Hisense, a Chinese appliance company, will soon set up an air-conditioner production facility in Thailand to curb risks from the deepening US-China trade row and expand in Southeast Asia.
According to Yi Xiaobing, managing director of Hisense International Thailand Co, the distributor of Hisense electrical appliances, the parent company recently decided to build an air-conditioner factory in eastern Thailand. Construction is expected to start within the next few years.
Thailand will be the sixth location with a Hisense factory after China, Mexico, Slovakia, Czechia and South Africa.
"The parent company's executives have travelled to Thailand several times to explore business opportunities," Mr Yi said. "They have also met government officials and domestic parts manufacturers."
He did not disclose the exact investment budget, saying only that the investment is as much as 1 billion baht.
"Hisense has chosen Thailand because of its big population and Thailand is the world's second-largest air-conditioner manufacturing base after China, which makes 50 million units," Mr Yi said. "About 10 million air-conditioner units are produced and exported to the global market each year."
According to Mr Yi, many Chinese appliance brands are ready to set up production bases internationally.
Hisense's main purpose in setting up plants overseas is to shield itself from the impact of US-China trade squabbles in the future, he said.
Hisense's business in Thailand has been doing well since its introduction three years ago.
"Hisense products are well accepted by Thai consumers, particularly TV sets," Mr Yi said.
He cited IHS Markit, a global information provider, which ranks Hisense as a global top-10 Chinese brand builder overseas in 2019, moving up to sixth from ninth place last year.
Chanchai Bhandhufalck, the company's director of sales and marketing, said Hisense posted domestic sales of 400 million baht in 2018, 95% of which came from the TV business.
Sales are expected to leapfrog to 750 million baht this year and 1.5 billion baht next year.
The company will introduce a full line of TVs and refrigerators into the Thai market this year.
After debuting in Thailand in 2016, Hisense has a 2% market share of the 20-billion-baht TV market.
Mr Chanchai said the company will broaden its home appliance portfolio with the launch of washing machines next year.