To deal with post-WTO competition, Taiwan's major home-appliance maker Sampo Corp (
"We want our outlets to be a platform that provides a variety of choices to people who want to buy home appliances," Sampo's CEO Ho Heng-chung (
Starting from today, Sampo will sell White-Westinghouse's products at Sampo's 850 retail stores around the nation.
White-Westinghouse's local agent -- Diastar Home Appliance Co (
White-Westinghouse is a subsidiary of Sweden-based Electrolux AB, a major global maker of home appliances.
"We will gradually switch our retail channel from current outlets such as hypermarts to Sampo stores," Diastar Chairman Titan Chung (
According to Ho, Sampo estimates that sales of White-Westinghouse products sold in its stores will hit NT$300 million this year.
He added that, in about two years, Sampo will become White-Westinghouse's sole distributor in Taiwan.
Sampo plans to use franchising to increase its retail network to 1,000 outlets by the end of this year.
This is not Sampo's first international alliance deal.
Last month, Sampo signed an agreement with Haier (海爾), China's largest home-appliance maker, to sell each other's products via the other's retail stores.
Ho says these two deals are just the beginning of Sampo's plan.
"We are still talking with several international players, and we hope to bring their products to Taiwan," Ho said.
Meanwhile, Diastar's Chung said the deal helps them to cut costs.
"Because of the alliance we can eliminate the overhead cost of setting up stores," he said. "We try to use as little as possible manpower to push products around the nation."
In return, Sampo is expected to get bigger production orders from Diastar.
"In 2002, we will get more than NT$700 million in original equipment manufacturing orders from White-Westinghouse -- mostly for refrigerators and washing machines, double that of last year," Ho said.
Also, after linking up with Haier, Sampo is set to manufacture about 250,000 refrigerators this year, generating nearly NT$2 billion worth of sales.
Sampo plans to make manufacturing its core business over the next few years.
"As Taiwan's home-appliance market is very limited, we have to find another source to boost sales and to improve our competitive edge," he added.
The venture plans to significantly increase its percentage of sales from original-equipment manufacturing for other global brands.
Sampo wants to reach NT$1.4 billion in sales for 2002.
The company's shares rose 0.6 percent yesterday, closing at NT$17.50.