Teco, Sampo move ahead with cross-strait investment plans

Taipei, July 1, 2003 (CENS)--Teco Electric & Machinery Co., Ltd. And Sampo Corp. will resume investments in mainland China following the easing of travel restrictions between the two sides of the Taiwan Straits.

Teco chairman M.H. Huang will fly to Nanchang of Jiangxi province next month to sign a deal to set up a household appliance factory in the mainland. The NT$1 billion (US$28.6 million at US$1:NT$35) plant will make air conditioners, detergent-free washing machines and low voltage disconnect (LVD) television sets. The production launch date is scheduled for yearend, one quarter later than the originally planned.

Huang said the mainland is a very important market but competition in the household-appliance sector is intensive. He suggested that Taiwanese manufacturers should specialize in niche markets rather than trying to compete with the mainland's local manufacturers in output volume.

The Nanchang city government will provide a 7.2-million-quare-foot site for Teco's plant. About 10 Teco suppliers specializing in plastic products, coating, die-casting, molds and parts will also open facilities at the site.

Teco will make Taiwan the center for its R&D work and order receiving while shifting its production emphasis to the mainland.

Sampo, another local appliance maker, will expand output capacity at its mainland refrigerator factory to 500,000 units a year from 300,000 units now to meet soaring demand. The company plans to spend US$20 million on the expansions.

According to Sampo chairman S.T. Chen, the company's mainland refrigerator factory exports 60% of its output.