Sampo Corp (聲寶), a major home-appliance and electronics company aims to move nearly 80 percent of its manufacturing business to China by the end of 2004, an executive of the company said yesterday.
"We will gradually move low-end production such as monitor and DVD-player manufacturing to China. The production of high-end items, such as plasma-display panels, will remain in Taiwan," said Stephanie Shih (
The majority of value-added manufacturing will remain in Taiwan, where total production value will still account for 50 percent of Sampo's annual revenue, Shih said.
In an effort to reach that goal, Sampo will consolidate its business units in China into a single manufacturing base.
"By the end of next year, we will move almost all of our information-technology production to Kunshan, Jiangsu Province," said Chen Chao-chou (
Sampo has already established production bases in Suzhou, Kunshan, Dongguan and Tianjin.
The company invested tens of millions of US dollars expanding its Kunshan factories last year, Chen said. "The consolidation aims to lower operational costs and boost efficiency," he said.
In February, Sampo signed an agreement with Haier (
China has become Sampo's priority market, not only in terms of manufacturing but also for market access.
"The China market is very attractive to all foreign companies. Nevertheless, it's difficult to establish an effective distribution network there," said Wei Hung-da (
"Our alliance with Haier will provide Sampo with direct access to economically dynamic markets," he said.
In addition, the move cuts costs and shortens the logistics process.
"We can eliminate the high cost of shipping by producing monitors in China and then sell them there," Chen said.
Sampo will first move all of its monitor production to Kunshan by the end of this year, shipping about 5 million monitors annually from the site.
Sampo will gradually move its DVD player and LCD production to Kuanshan next year.
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