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Gree and Daikin to set up joint ventures

GREE Electric Appliances Inc and Japan's Daikin Industries Ltd signed an agreement yesterday to invest 910 million yuan (US$133 million) in two joint ventures to develop advanced inverter-type air conditioners in China.

China's largest maker of home air conditioners and the world's second-biggest maker of air conditioners plan to form two ventures in Zhuhai, Guangdong Province, where Gree is based, for the production of key components and molds.

"The establishment of these new companies should improve cost competitiveness and enable a broader range of users for inverter air conditioners," Daikin said in a statement on its Website yesterday.

Osaka-based Daikin said the two companies targeted expansion of the inverter market, even in places where market penetration for the technology is low.

Establishment of the two new companies is planned for the middle of next month. Gree will own 51 percent of the ventures while Daikin will hold the balance.

Zhuhai Gree Daikin Device Co has a registered capital of US$74.83 million with 1,500 employees and Zhuhai Gree Daikin Precision Mold Co US$57.96 million with a staff of 450.

Daikin has also commissioned Gree to manufacture 500,000 small-sized inverter air conditioners for the Japanese market.

The two companies agreed on several areas of collaboration including joint raw material and air-conditioner parts purchasing along with cooperation in capital and technology advancement.

Shares of Gree were suspended from trading on the Shenzhen Stock Exchange yesterday pending the announcement. Trading was scheduled to resume today.


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