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Tokyo, Japan, August 23, 2001 -- Hitachi, Ltd. (TSE: 6501)
today announced that this month it will establish a room air-conditioner
production company in the city of Wuhu in Anhui, China. The new company,
which is called Hitachi Household Appliances (Wuhu) Co., Ltd. and
is scheduled to start production in November 2002, will strengthen
Hitachi's cost-competitiveness with low-priced, volume-zone models
in the China and Japan markets.
The new company is being established as a future global manufacturing
base, and will be set up as a wholly owned Hitachi subsidiary, with
Hitachi, Ltd. putting up 90% of the capital and Hitachi (China), Ltd.
10%.
In fiscal 2000, demand for air-conditioners in the China market was
estimated at 8.5 million units. Looking ahead, Hitachi expects the
market to grow annually at a double-digit pace. Shanghai Hitachi Household
Appliances Co., Ltd. (SHHA) already produces and sells 0.4 million
units a year. When the new company comes on line, combined annual
production capacity will rise to 0.7 million units, and will be used
to meet increasing demand and to expand Hitachi's market share. Moreover,
Wuhu has lower labor costs than Shanghai, and locating the new company
in the Anhui province makes Hitachi eligible for incentives related
to developing the Midwestern region, making it possible to further
reduce costs. The new company will produce lower-priced models for
the mass-market, while SHHA will focus on producing higher-end models
such as inverter types and package types.
To lower prices of mass-market models in the Japanese market, the
new company will also export to Japan, helping to ensure Hitachi's
price-competitiveness in the Japan market.
As part of its policy to expand its consumer products business, Hitachi
is planning to strengthen overseas operations. In fiscal 2000, overseas
operations accounted for 26% of the business of the Consumer Products
Group. Hitachi plans to increase this figure to 40% by fiscal 2004.
The new company was established to achieve this goal by increasing
Hitachi's share of the growing Chinese market, and to act as a global
production base.
About new company
| Company Name |
: |
Hitachi Household Appliances (Wuhu)
Co., Ltd. |
| President |
: |
Jiro Yoshii |
| Location |
: |
Wuhu Economic & Technological Development
Zone, Wuhu, Anhui Province, China |
| Date of establishment |
: |
August 2001 |
| Capital |
: |
US$21 million |
| Equity ratio |
: |
Hitachi, Ltd.: 90%, Hitachi (China):
10% |
| Business |
: |
Manufacture of room air-conditioners |
| Production capacity |
: |
300,000 units/year |
About SHHA
| Company Name |
: |
Shanghai Hitachi Household Appliances
Co., Ltd. |
| President |
: |
Masayoshi Kojima |
| Location |
: |
Shanghai, China |
| Date of establishment |
: |
April 1994 |
| Capital |
: |
US$30,670,000 |
| Equity ratio |
: |
Hitachi, Ltd.: 55%, Shanghai Electrical
Apparatus Co.,Ltd. 40%, Hitachi affiliates 5% |
| Business |
: |
Manufacture and sale of air-conditioners |
| Production capacity |
: |
400,000 air-conditioners/year |
About Hitachi (China)
| Company Name |
: |
Hitachi (China), Ltd. |
| President |
: |
Masao Hisada |
| Location |
: |
Beijing, China |
| Date of establishment |
: |
October 1994 |
| Capital |
: |
US$65,400,000 |
| Equity ratio |
: |
Hitachi, Ltd.: 100% |
| Business |
: |
Strategic business planning and information-gathering
in China |
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About Hitachi, Ltd.:
Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's
leading global electronics companies, with fiscal 2000 (ended March
31, 2001) consolidated sales of 8,417 billion yen ($67.9 billion*).
The company manufactures and markets a wide range of products, including
computers, semiconductors, consumer products and power and industrial
equipment. For more information on Hitachi, Ltd., please visit Hitachi's
Web site at http://global.hitachi.com.
*At an exchange rate of 124 yen to the dollar. |
