| French home appliance maker to acquire Chinese firm |
PARIS, Aug 16 -- French home appliance maker SEB, which has announced its closure of three factories in France, will take over China's Zhejiang Supor Cookware, a Shenzhen-listed business company specializing in pressure cookers, woks and other kitchenware.
The French group, which owns the international brands Tefal, Moulinex and Rowenta, announced Wednesday that it would pay about 240 million euros (307 million dollars) to acquire a 51-59 percents take in its Chinese rival as part of its expansion.
The acquisition of shares in Supor is to be financed by debt, SEB said. It hopes for "a development acceleration in the Chinese market" and a "strong increase in the emerging markets, especially in Southeast Asia".
SEB group which employs more than 7,000 personnel in France recently announced its wiping of 890 jobs, and by moving into China it also hopes to reduce its production costs.
"We can't manufacture everything in France, in particular the entry level products which suffer from strong competition in Asia," said SEB's chairman Thierry de la Tour d'Artaise.
The purchase will allow the group to reinforce its position in the promising Chinese market and improve its profit margin thanks to lower costs, according to some analysts.
SEB's three factories in France, located in Vosges (east), Sarthe (northwest), and Jura (east), are to be closed within two years and the factory of Haute-Normandie (north) will cut its staff number from 245 to 185.
SEB, whose sales dropped 5.3 percent in France and 2.6 percent in other European Union (EU) countries in 2005, counts on outlets in the emerging markets with its pressure cookers, fryers, ovens, food processors and other toasters.
Last year, it registered a 21.4-percent fall in profit due to its restructuring and sales slowdown in Europe.
In July, SEB posted an 11.8-percent rise in sales in the first half of 2006, but reported problems in the French market, where its margins were under pressure.
Founded in 1994 in China's southeast Zhejiang province, Zhejiang Supor has two factories employing a total of 5,000 staff.
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