Toshiba to tie up with Midea on refrigerator parts

Toshiba Corp plans to tie up with GD Midea Electric Appliances Co, a leading Chinese household electronics supplier, to make refrigerator parts to capitalize on growing demand in China, a Japanese newspaper reported.

Under the terms of agreement, the two will form a venture to produce compressors for refrigerators. GD Midea will hold a controlling stake of 95% in the Anhui Province-located new entity. A factory is to be built by the venture with an investment of RMB 490 million (US$69 million) which is scheduled to start production by October, the report said.

The venture which is expected to have an annual capacity of 5 million compressors by 2010, will contribute 60% of its output to GD Midea and the residual will be for Chinese plants owned by Japanese home-electronics makers, including Toshiba, according to the report.

Currently, China's refrigerator-compressor market stands at about 30 million units. The venture, to be capitalized at RMB 325 million, targets 10% market share in China’s refrigerator market.