TCL TO MOVE TV MANUFACTURING TO MEXICO AND THAILAND

TCL -- merging TV operations with Thomson (CED Nov 4 p1)-- will move production to Mexico and Thailand as it seeks to counter anti-dumping duties imposed on sets imported from China.

The 4%-24% duties are expected to be imposed by the Commerce Dept. after an International Trade Commission (ITC) decision last week that found the U.S. CRT industry was damaged by imports from China (CED May 17 p1). Commerce is expected to make a final ruling May 26.

TCL is expected to shift production of TVs to Thomson plants in Thailand and Juarez, Mexico, as the companies complete the merger of their set operations in July, a Thomson spokesman confirmed. The Juarez factory assembles direct-view and rear projection TVs, while the Thailand facility handles 13” and smaller sizes, he said. The combined business will also have access to Thomson’s plant in Poland, as well as TCL’s facilities in China, Vietnam and Germany, the Thomson spokesman said.

“The tariffs will not impact on TCL’s performance because we can move the affected products to other countries,” TCL Managing Dir. Yan Yong was quoted by Reuters as telling reporters after the firm’s annual meeting on Tues. Yong’s comments were the first made by Chinese TV makers since ITC voted to impose duties on 21” and larger TVs on Fri. TCL said its venture with Thomson will have a combined annual production capacity of about 5 million units in Thailand and Mexico, from where TVs for the U.S. market could be shipped.

TCL said it expects to export 4.5 million TVs this year, but it didn’t say how many would be to the U.S. Analysts said the impact on TCL would be minimal since only about 30% of the firm’s TV exports are destined for the U.S. Among other Chinese manufacturers affected by the ITC decision are Sichuan Changhong Electric Appliance, whose exports would be subject to a 26% duty. The levies on TCL, Skyworth Digital Holdings and Shenzhen Konka Group would be 21.25%, 22.94% and 9.69%, respectively.

TCL’s decision to move production for the U.S. outside China confirmed what many industry observers had expected. During the last round of anti-dumping cases in the 1970s involving TVs imported from Japan, imposition of duties caused many Japanese manufacturers to bring production to N. America.