Toshiba Corporation has announced that the company has turned the joint venture it ran with top Chinese electronics maker TCL into a wholly owned subsidiary by acquiring the remaining 10% stake of the joint venture for JPY200 million.
This means that the Japanese electronics giant, which returned to the Chinese market with the help of TCL, will be operating independently in this marketplace.
At the beginning of 2005, Toshiba and TCL jointly announced the establishment of their household appliance joint venture, Toshiba HA Manufacturing (Nanhai) Co., in Nanhai, Guangdong Province. With a total investment of USD50 million, the joint venture focuses on the production and sales of high-end refrigerators and washing machines of the two companies. Some of the Toshiba products produced there were sold to Japan and Europe. Starting production from July 2006, the joint venture is capable of producing about 700,000 refrigerators and 300,000 washing machines each year. By 2010, the annual production capacity is expected to reach 1 million refrigerators and 1.5 million washing machines.
As Toshiba's biggest production base outside Japan at that time, the joint venture was initially 70% owned by Toshiba and 30% owned by TCL. Then TCL reduced its ownership to 10%. With the new acquisition, the joint venture will become a wholly owned subsidiary of Toshiba. With this move, Toshiba aims to create a more speedy management structure at Toshiba HA Manufacturing (Nanhai) Co., so that the unit can respond to a changing market environment.
Apart from Toshiba HA Manufacturing (Nanhai) Co., Toshiba and TCL have another joint venture, which is a sales company, and the company is 51% owned by TCL and 49% owned by Toshiba.