Yes. Cube VCD customer(China Daily, 7/3/97).................................
chinadaily.net
Successful firm sets an example
THE take-off of Changhong Electric Appliance Ltd, of Mianyang city in Sichuan Province, has greatly expanded the fame of the city.
The ongoing infrastructure construction in the city attracts group after group of visitors from different parts of the country and from abroad. They come to learn from Changhong's successful experience or to hold business talks with Changhong officials.
Evolving from a military production unit, the top household electrical producer held 27 per cent of the country's colour-TV market last year, a big share compared with other electrical-goods producers.
With an annual 50 per cent economic growth, Changhong last year produced 4.8 million colour TV sets with a sales income of 12.5 billion yuan ($1.51 billion).
Looking back on how Changhong made the transition from a State-owned military-production unit to that of a consumer-goods producer, its success lay in its pursuit of the development of economies of scale under a market situation, said Changhong President Ni Runfeng.
While other firms spent their profits on improvements of office facilities or construction of new workshops rather than expanding production scale, Ni's company spent 1 billion yuan ($120 million) on technical renovation and introduction of new technology.
Meanwhile, the company set up 15 new colour-TV production lines, making the company capable of producing 6 million colour TVs a year and greatly reducing production costs.
Changhong's total assets grew from 68 million yuan ($8.2 million) in 1984 to 11.9 billion yuan ($1.4 billion) in 1996.
Ni expects his company will hold 33 per cent of the country's colour-TV market this year and 40 per cent next year when the company will be capable of producing 8 million colour TVs.
Ni said Changhong will start to produce 37-centimetre colour TVs during the fourth quarter of this year.
Changhong has also started to diversify its investment.
It is preparing to produce air conditioners soon. It plans to produce 400,000 video discs this year and 2 million next year.
Changhong also plans to build a digital video disc production line.
Changhong's development has drawn the attention of the entire nation as ways are sought for successful reconstruction of State firms.
Sichuan Province's provincial government, in particular, hopes all its State firms learn from Changhong's example.
Revitalizing State firms is an important task for Sichuan Province, eager to be a strong economic power in the country's western region, according to Sichuan Governor Song Baorui.
State firms play a big part in the local economy of Sichuan, Song said.
Last year, the State sector of the province contributed 10 billion yuan ($1.2 billion) to provincial revenue, or 66 per cent of the total.
Yet reconstruction of State firms -- most of which are money-losing -- requires a bewildering amount of funds for technological renovation or for management improvement.
"And nobody will offer the money. We must depend on ourselves," Song said.
Song said his province encourages money-losing State firms to link up with thriving firms in coastal provinces, such as those of Guangdong Province.
Song added that the province is transforming some loss-making State firms into shareholding companies. The effort has saved some State firms facing bankruptcy.
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Date: 07/03/97
Author: Pang Bo |
