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| Turnaround Forecast for China's TCL After Restructuring |
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TCL, one of China's major television and mobile phone makers, is expected to turnaround its ailing European operations with a major restructuring ending this month. TCL president Li Dongsheng said the corporation should recover losses incurred in the European market, and strengthen its position in the Chinese market. "As the new operation framework and procedures have been established, our European business will grow in a smooth and healthy way," Li told the International Business Groups Annual Conference 2007 in Beijing. TCL acquired the television and mobile phone businesses of France's Thomson and Alcatel in 2004. However, the deals put a heavy financial burden on TCL. TCL posted losses of almost 220 million Euros in the European market in 2006. In response, TTE Europe, a joint venture between TCL and Thomson, filed for insolvency in France last week, and TCL laid off more than 300 employees in Europe and moved the operation center to Hong Kong earlier this year. Zhang Xiaoga, senior analyst with Orient Securities, said TCL Multimedia was likely to turn a profit with the termination of TCL's loss-making television business in Europe. Wang Hongbo, TCL's board secretary, said the company would not give up the European television market and would find a new model to run the business in Europe. TCL multimedia is also vying for a bigger share of China's market, aiming to gain 11 percent of the flat panel TV market in 2007, compared with 9.6 percent in 2006 and 3 percent in 2005. TCL is also expanding the domestic LCD TV market. TCL ranked first in the domestic television market with profits of more than 503 million yuan (US$65.78) in 2006. Li also said TCL Communication Technology realized its whole year profit goal with earnings of 1.09 million yuan in 2006, mainly driven by rapid growth of mobile phone sales overseas. The company lost 1.6 billion yuan in 2005. TCL was aiming to become the biggest mobile phone company in three years. (Xinhua News Agency June 3, 2007) |
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