers during his upcoming trip to Taiwan, including Uniwill Computer Corp., in which Sampo has a 24% stake, according to Chen.

Chen noted that Uniwill's plant in Suzhou, Jiangsu Province, mainland China produced 1.2 million to 1.3 million notebook PCs last year, with the volume expected to reach 1.8 million this year. If everything goes smoothly, Chen added, Uniwill is expected to directly ship notebook PCs TCL.

Industry sources said that TCL is expected to become a new heavyweight customer for local notebook PC and cell-phone makers in the future.

Representative of Konka Group Co., Ltd., another leading home-appliance maker in mainland China, also visited Sampo recently to procure refrigerators, liquid crystal display (LCD) TVs and plasma display panel (PDP) TVs, indicating that a series of capacity-expansion projects launched by Sampo in mainland China have helped it win more contract orders. Konka acquired the TV business of Tomson of France last year and set up TCL-TTE Corp., which became the world's largest maker of TVs in 2004 with a total annual output of 21 million units.