IN BRIEF

A Royal Philips Electronics NV booth at an exhibition in Beijing. China has been designated as one of the company's home markets. Keith Bedford / Bloomberg

Fosun to buy 9.5% stake in Folli Follie

Fosun Group, the largest privately owned conglomerate in China controlled by billionaire Guo Guangchang, signed an agreement with Greek luxury retailer Folli Follie to purchase 6.36 billion of additionally issued stock valued at 13.3 euros per share.

Once the purchase is final, Fosun will own a 9.5 percent stake in Folli Follie. It will also support the expansion of Folli Follie in the Chinese market, said Guo, chairman of the Fosun Group.

Folli Follie has $90 million (64 million euros) of sales volume in China and operates 90 stores in 27 Chinese cities.

Established in 1992, Fosun Group has widely diversified operations in pharmaceuticals, property development, steel, mining, retail, services and strategic investment.

Auto

Michelin drives up investment in China

China will be the major investment destination for French tire maker Michelin SA in the next three years, with the company planning to expand production and enhance research and development capabilities, the company's top executive revealed.

"We are planning a 1.6-billion-euro investment in emerging markets in the next few years, including China, Brazil and India, as we see huge potential there to further drive our future development," said Michel Rollier, general managing partner of Michelin Group.

"And we have already decided to use $1.3 billion (926 million euros) to $1.4 billion of the investment for production facilities in Shenyang, Liaoning province."

Michelin also plans to expand its retail network for passenger vehicle tires in China. It currently has more than 3,000 dealerships across the country.

Mercedes-Benz expands R&D

Daimler AG's Mercedes-Benz plans to provide more tailor-made vehicles and technologies to cater to increasing customer demands in China, the luxury carmaker's third-largest market.

Ulrich Mellinghoff, head of safety development at Mercedes-Benz, said the company will further strengthen its research and development (R&D) capability in China by expanding its small, local R&D team to about 500 engineers.

"We are doing a few models only for China (such as) the stretched version for the E-Class (sedans). And, in the future, I think we can have a stretched version for the C-Class, too," Mellinghoff said.

Health

SCA attracted by aging population

The Swedish manufacturer of hygiene products Svenska Cellulosa Aktiebolaget (SCA) has opened a new innovation center in Shanghai to expand its penetration in China's fast-growing market for products for an aging population.

It is SCA's first innovation center outside Sweden. The initial investment will total around 20 million yuan (2.2 million euros) and the total investment figure may rise depending on the company's performance in China.

SCA said it will increase its focus on China's aging population because it is an emerging market with great potential.

The center will become SCA's core base for research and development in the Asia-Pacific region. The company will start with a focus on incontinence care and gradually expand its scope to other categories, said Stephan Dyckerhoff, president of SCA Hygiene North Asia.

Food

Nestle raises production capacity

The Swiss food and beverage giant Nestle SA expects to announce expansion plans in China in the coming months, after boosting its seasoning production capacity in Dongguan, Guangdong province.

The company said on May 24 that it plans to invest 320 million yuan (35 million euros) to lift annual capacity at its instant food and seasoning factory in Dongguan from 15,000 tons to 40,000 by 2015.

"We are increasing our capacity rapidly in every category of our products," said Roland Decorvet, chairman and CEO of Nestle China adding the company may announce more plans in the next few months.

The capacity of the factory could be ramped up to 100,000 tons in the next few years, he said.

Electronics

Philips elevates China's market status

Royal Philips Electronics NV has elevated China's status to that of a "home market", as it decentralizes management and encourages regional markets to learn from China how to obtain higher growth, according to Frans van Houten, chairman, president and chief executive officer (CEO) of the company.

He said his first priority after taking the helm in April is to "create a sense of acceleration" in the Dutch company. China, with a growth rate of 20 percent last year, has become a model for the company's global operations.

"For the headquarters, you have to be more enabling, rather than controlling," said Van Houten, during his visit to China.

In the first quarter of 2011, China became Philips' second-largest market, with sales of 478 million euros, higher than the 344 million euros registered in Germany and equal to one-third of its sales in the United States.

Chemicals

Bayer breaks ground for Qingdao plant

Bayer AG broke ground for a new polyurethane plant in Qingdao on May 24. The polyurethane project, located in Qingdao's Economic and Development Zone, will involve a total investment of between 200 million yuan (21.8 million euros) and 250 million yuan.

The project is part of Bayer's plan to invest 110 million euros by 2012 to build five downstream facilities in China.

Power

Guodian to invest 20b yuan in energy projects

China Guodian Corp is planning to invest 20 billion yuan (2.2 billion euros) in the development of energy programs in Southwest China's Chongqing municipality over the next five years, the company said.

According to an agreement between China Guodian Corp and the Chongqing municipal government, the company will fund a variety of energy projects, including thermal power stations, wind power stations, natural gas power stations and biomass power stations in Chongqing and its surrounding regions.

"Chongqing's fast economic growth has brought great opportunities for the development of energy," said Zhu Yongpeng, general manager of China Guodian Corp, one of the country's largest State-owned power companies.

Zhu estimates that Chongqing's power consumption will grow at an annual average rate of 12.1 percent over the next five years.

In 2010, energy consumption in Chongqing totaled 62.5 billion kilowatt-hours.

China Daily-Agencies