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News Desk

The Yomiuri Shimbun

Publication Date : 08-02-2013

China's Haier Group, the world's largest appliance manufacturer, plans to open a new research and development center for refrigerators in Kumagaya, Saitama Prefecture.

It will be Haier's largest R&D centre outside China and will start operating in 2014. Haier opened a large R&D centre for washing machines in Kyoto in April 2012.

With the new centre, in which Haier will invest tens of billions of yen, the company aims to make Japan its R&D base. The manufacturer plans to increase its number of engineers employed in Japan from 180 to 300.

A Haier executive said the company wants to make Japan its R&D base because "Japan's technological capabilities are high and products that meet Japanese consumers' demands can be popular worldwide".

While developing high-quality products and technologies in Japan, Haier will manufacture them in other Asian emerging countries, where costs are lower, then export the products around the world.

Haier was established in 1984 in Qingdao, China. It has boasted the largest global sales for four years straight. In January 2012, it purchased Sanyo Electric Co.'s appliance business from Panasonic Corp.

Haier employs more than 80,000 people in more than 100 countries and territories. As of December 2011, its group sales were 150.9 billion yuan (about 2.27 trillion yen).

The company's plan to make Japan its R&D base is aimed at fully exploiting Sanyo Electric technologies to give it an edge against competitors in the global market.

As Japanese companies employ technologies that could do well but have not been fully realised, more firms in other Asian countries seeking to expand business overseas are expected to make merger and acquisition deals with Japanese firms.

Haier's appliance sales in Japan in 2012 increased 4.5-fold from last year to 48.3 billion yen, thanks to improved brand recognition after it bought Sanyo Electric.

The company is aiming at sales of 80 billion yen in 2015, up 65 per cent.

Haier Vice President Du Jingguo said the company's primary goal is to "become the world's leader in appliances" by utilising the advanced technology of Sanyo Electric, which developed the world's first dual-tub washing machine.

To this end, Haier will establish the R&D center in Saitama Prefecture and secure talented engineers from universities and companies in the Tokyo metropolitan area.

Economists predict Haier will expand its research and development to other types of appliances, such as air conditioners.

Other Asian companies also have been making moves to exploit Japanese companies' technological capabilities.

Singapore's Withelam Group has proposed a takeover bid to Nippon Paint Co., aiming to compete with European and US companies by combining its sales network with the paint company's technology.

In the bid proposal document, Withelam said Nippon Paint's technological capabilities are the highest in the world and that if the company restructured its corporate culture, it could reach the summit of the global paint and coating materials market.

Sharp Corp.'s factory in Sakai for manufacturing large liquid-crystal display panels had become a burden for the company amid an accumulation of inventory due to sluggish sales.

However, after the plant was placed under joint management with Taiwan's Hon Hai Precision Industry Co., the plant's operational rate significantly improved.

The improvement was largely a result of Hon Hai's sales connections with such companies as Sony Corp. and US television maker VIZIO Inc.

According to RECOF Corp., a merger and acquisition advisory firm, there were eight mergers or takeovers of Japanese companies by other Asian companies in January, up from two in January last year.

With the recent weakening of the yen, some economic observers expect a rise in the number of merger and acquisition deals targeting Japanese firms.

An industry source said, "Japanese companies benefit from tie-ups with other Asian companies, which can bring excellent production capabilities, as well as strengths in fund procurement and marketing."