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China's Haier falls short of int'l status

(Reuters)
Updated: 2006-03-06 19:23

Haier Group's overseas profitability has not yet reached the point where the company can be considered an international brand, the president of China's largest home appliance maker said on Monday.

Haier's overseas sales hit $4 billion in 2005, Yang Mianmian said, but profits from overseas sales fall short of making up her target of one-third of the company's profits.

In an animated speech to Qingdao delegates to China's annual parliament session, Yang said Chinese companies must be worth $1 billion, must earn at least one-fifth of their revenues overseas and at least one-third of their profits abroad before they can be considered an international brand.

"We have reached the target for overseas sales, but I am afraid we still fall short on profit," Yang told reporters.

"We are focusing our efforts on overseas returns."

The company expects "double-digit" overseas profit growth in 2006, Yang said.

Total sales hit $13 billion in 2005, she said, but overseas profit was "very small".

Beijing is urging China's companies to become recognised brands, rather than simply the lowest cost producers, in order to boost the profits and reputation of China Inc.

Haier, whose mini-fridges are strong sellers in the United States, made a bid last year to buy U.S. appliance giant Maytag Corp. , but dropped out when bidders with deeper pockets entered the race.

Haier is still considering foreign deals, Yang said, but refused to be drawn on exact plans or targets.

"In the future, we have to see how the brand develops. We are considering a lot of options and will take the appropriate one at the right time."