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Epcos expands in China with new JV

Posted: 12 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:China market? joint venture? power capacitor?

Epcos and China-based Anhui Feida Industry Stock Co. Ltd have partnered to launch a joint venture company named Epcos (Anhui) Feida Electronics Co. Ltd (Epcos Feida).

The joint venture will develop and manufacture power capacitors for alternating current (AC) applications. Its products will thus be used especially in household appliances such as washing machines, dryers and refrigerators and industrial machinery such as air-conditioning systems and pumps. In all these applications, power capacitors are needed to start and operate electric motors.

Around 1,300 employees will be transferred from Anhui Feida to the joint venture. Over the next three years, Epcos Feida aims to generate sales totaling about $128 million.

With its capital investment Epcos owns 60 percent of the shares in the joint venture. Anhui Feida, one of China's leading makers of power capacitors for AC applications, is incorporating all of its business activities involving these products as a non-cash contribution. This contribution includes both a modern production facility and the associated local sales network.

Epcos Feida will be headquartered in Ningguo City, where its manufacturing operations will also be based. Ningguo City has a population of around 400,000 and is about 300km west of Shanghai.

Tapping new markets
An increasing share of the global demand for household electronics is being serviced by products made in Asia in general and China in particular. The new joint venture will strengthen Epcos' presence in precisely these growing markets. Epcos Feida thus gives Epcos the chance to broaden its customer base and tap new AC applications for power capacitors from a low-cost manufacturing base.

Moreover, the JV will strengthen Epcos' position in Asia's growing market for power generation and distribution. The joint venture creates conditions that will enable Epcos to supply both local and locally based international customers with power capacitors faster and at lower cost than in the past.

Subject to approval by the relevant authorities, Epcos Feida should open for business at the start of 2009

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