Heifei, Anhui – Whirlpool China is planning to take a 51% stake in Hefei Rongshida Sanyo Electric (HRSE) in a RMB2bn ($326m) deal that will include investment in a 4m unit/year expansion at HRSE, said.
The financing plan was approved by China’s Ministry of Commerce in January 2014 but still awaits permission by China Securities Regulatory Commission, said HRSE.
The new fridge plant will be set up in Hefei, Anhui province. The project is expected to cost around RMB600m and take 24 months to complete.
HRSE, with a previous focus on washing machines, has been manufacturing refrigerators since February 2012 and currently has a 3mn unit/year fridge capacity. In 2012 the company sold 154,000 refrigerators, bringing in RMB237,000 or 6% of its total revenue.
According to forecast by China Market Monitor, a research firm specializing in home appliances, Chinese sales of refrigerators will drop 2% to 33mn units in 2014. The markets for three-door, multi-door and side-by-side combination fridges is expected to grow, China Market Monitor said. It added that sales volume of multi-door fridges is estimated to soar 56% to 1m units in 2014.
XE currency conversion: 27 January