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)