On 13 Aug 2008, Toshiba Corp. announced that it will acquire the remaining 10% stake in Toshiba TCL Home Appliances Manufacturing (Nanhai) Co., Ltd., a joint venture established by Toshiba and TCL, from TCL Corp., to make it a wholly-owned subsidiary. Wang Hongbo, the secretary to the board of directors of TCL told reporters that the acquisition will have no impact on the company's future development.

The aforementioned joint venture was established in March 2005 and engaged in the production and sales of refrigerators and washing machines under the 'Toshiba' and 'TCL' brands. The joint venture, with a registered capital of USD 18.13 mln, was put into operation in July 2006 with an annual production capacity of 700,000 refrigerators and 300,000 washing machines.

According to Wang, Toshiba had manufacturing advantages while TCL had done very well in terms of sales. Both companies just needed to figure out a proper way to cooperate, but not necessarily through establishing joint ventures.

The 2007 Annual Report of TCL indicated that sales income from the multimedia electronics industry and the communication industry generated more than 65% in gross revenue, while its home appliances business generated only as much as 10%. Analysysts indicated that the purpose of the cooperation between Toshiba and TCL was to maximize TCL's powerful sales network, return to the Chinese market and seek an expansion in it, however as it turned out, the result was unsatisfactory for both companies.

Toshiba Home Appliances Sales (Nanhai) Co., Ltd. is also a joint venture of Toshiba and TCL, in which TCL holds a 51% stake. But the company has no plan to change the current situation in Toshiba Sales (Nanhai), Wang said.

Source: Securities Times

Date: 15 Aug 2008

CN01/NW/DM/BT/KM