Sampo Group to set up air conditioner plant in Guangdong

Taipei, April 14, 2003 (CENS)--Sampo Group said yesterday that its two affiliates--Sampo Corp. and Rechi Precision Inc.--would soon set up an air conditioner plant in Guangdong Province, mainland China.

With a total investment of about US$10 million, the proposed air conditioner plant is expected to turn out one million units per year in the future, making it the largest of its kind to be run by Taiwanese firms with operations in the mainland.

The board of Sampo Group has not yet decided on whether the new plant would be led by Sampo or Rechi. It is expected that Rechi may lead the investment, Ho Hang-chuan, CEO of Sampo Group, said.

Sampo has now owned a refrigerator plant in Tianjin, which will serve as a major production base for the group's AV and IT products.

Air conditioners, which have represented a certain revenue ratio of Sampo Group, will be produced at the new plant in Guangdong. This is expected to integrate the production of Rechi in Guangdong, where Rechi has already set up its own compressor and motor plant.

Due to the deployment of labor division across the strait, Rechi has moved the rear end assembly of its compressors to mainland China in recent years. Its mainland plant raked in revenue of NT$1.2 billion in the first quarter, up about 22% from the same period of 2002, the highest figure after the plant was established.

Meanwhile, Rechi's mainland plant delivered one million compressors in the first quarter, up 31% from the same period of 2002. As the largest air conditioner-used compressor maker in Taiwan, Rechi may produce a total of four million units in 2003.