Major home-appliance maker Sampo Corp (
"Sampo is poised to manufacture about 250,000 refrigerators this year for its mainland partner, Haier Group (海爾), generating nearly NT$2 billion in new revenue," said Wei hung-da (魏宏達), an analyst at KGI Securities Corp (中信證券).
The deal goes a long way to help Sampo reach its target of NT$14 billion in revenue for this year, Wei said.
Another senior official at Sampo added that the company decided to focus more on its production ability over the next few years.
"We try to increase [the percentage of] our sales coming from the manufacturing sector," said Sampo spokesman Hsieh Kuo-hsiung (
Hsieh refused to elaborate on the venture's manufacturing sales and refused to confirm the NT$2 billion deal.
On Wednesday, Sampo signed an agreement with Haier, China's largest home-appliance maker, to sell each other's products and to steer clear of each other's original equipment manufacturing (OEM) businesses.
Sampo, which has three factories in China, said most of its manufacturing plants in Taiwan should be moved to China.
According to a statement issued yesterday by Sampo CEO Ho Heng-chung (
Ho added that, after Sampo cuts costs, the company's first-quarter profit will rise 30 percent from a year ago. "We will cut overhead, which will save about NT$20 million a month."
A 30 percent increase would give the company net earnings of NT$819 million. Sales will increase as much as a quarter over the period, Ho said.
Getting more direct access to the global market is the other benefit Sampo gets out of the cooperative venture, Wei said. "Currently, about 80 percent of Sampo's sales come from the domestic market."
However, the nation's home-appliance market is very limited, and operators have to aim for the global market in order to survive.
For example, the number of TV sets sold annually in Taiwan is about 600,000, while the figure in China is more than 2 million, Wei said.
"With this agreement, Sampo will be able to sell products to China and other overseas market through Haier outlets."
Haier currently operates 58,800 outlets around the world and recorded nearly NT$17.2 billion in sales in the year 2000.
Haier products will also be put on Sampo stores' shelves. There are about 900 Sampo outlets nationwide.
According to Ho, Taiwan's first imports of Haier products will start to arrive in three months, and China will start importing the first Sampo products at the same time.
Sampo will sell Haier's televisions, refrigerators, air conditioners, and washing machines in Taiwan. In return, Haier will sell Sampo's DVD products and flat-panel monitors.
Sampo has ordered 50,000 TV sets from Haier, these will be the first Haier products to be imported to Taiwan.
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