TTE Corporation's new management team poses for the media in Shenzhen yesterday. The world's biggest TV manufacturer said it will achieve profitability in the next 18 months in the North American and European markets.

The leading TV manufacturers in China and France announced Wednesday in Shenzhen that their joint venture, the largest TV company in the world, has gone into official operation.

The TCL-Thompson Electroincs (TTE), jointly funded by China's TCL Group and French Thomson company with assets of 430 million euros (518 million U.S. dollars), will produce TV sets under the well-known brands TCL, THOMSON and RCA in Shenzhen, south China's Guangdong province.

TCL International Holdings and Thomson hold 67 percent and 33 percent, respectively, of the new joint venture, according to the agreement signed on Jan. 28 in Paris, said TTE CEO Zhao Zhongyao.

The new company will have more than 20,000 sales terminals around the world and plans to sell 20 million color TV sets in 2004, Zhao said.

TTE has 29,000 employees, including 1,100 specializing in research and development. It plans to see profit in the markets of North America and EU within 18 months, he said.

TCL and Thomson together sold 18.5 million color TV sets in 2003, more than any other single company in the world.

At the opening ceremony of TTE, Tomson Li, chairman of TCL and TTE, said: "We want to be the undisputed leader of the industry."

Li said this was a significant decision in TCL's globalization strategy, indicating that Chinese companies are going global after 20 years of growth and efforts, and are capable of competing in mainstream industries at an international level.

Thomson's RCA and Thomson brands, which enjoy a 11 and 8 percent market share in North America and Europe, will enable TCL to penetrate Western markets without building new production capabilities and brands.

Charles Zhao said the new venture is expected to produce 20 million TV sets and generate a revenue of US$4 billion this year. It aims to increase its market share in North America and Europe and reach a global sales volume of 30 million units in the next two to three years.

Thomson's TV and DVD business was reported to have lost 120 million euros last year, while TCL's TV unit gained a profit of 530 million yuan (US$64 million) domestically and 81 million yuan (US$8.78 million) overseas.

TTE wants to turn its North American and European sectors into profitability in the next 18 months.

Although TTE executives admit that this goal will not be easy to achieve, they said they believed the synergy of the merger will benefit the company in the long term.

"Through scale economy, cost control, shared R&D capacities, lowered sourcing cost, our management team has full confidence," said Zhao.

What's more, manufacturing bases in Europe and Latin America will help TCL to break anti-dumping barriers set by many countries on Chinese products, Li said.

Globalization and the coming of the digital era provide great opportunities for the Chinese companies to grow faster than ever, as well as to co-operate with multinationals worldwide.

TCL group aims to join the world's 500 biggest companies by 2010 with an annual revenue of 150 billion yuan (US$18.1 billion).