Haier, Sampo strategic alliance sets market alight
( 2002-02-21 09:50 ) (1 )

The largest home appliance makers of the mainland and Taiwan announced on Wednesday a strategic alliance to boost their competitiveness following their respective entries to the World Trade Organization.

Under the agreement signed on Wednesday, mainland-based Haier Group and Taiwan's Sampo Corp will sell each other's products in markets at home and abroad.

These include home appliances and information technology and telecommunication products.

The deal also involves co-operation in the way of OEM (original equipment manufacturing), parts purchasing from each other, and a future strategic alliance and investment co-operation between the two companies.

They may jointly take over overseas companies when opportunities arise, which would help reduce risks during expansion, said HC Ho, president and chief executive officer of Sampo.

The two companies expect the alliance to boost their global competitiveness, Ho said. Competition from foreign players on the mainland and in Taiwan is expected to intensify following WTO accession.

Haier is interested in selling Sampo's products such as the LCD TV, DVD loader and LCD monitor. Sampo will sell Haier's products such as TV sets, refrigerators, washing machines and air-conditioners, said a statement by the two companies.

The two companies would sell complementary models and products to avoid competition between them, Ho said.

They would be able to reduce costs in research and development through such cross-selling, he said.

The companies would also share their manufacturing resources in way of OEM, Ho said. Haier has seven industrial complexes on the mainland while Sampo has four factories on the mainland.