Chinese Appliance Powerhouses Increase Investment in Middle East

 

As the World Cup in Qatar draws attention, it is evident how important the region's markets are to Chinese businesses given the number of sponsors and suppliers they have lined up. To increase their position in the Middle Eastern and African markets, Chinese white goods producers in particular are increasing their investment in nations like Egypt and Turkey.

 

According to Yicai Global, Haier Smart Home, which operates two industrial parks, three plants, and three marketing centres in nations like Egypt and Nigeria, intends to invest USD130 million to construct a 200,000 square metre complex in Cairo that is expected to be complete in early 2024.

 

According to Fang Xuejing, an analyst with ChinaIOL, Egypt is of particular interest to Chinese white goods companies because, despite having high import tariffs, it has bilateral trade agreements with many nations in northern and eastern Africa. As a result, goods made in Egypt can be shipped into these nations quickly.

 

The Middle East and Africa general manager of Midea Building Technologies Overseas Marketing, Dennis Lee, told Yicai Global yesterday that despite some unstable geopolitical factors, there are many opportunities for the Midea Group due to the region's high demand for air conditioners and high temperatures.

 

 

As the largest supplier of air conditioners in Egypt, Miraco, Midea invested USD57.5 million in 2010 to acquire a 32.5 percent stake, making it the company's second-largest shareholder.

 

According to the 2021 annual report of the Foshan, southern Guangdong province-based group, Midea now has a branch office in Dubai as well as an air conditioner production base, a refrigerator, laundry machine, and water heater factory in Egypt, which will serve the Middle Eastern and African markets.

 

Over 80% of its sales of central air conditioning in the Middle East are from its own brands, including Midea and Clivet. According to Lee, the business is considering investing more in regional production to speed up deliveries.

 

For Chinese businesses looking to access the Middle Eastern market, Turkey is a popular entry point. In order to construct a dishwasher factory and a tumble dryer factory in the nation, Haier spent over EUR85 million (USD88.7 million).

 

A Middle Eastern division of the Hisense Home Appliances Group, one of the World Cup's official sponsors, is situated in Dubai, and an African division is based in South Africa. In 70 different nations, its sales network reaches 1.4 billion individuals. This year, the business with headquarters in Qingdao, eastern Shandong province, wants to construct its own call centres and after-sales facilities in significant regional cities.

 

Certainly, there is a need. According to data from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, China's exports of colour TVs to Qatar increased 36.2 percent in the first 10 months compared to the same period last year, while the export value of white goods increased 14.9 percent.

 

The value of China's exports of colour TVs to the 22 League of Arab States nations, including Qatar, increased by 11.2 percent and 29.0%, respectively, from January to October of last year.