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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (25197)	11/13/1997 12:38:00 PM
From: DiViT	Read Replies (1) \| Respond to of 50808

Changhong broadens focus... Cube VCD customer 11/13/97 South China Morning Post Page 1 (Copyright 1997) ÿ Changhong may not be a household brand to foreigners, but it is the name on one of three colour television sets sold in China. With an entrenched position in the mainland, Sichuan Changhong Electronics Group Corp, which makes the top Changhong televisions, is taking on a greater challenge - to become a Fortune 500 company by 2005, with annual sales of at least of 100 billion yuan (about HK$92.83 billion). That would put it in the league of world giants such as General Motors. Changhong expects a strategic alliance with Toshiba Corp of Japan, which entails co-operation on all fronts, will transform the industrial enterprise into China's Samsung, which clinched similar deals with Toshiba 10 years ago. Changhong vice-president Yuan Bangwei recalls that Toshiba's president and chief executive Taizo Nishimuro said after the signing of the co-operation agreements in September: "Changhong will be another Samsung in the foreseeable future." Samsung is now South Korea's second-biggest conglomerate. At the time of its deal with Toshiba, Samsung was the same size as Changhong is now. Planned projects include joint production of digital versatile disk ( DVD ) players and air-conditioners, taking advantage of Toshiba's leading DVD technology. Changhong, which is based in Mianyang, Sichuan province, expects sales to reach 100 billion yuan by 2005, five times this year's projection of 20 billion yuan. The expansion drive, in line with Beijing's call to groom corporate giants capable of competing in global markets, has made Changhong a model for emulation by other mainland firms. It leads in television manufacturing and is monitored closely by industrial players. Changhong triggered a price war last year when it lowered prices, prompting small players to follow suit to hold market share. This year, it has made a bold move to spend about 800 million yuan to build eight production lines for wide-screen sets, mainly 25-inch and 29-inch models. After more than 20 years, Changhong is one of a handful of mainland manufacturers that can hold their own against imported products. Until the early 1970s, Changhong was a producer of military radar for the People's Liberation Army. Foreseeing the vast potential of the mainland consumer market, the company re-allocated most of its resources and expertise to the manufacture of black and white TV sets. In 1985, it received the break that set it on the road to fast growth when it introduced Japan's Panasonic production lines for colour televisions - just before Beijing issued a ban on such moves. The fierce price war in the mainland's television industry last year further strengthened Changhong's ability to respond to a changing market. The company's head Ni Runfeng, recognised as the mainland's top management guru, received international recognition last year when Asia Magazine named him one of Asia's entrepreneurs of the year. This was in addition to a long list of awards at home. Changhong made 4.8 million colour sets last year. It plans to produce 6.5 million this year and 8.5 million next year. It had a domestic market share of 22 per cent in 1995, which rose to 27 per cent last year. It is projected to reach 33 per cent this year and 40 per cent next year. Having gained a solid foothold in the crowded television sector, Changhong now is eyeing the telecommunications industry, which is showing rapid growth. Talks are under way with unidentified foreign telecommunications companies on technology transfers for development of products in the mainland. Mr Yuan said: "Telecommunications is a new-found sector in China that offers enormous growth and warrants plenty of demand in the future. "In terms of production technology, there remains a yawning gap between China and developed countries such as South Korea and Japan. By introducing technology from abroad, home industries will be more effectively enhanced." Plans also have been mooted to boost existing production capacity of electrical appliances by 50 per cent, backed by the establishment of a production facility in Mianyang New and Hi-Tech Industries Development Zone, costing two billion yuan. The 133-hectare facility will be China's largest manufacturing base for electrical appliances, churning out televisions, air-conditioners, washing machines and microwaves as Changhong diversifies. The scale of the project already has generated excitement in China's electrical appliances industry. Other players are watching the development. Other projects that will adopt foreign technology include the development and manufacture of car batteries, with negotiations under way with Toshiba and Panasonic.