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PRESS RELEASE
December 20, 2005
Fujitsu General Limited
(NO.05-V03-21)
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New company for air conditioner sales established in Shanghai, China |
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On December 19, our company signed a joint venture agreement in Shanghai with Orient International (Holding) Co., Ltd. Group to establish a new company for the sales and service of air conditioners in China. The new company will be officially established in April, 2006, starting the business at the same time.
The new company is named Fujitsu General Orient Electric (Shanghai) Co., Ltd. with capital of US$2.5 million (about 300 million yen), 85% invested by Fujitsu General and 15% by Orient International Group, and having its head office in Shanghai, China, will sell and conduct after-sale service of home-use air conditioners for the Chinese market.
Orient International (Holding) Co., Ltd. is one of leading state-owned general trading companies in China and, through its subsidiary Orient International Holding Shanghai Rongheng Electric Appliances Co., Ltd. (hereinafter "Shanghai Rongheng Electric Appliances") which is working as a sole agent for our company, has been building up the cooperative relationship with our company for the sales of home use air conditioners in Huadong area (Jiangsu, Zhejiang) centered on Shanghai since 1998. In recent years, however, in order to cope with the intensifying competition of air conditioner market and the change of distribution patter such as the expansion of mass merchandisers, the change to the sales setup linked more closely with the market has become the essential theme.
The establishment of the joint venture this time is aimed to integrate the sales and service departments of Shanghai Rongheng Electric Appliances and our local subsidiary Fujitsu General (Shanghai) Co., Ltd. and cope with the market needs speedily by utilizing the management resources of both companies and linking the development/production with the sales/service activities more closely through quick grasp of the market requirements as well as streamlining the distribution channel.
We established an air conditioner factory (Fujitsu General (Shanghai) Co., Ltd.) of our own capital in Jiading Zone, Shanghai in 1994 and are supplying air conditioners inside and outside China. We further signed a joint venture agreement with Wuxi Little Swan Central Air Conditioner Co., Ltd. in November, 2005 to establish a new company for the business of multi air conditioning system for buildings starting operation from June 1, 2006.
By the establishment of the new company, we have built up the setup to produce and sell wide range of air conditioners from small type to large package type and multi system for buildings.
Photo : Main air conditioners to be sold by FGOE
Left : Floor-standing type,
Right top : High-grade inverter type,
Right bottom : Normal inverter type
Outline of new company
- (1) Company name :
- Fujitsu General Orient Electric (Shanghai) Co., Ltd. (Abbreviated : "FGOE")
- (2) Head office location :
- Pudong, Shanghai, P.R. China
- (3) Chairman :
- Hisaki Hirosaki (Director, Fujitsu General)
- President :
- Sadao Komoto (Vice Chairman, Fujitsu General (Shanghai) Co., Ltd.)
- (4) Line of business :
- Sales and service of air conditioners in China
- (5) Establishment :
- April, 2006 (scheduled)
- (6) Capital :
- US$2.5 million (approx. 300 million yen)
- (7) Settlement term :
- December 31
- (8) Investment ratio :
- Fujitsu General Limited 85%,
Orient International Holding Shanghai Rongheng International Trading Co. Ltd. 15% - (9) Sales plan :
- 150,000 sets (3 years later) (About 5.5 billion yen)
Background of new company establishment
China is one of the biggest markets for air conditioners in the world with the expected demand of 13 million sets a year, and further expansion is expected with increased housing construction starts as the personal income increases.
In recent years, on the other hand, the market environment is dramatically changing as the air conditioner manufacturers in China, which were said to be more than 400 companies in total, have drastically diminishing in number for the past several years and the distribution pattern is changing with the trend of the oligopoly of the market by mass merchandisers expanding their sales networks all over the country. Furthermore, from the viewpoint of product and technology, the demand for high value-added models such as inverter type air conditioner has rapidly increased due to the government promotion of energy-saving policy with keyword of "Environment" and "Energy-saving".
Under such circumstances, the new company aims to cope with the needs of the market by the close cooperation between manufacturing and sales departments as well as strengthen and expand its sales activity particularly focusing Huadong area (Shanghai, Jiangsu, Zhejiang) which accounts for about 30% of the air conditioner market of China and also has strong demand for high value-added models.
(Reference) Relations with Orient International Group
| Company name |  Orient International (Holding) Co., Ltd. |
 Orient International Holding Shanghai Rongheng Electric Appliances Co. Ltd. |
 Fujitsu General Orient Electric (Shanghai) Co., Ltd. |
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| Establishment | November, 1994 | April, 1998 | April, 2006 (Scheduled) |
| Representative | Chairman Cai | Chairman Gao | Chairman Horosaki |
| Location | Suite A, Orient International Plaza, 85 Loushanguan Road, Shanghai | 15F, 166, Lujiazui East Road, Pudong, Shanghai | Pudong, Shanghai |
| Line of business | General trading company | Sales of air conditioners | Sales and service of air conditioners |
| Capital | 800 million yuan | 10 million yuan | US$2.5 million |
| Employees | 7,500 | 40 | 50 |
Contact details
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