The Electrolux Group plans to buy out its joint venture factory in Changsha, capital of Hunan Province, this year as part of the Swedish company’s program to turn the plant into its global production base.
Electrolux said yesterday in Shanghai that it will pur-chase the remaining 40 per-cent stake in the joint venture from Changsha Zhongyi Group and turn it into a wholly owned subsidiary. It did not reveal the cost.
However, the electronics company said that its total investment on the Chinese mainland would reach US$170 million after completion of the share-purchasing program.
“We plan to turn the plant into one of our global production bases,” said Hans Straberg, chief executive officer of Electrolux.
The Changsha factory pro-duced 650,000 refrigerators last year, a figure that is expected to hit 1.3 million by 2006, said Straberg.
Electrolux also plans to turn China into its sourcing hub in the world, taking advantages of the low purchasing costs.
“We will strengthen our relations with Chinese suppliers which is the foundation for our success in China,” he said. “The annual sourcing volume can reach as high as US$1.2 billion annually in the following three years.”
Electrolux sells refrigerators, air conditioners and kitchen accessories on the Chinese mainland.