Consumer electric and home appliances company Haier Group announced on Monday in Jakarta that it was launching its operations in Indonesia as part of its takeover of Japan Sanyo Electric Co. Ltd.
China-based Haier took over Sanyo’s entire white goods products business division last March in an acquisition reportedly valued at US$130 million, according to Reuters.
The acquisition included refrigerators, washing machines and other appliances in Indonesia, Japan, Malaysia, the Philippines and Vietnam.
The acquisition, which started in March 2011, would help boost Haier’s sales in Asia, including in Indonesia, according to Haier’s Asia Pacific marketing director Shi Zhiyuan.
However, he insisted Sanyo’s technology and markets were the main factors behind the acquisition.
“The Indonesian market has been positive. White good products grow about 15 percent every year in Indonesia. In 2011, Sanyo Indonesia’s total revenue reached $100 million. We are certain sales will continue to grow in the upcoming years,” he said, declining to provide this year’s sales target.
Haier’s 2011 global revenue totaled $23.3 billion, up 12.56 percent from the previous year.
In Indonesia, Haier took over PT Sanyo Indonesia and PT Sanyo Sales Indonesia. Both became Haier Electrical Appliances Indonesia and Haier Sales Indonesia, respectively.
“Considering how Sanyo is known in Indonesia, we will use both Haier and Sanyo brands here. The Haier brand targets middle and high-level customers, while the Sanyo products are for entry level customers,” Haier Indonesia president director Yutaka Itamochi said.
Itamochi said eventually, the brand Sanyo would be entirely replaced by Haier. He did not specify when.
The high-end Haier products included French door series refrigerators, front load direct drive series washing machines and three-dimension LED televisions with Android operating systems, Haier Sales Indonesia general manager of product marketing and sales division Fajar Surya said.
The high-end products are manufactured at Haier’s China and Thailand factories.
Haier Indonesia will maintain sales of existing refrigerators and washing machines under the Sanyo brand, produced at its Cikarang factory. Every year, the factory produces 600,000 refrigerators and 150,000 washing machines.
At the moment, Haier Indonesia employs 1,107 employees in two factories and 13 sales offices all over the country. The figures have included those from Sanyo’s operation.
Haier aimed at becoming the number three white goods manufacturer in ASEAN in 2016, Itamochi said. In the next five years, he added, Asia Pacific sales were expected to contribute 50 percent of total global sales.
Last May, the Electronic Producers Association (Gabel) recorded that the sales of electronics in the first quarter this year outperformed the industry’s target with a total value of Rp 6.71 trillion ($731.39 million), or up by 24 percent compared to the same period last year.
Sales of washing machines surged by 32.6 percent to Rp 768.7 billion, while sales of air conditioners and refrigerators rose by 33.3 percent to Rp 915.8 billion and 19.1 percent to Rp 1.31 trillion, according to Gabel data.
Another association, the Electronic Marketers Club (EMC), recorded a 22-percent increase in electronic sales to Rp 6.7 trillion in the first quarter of this year from the same period last year.
Commenting on the acquisition, Indonesian Institute of Sciences (LIPI) economist Latif Adam said it seemed Japanese firms had decided to go to another level by allowing foreign acquisitions to take place.
“Lately, the Japanese firms consider the home appliances sector as a mature one. It means that the sector’s profit level has almost reached the maximum and it’s time for these companies to expand to other high technology sectors,” he said.
On the other hand, Latif added, growing the home appliances business was a new industry phase for the Chinese companies.
“I hope the company will also consider manufacturing their high-end products in this country, instead of just importing them from overseas,” he said. (tas)