Under a deal signed yesterday, the two firms agree to locate the joint venture in Hangzhou, capital of East China's Zhejiang Province.

A spokeswoman for Ericsson told China Daily the initial investment in the planned partnership amounts to 100 million yuan (US$12 million).

She would not say when and how much additional investment will be injected into the joint venture.

Ericsson will hold a 60 per cent stake in the venture, with Lorom taking the remainder.

The joint venture, called Ericsson Lorom Technology (Hangzhou) Company Limited, will focus on research and development (R&D), manufacturing and sales of telecoms network products and fibre optic solutions for both China and global markets.

It will also provide products and solutions to support a variety of telecoms applications, including broadband access and third generation (3G) mobile telecoms networks.

Ericsson and Lorom expect to launch the venture next month and unveil commercial products in the third quarter of this year.

Lorom has been the cable and cable assemblies original equipment manufacturer supplying Ericsson for a long time, the spokeswoman said.

Lorom was among the first Taiwanese companies to be attracted to the mainland. Currently the firm has manufacturing facilities in Hangzhou and Shenzhen, employing about 5,500 people.

Setting up a joint venture in Zhejiang Province will help fuel Ericsson's expansion in the Yangtze River Delta, Ericsson's spokeswoman said.

Ericsson has a manufacturing facility in Nanjing, capital of East China's Jiangsu Province and an R&D facility in Shanghai.

Ericsson late last year started producing 3G base stations in Nanjing for exports.

"China has been witnessing world-leading telecoms growth for the past few years, and Zhejiang Province is among the most economically developed and fastest growing markets in the country," Mats H Olsson, President of Ericsson China region, said.

(China Daily April 19, 2005)