Haier integrates two companies to integrate production resources through channels

Haier Electric recently incorporated two small home appliance manufacturers located in Ningbo and Shunde, accelerating the integration of production resources through channels, and its three-and-four-tiered market is expanding its small home appliances business such as electric fans and hair dryers.

The two small home appliance companies are Ningbo Advanced Electric Manufacturing Co., Ltd. (hereinafter referred to as “Developed Electric Appliances”) and Guangdong Xiongfeng Electric Appliances Co., Ltd. (hereinafter referred to as “Hsiung Feng Electrical Appliances”). Developed electrical appliances mainly produce hair dryers, hair straighteners, hair curlers and other hair care appliances. Xiongfeng Electric mainly produces small household appliances such as electric fans, heaters and soya-bean milk makers. Their annual output of small household appliances has reached 10 million units.

Haier Electric does not directly acquire them, but establishes joint venture sales companies with its shareholders and controls these joint venture sales companies while signing exclusive supply agreements to integrate these high-quality production resources.

According to an announcement by Haier Electric on the evening of June 20, its wholly-owned subsidiary, Haier Electronics Sales (Hong Kong) Co., Ltd. (hereafter referred to as “Haier Hong Kong”), was in December last year and May of this year respectively The shareholders set up a joint venture sales company, which is owned by 51% of Haier Hong Kong Holdings and 49% by the original shareholders. The price of the two joint venture sales companies of Haier Hong Kong Holdings was 79.36 million Hong Kong dollars and 510,000 Hong Kong dollars respectively.

The joint venture company is run by the managers of the original shareholders. For example, Hushun Hong Kong and the male shares of the joint venture established shares of real-shun, the general manager of Xiongfeng Electric's major shareholder Hu Zhiheng, he has 20 years of experience in consumer products and home appliances industry.

On June 20 of this year, Haier Hong Kong signed contracts with the original shareholders of the two joint venture sales companies mentioned above and granted them options to sell shares. The date of this option is from July 1, 2012 to June 30, 2018. As long as the joint venture company achieves the agreed performance, the original shareholders may transfer part or all of the shares held by the joint venture company to Haier Hong Kong, and Haier Electronics may purchase these shares through a private placement to the original shareholders. The maximum purchase amount of the remaining shares of the above two joint ventures shall not exceed RMB 130 million and RMB 100 million, respectively.

As a price, Advanced Electric and Xiongfeng Electric respectively signed a contract with Haier Hong Kong to provide exclusive electric fan and hair dryer and other small household electrical appliances to the corresponding joint venture sales company. The exclusive supply agreement is renewed every four years.

Since the beginning of last year, the integrated channel business such as Japan-Japan Shunshun Electric Appliance Chain Co., Ltd. has replaced washing machines and water heaters, making Haier Electric the largest source of income. Haier Electric stated that integrated channel service is its main growth point in the future. In order to enrich the procurement of brands and expand the distribution system, Haier Electronics has cooperated with several small home appliance suppliers to introduce more products into the domestic three or four-tier market for distribution. Haier's export business growth.

We will further develop the distribution network of small home appliances in the domestic market in the 3rd and 4th level and overseas markets. Haier Electric is responsible for receiving customer sales orders, providing business planning to customers, marketing and promotion activities, and the original shareholders are responsible for manufacturing low-cost, high-quality products.

In 2011, Haier Electronics has successfully cooperated with two small home appliances companies through this cooperation model. The sales of the joint venture sales companies Senhai International and Haihong Investment have reached HK$389 million and HK$202 million, respectively.

An insider close to Sunshun Electric revealed to “First Financial Daily” that the daily Sunshun electrical appliance chain sales of non-Haier brand appliance business this year, compared to the same period last year to achieve sales doubled.