Sampo Benefits from China's Policy to Promote Household Appliances in Countryside

Taipei, Feb. 4, 2009 (CENS)--The Taiwan-based Sampo Corp., one of the island's top five household appliance suppliers, has won a big order for 70,000 fridges from the Chinese government as the only Taiwanese company benefiting from China's policy of heavily promoting white goods in the countryside, according to company sources.

According to Sampo, a company seeking to bid for China's purchases of household appliances for sale in the country's rural regions must be certified to meet ISO 9000 and 14000 standards and have an over 90% coverage rate of consumer services in the country. Noteworthy is that Sampo is the only Taiwanese company operating in China to gain such business opportunity so far.

Eric Chen, chairman of Sampo, noted that his company, in light of business opportunities brought by the policy, has resumed OEM (original equipment manufacturing) business at its plant located in Tianjin City, northern China, hoping to vie for contract orders for 400-liter and above refrigerators from large-sized brands, including Haier, Hisense, TCL, Midea and GE, in the Chinese market for household appliances.

In fact, the plant used to supply refrigerators for GE on an OEM basis until 2005, when skyrocketing prices of copper and aluminum made the plant unprofitable and forced the firm to shut down the production line. However, with copper and aluminum prices dropping, the firm hence decided to restart the line to scramble for profitable contract orders in connection with China's policy.

Chen added that the plant, located in Tianjin, has a geographic advantage in the race, able to efficiently supply rural regions in northern China. On the other hand, Sampo will also consider retrieving contract orders from GE.