TCL Corp, one of China's leading consumer-electronics makers, plans to invest nearly 300 million yuan (US$36 million) to build a second air-conditioner manufacturing base in Wuhan, capital of Central China's Hubei Province.

The company started construction of its Wuhan production base on Wednesday.

The production site, with a designed annual capacity of 3 million sets, is expected to be put into operation in February next year, said Li Dongsheng, chairman and CEO of TCL Corp.

The company's total production capacity of air-conditioners will reach 5 million sets, from its Wuhan base and its first production site in Zhongshan, in South China's Guangdong Province.

"We aim to grow into the top three brands in the domestic air-conditioner market, with an annual output of 8 million sets in three to five years," Li said.

He added that his company has set air-conditioners as a pillar product for future development.

Entering the air-conditioner sector four years ago, TCL is a second-tier producer, much smaller than its rivals such as Haier, Gree and Media. It is a leading brand in colour TV, telephone and mobile phone sectors.

"We will accelerate our development in the sector from now on, expanding businesses through investment and acquisitions," said Hu Lixian, general manager for TCL's air-conditioner business.

Hu said that the company is negotiating with an Italian air-conditioner maker to jointly invest in a production site in Zhongshan, which will mainly serve the export market as well as the southern and eastern Chinese market.

Co-operation details will be revealed later this month, Hu said.

The company has sold 900,000 sets of air-conditioners domestically and exported 600,000 sets this year, a year-on-year growth of 160 per cent. It aims to have total sales of 3 million sets next year.

Earlier, big air-conditioner makers Media and Gree also announced sales goals for 2005.

Industry analysts say there is a worry that production expansion will enlarge the gap between market supply and demand.

Source: China Daily