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GE and Shanghai Guangdian agree on electric components JV
By Fu Chenghao |
February 26, 2009, Thursday
|
Print Edition
Print Edition
GENERAL Electric Co and Shanghai Guangdian Electric Group Co agreed yesterday to form a US$20-million joint venture for electric components - the United States conglomerate's first investment in China this year.
"Despite the economic downturn, GE's confidence in the China market stays unchanged,'' said Michael Petras, president and CEO of GE Lighting & Industrial. ''China is the market where GE will seek further expansion."
The venture could enhance GE's localization of its electrical distribution and control products in China, GE said.
The American firm has a 25 percent stake in the venture initially but has the right to increase the holding to 50 percent in the third year. The new company, in Fengxian District, targets annual sales of US$100 million.
The plant will produce electric components such as breakers for commercial, industrial and residential applications. Products will be distributed by GE's sales network throughout the Asia-Pacific.
Thanks to the government's 4-trillion-yuan (US$585 billion) economic stimulus package which includes heavy infrastructure spending, the electric equipment business has appeared to be less affected during the downturn in China where global giants such as ABB Ltd and Schneider Electric SA and a number of domestic players compete.
"The overall growth is actually accelerating for our company after the crisis, although we saw weaker orders from coal-fired power plant clients due to the sector's slower expansion," said Yan Huaizhong, chairman and CEO of Shanghai Guangdian, which produces various electric products used in power, petroleum and metallurgical sectors.
Shanghai Guangdian's sales are set to rise 35 percent to 7 billion yuan this year, after surging 18 percent in 2008, Yan said.
The new venture will start production by October this year.
"Despite the economic downturn, GE's confidence in the China market stays unchanged,'' said Michael Petras, president and CEO of GE Lighting & Industrial. ''China is the market where GE will seek further expansion."
The venture could enhance GE's localization of its electrical distribution and control products in China, GE said.
The American firm has a 25 percent stake in the venture initially but has the right to increase the holding to 50 percent in the third year. The new company, in Fengxian District, targets annual sales of US$100 million.
The plant will produce electric components such as breakers for commercial, industrial and residential applications. Products will be distributed by GE's sales network throughout the Asia-Pacific.
Thanks to the government's 4-trillion-yuan (US$585 billion) economic stimulus package which includes heavy infrastructure spending, the electric equipment business has appeared to be less affected during the downturn in China where global giants such as ABB Ltd and Schneider Electric SA and a number of domestic players compete.
"The overall growth is actually accelerating for our company after the crisis, although we saw weaker orders from coal-fired power plant clients due to the sector's slower expansion," said Yan Huaizhong, chairman and CEO of Shanghai Guangdian, which produces various electric products used in power, petroleum and metallurgical sectors.
Shanghai Guangdian's sales are set to rise 35 percent to 7 billion yuan this year, after surging 18 percent in 2008, Yan said.
The new venture will start production by October this year.
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