Sampo to ally with mainland Chinese partners in digital TV set business

Nov 04, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Kunshan, Nov. 4, 2003 (CENS)--Taiwan's Sampo Group recently announced plans to cooperate with three mainland China-based information technology (IT) conglomerates, Haier, TCL and Legend, in digital TV business next year.

Sampo recently held a ceremony to celebrate the inauguration of a plant complex in Kunshan, Jiangsu Province, mainland China. Many dignitaries took part in the ceremony, including ranking officials of the Taiwan Affair Office of mainland China's central government and Haier, TCL and Legend groups, showing the Taiwan group's abundant business resources there.

Industry sources said that both Haier and TCL, two leading home appliance groups in mainland China, are Sampo's major contract customers, while Legend, the No. 1 IT conglomerate in mainland, has been actively in talks with Sampo over issues of possible cooperation ties.

Sampo general manager and CEO H. C. Ho said that his group had intensive contacts with the representatives of the three big conglomerates in mainland China during the 2003 Taipei International Computer Show (Computex Taipei 2003) over possible cooperation in the digital TV business. The four parties, according to Ho, recently made a decision to jointly tap the targeted market next year. If everything goes smoothly, Ho said, the scheduled project would be Sampo and Legend's first tie-up.

Ho said that Sampo would get a permission to sell 50% of its mainland-made products locally, and would directly ship digital TV sets to partners in the huge mainland China market. Ho stressed that his group would not push own-brand digital TV sets to compete with TCL, Haier and Legend but would help them boost sales there to create a win-win situation.

Ho claimed that Sampo's new plant complex in Kunshan would be the group's operation headquarters in China and is expected to generate an annual production value of US$50 million in three years and US$1 billion in five years, respectively.

Sampo chairman Felix Chen said that his group is expected to have revenue of about US$2 billion this year and the figure would grow by 20% to 30% per year in the coming few years. Chen also claimed that Sampo is scheduled to have annual revenue outstrip NT$100 billion (US$2.94 billion at US$1: NT$34) in 2005.

According to Ho, the Kunshan plant complex will become Sampo's global production base for audio/video, information and telecom products. In addition, the chairman added, Sampo is also mulling expanding the production capacity of air conditioners in mainland China by moving the current production lines in Taiwan and Dongguan, Guangdong Province, mainland China, to a new air conditioner production base there. Chen said that the new air conditioner production base will be located in eastern or northern China to meet the strong demand in the regions.
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