(Yicai) Oct. 12 -- Chinese home appliance makers, including Midea Group, Xinbao Electrical Appliances Holdings, and Vanward New Electric, have hiked investments in member states of the Association of Southeast Asian Nations along the Belt and Road Initiative in recent years.

Xinbao, a small Foshan-based home appliance manufacturer, built its first overseas plant in Indonesia this year to produce electric vacuum cleaners. Sales of the plant will soar next year, according to its Chief Marketing Officer of Overseas Marketing Zhu Xiaomei.

Vanward is building its first overseas plant in Thailand, scheduled to become operational next year, to make and export ovens to Western countries, said Chairman Lu Yucong. The company will consider bringing its domestic suppliers to join it abroad and has organized visits to Thailand for firms on its supply chain, Lu added. 

Constructing overseas plants will meet VIP clients' higher demands and hike Foshan-based Vanward's business scale and profitability, President Lai Yuwen noted, adding that the firm has started developing its brands in Russia and South Asia.

Chinese home appliance firms have formed a clustering effect in ASEAN, Zhou Nan, secretary-general of the home appliances branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said to Yicai. These include the electric vacuum cleaner, handset, and color TV fields in Vietnam and the air conditioning and other refrigeration appliance sectors in Thailand, he noted.

Home appliance companies from China have been expanding development in ASEAN not only because of Western countries' trade barriers but also to move closer to the union's market, have a quicker response, lower costs, and better develop their brands, Zhou pointed out.

Midea has also increased investment in Thailand in recent years, and it held a ceremony at its air conditioner plant there after rolling out 1 million products off its production line yesterday. With an investment of over CNY1 billion (USD137 million), the factory became operational last November and has an annual output of 4 million products, selling goods mainly to North America, ASEAN, and the Middle East. In 2007, Midea set up its first overseas plant in Vietnam.

Also based in Foshan, Midea formed an ASEAN research and development center based on the air conditioner plant to develop energy-efficient products to address rising electricity charges and tight electricity supply in ASEAN countries, with 90 percent of its staff being from member states, such as Thailand, the Philippines, and Indonesia. 

Midea has four factories in Thailand producing refrigerators, washing machines, microwaves, and other home appliances and air conditioners.

Hiking investment in the ASEAN market will improve Midea's development and boost its ability to meet the market's unique demand, Wang Jianguo, vice president of Midea, president of its smart home business group, and president of Midea International Business, told Yicai today. It will also improve the response speed of the supply chain and marketing decision-making and meet demand of other markets besides the ASEAN, Wang added.

This year marks the 10th anniversary of the BRI, with China and ASEAN penning the Regional Comprehensive Economic Partnership, the world's biggest trade pact, making it a sure choice for Chinese electric household appliance firms to optimize their export markets by expanding to ASEAN and other BRI markets amid great pressure on export growth in Western countries, Zhou added.

Editor: Martin Kadiev