Candy Group Acquires Majority of JinLing Electrical
Jul 5, 2006
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European appliance maker Candy Group signed an agreement with Jiangmen Washing Machine Factory on the acquisition of 75 percent of Jinling Electrical Co. Ltd.
Under the agreement, Candy will manufacture washing machines in Jinling's factory and produce both Jingling and Candy brand washing machines in China.
Jinling is based in Jiangmen, Guangdong Province, China, and is reportedly the third ranking brand in the Chinese market with 800,000 units sold in 2005.
The Brugherio, Italy based Candy said the Jinling acquisition follows the opening of the updated Vesta/Vyatka washing machine plant in Kirov, Russia. Candy now has manufacturing sites in China, the largest world market (17 million washing machines sold in 2005), and Russia, which is poised to be soon the largest household appliance market in Europe. Including Jinling, Candy's overall manufacturing output nears 7 million units.
Candy initially invested 31 million euros (approx. U.S. $39.4 million) and will continue to invest 10 million euros (approx. $12.7 million) a year for the next several years. Under the agreement, subject to approval by the Chinese government, Candy acquired 50 percent of Jinling Electrical Co. from the Hong-Kong listed Metro-Global Ltd., and 25 percent from Jinling Group, owned by the Jiangmen Municipality, which kept the remaining 25 percent of the issued capital. Candy acquired full ownership of the brand and export rights outside China.
Mr. Aldo Fumagalli, chairman Candy Group, said: “We added a new industrial capacity in the washing machine sector, without altering our manufacturing operations in Europe, which remains our largest market. On the contrary, we will bring our front- and top-loading washing machine technology to China, where it still has a minor market share, yet it is poised to grow."
Jinling Electrical Co. was established 1978 to manufacture automatic washing machine for the Chinese market. It has a staff of 1,800, including 1,000 sales representatives.
Mr. Silvano Fumagalli, CEO Candy Group, presented technologies, R&D and manufacturing capabilities of Jinling Electrical Co.: "China-made washing machines are mainly of the automatic, vertical axle type, like those manufactured in Japan and U.S. They count for 64 percent of the domestic market. The second most widely used type are the two-tub machines with vertical axle: 22 percent. 'European' style washing machines (i.e., front- and top-loading, horizontal axle) account for 14 percent of the market. They are not produced by Jinling, which focuses on the two former platforms, with load capacities ranging from 4 kg to 8 kg."
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