Teco to produce home appliances in mainland China

Taipei, April 4, 2003 (CENS)--Teco Group, a leading electrical machinery and home appliance conglomerate in Taiwan, recently announced that it would invest about NT$1 billion (US$28.74 million at US$1:NT$34.8) to set up a home appliance production base in Nanchang, Jiangxi province, mainland China.

Teco said that it would ally with several leading international home appliance brands, including Whirlpool of the U.S., Mitsubishi Electric of Japan and Rhoss of Italy, and over 10 local satellite plants and parts suppliers in the production base project.

Huang Mao-hsiung finalized the investment project with Nanchang government officials in Taiwan. The project is expected to become Teco's largest investment in mainland China. The Nanchang municipal government will provide a 700,000-square-meter campus for the facilities of Teco and its partners.

Huang said that investment incentives offered by the Nanchang government further elevate the international competitiveness of the production base.

He added that the other international partners would provide sales channels and other resources for the venture.

The production base is expected to have an annual capacity of at least 200,000 to 300,000 units of home air conditioners. Teco also plans to make commercial air conditioner systems and other white appliance (refrigerators, microwave ovens and washing machines, etc.) and audio/video products at the Nanchang base.

Huang said that his company plans to introduce new home appliances to tap the competitive mainland market, including detergent-free washing machines, liquid crystal display (LCD) TVs, and high-end air conditioners.

Some senior Teco officials said that since mainland China has become a global center for appliance production, their company needs to establish beachheads there to remain globally competitive. They claimed that the Nanchang project would greatly cut costs especially in the production of air conditioners.

Industry sources said that Teco has been developing strategic ties with Whirlpool in recent years, and has also set up an air conditioner compressor venture in mainland China last year with Mitsubishi. Rhoss, a leading air conditioner brand in Europe, is Teco's latest international partner.

In addition to the appliance production zone, Teco's heavy-duty motor plant in Wuxi, Jiangsu Province, mainland China started mass production recently. The ambitious conglomerate is also planning a high-tech manufacturing zone in Wuxi to develop information technology, electronics and office automation (OA) furniture and equipment businesses.

An industry insider said that Teco would transform its Taiwan headquarters into an order-receiving, design, R&D and trial-production center and transfer mass production of new items to its plants in mainland China in the future.