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- Sichuan News
Date: 2-Jan-2007 Sources: (Shenzhen Daily)
SICHUAN Changhong Electric Co., China's second-biggest television maker, said Friday it plans to form a US$225 million venture with MatlinPatterson Global Opportunities Partners LP to tap rising demand for flat-panel TVs.
Changhong will invest US$90 million for 40 percent of the company and its parent, Sichuan Changhong Electrical Group Co., will invest US$95 million for 42.2 percent, the Shanghai-listed company said.
MatlinPatterson, a private equipment fund that manages US$3.8 billion, will invest US$40 million for a 17.8 percent stake, it said. The venture will make plasma displays panels and other TV components.
Changhong's venture with MatlinPatterson may help the Mianyang, southwestern China-based company win a bigger share of the domestic market where sales of plasma display TVs may triple in the five years to 2010, according to El Segundo, California- based research company ISuppli Corp.
Plasma flat-panel TVs are less expensive to make than liquid crystal display TVs, said Wang Jinyan, an analyst with Industrial Securities Co.
'This is a good move for Changhong because they don't have the resources to invest in LCD panel production,'' Wang said. 'There's also less competition in the plasma TV market in China.''
Chinese consumers may buy 2 million plasma TVs in 2010, compared with 546,000 sets last year, ISuppli said last month. Sales of LCD TVs may increase to 20 million sets by 2010 from 4 million units this year, the researcher said.
Changhong Group bought Orion PDP Co., a South Korean maker of plasma display panels, for US$99.9 million earlier this month.
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