Gome Appliance, China's leading home appliance retail chain, and disc player maker Idall are to set up a joint venture to develop and produce home appliances, the retailer announced yesterday.

Sources from Shantou High-tech Zone Idall Enterprise Co Ltd said the two companies struck a deal at the opening ceremony of the Idall industrial park on Sunday.

"Gome will hold a majority 51 per cent stake in the new company, which is likely to be named Gome Idall, and Idall will have the remaining 49 per cent," Idall's sales director surnamed Wang told China Daily yesterday.

The venture will be devoted to developing more individualized, diversified products, to enrich product lines supplying Gome's chain stores.

"It is expected that Gome Idall's growth will speed up with huge investment from Gome," Wang said.

The two companies have invested a total of 50 million yuan (US$6.04 million) in the first phase of the construction of the Idall industrial park.

With a building area of 20,087 square metres, the park can hold 17 production lines, more than tripling its previous capacity.

It is estimated that the new park will be able to make 3 million disc players annually.

"More money will be invested in the second phase construction for research and development, marketing and logistics facilities," the retailer said in a press release.

"The co-operation will help enhance Gome's competitiveness, with the wide spread of Idall's brand name, its R&D and production capacity."

Idall was once the top brand for VCD players in China in the mid and late 1990s, but Guangdong Idall went bankrupt as it lacked a long-term development strategy.

Shantou High-tech Zone Idall Enterprise Co Ltd, established in 2001, took over the brand and brought Idall-branded products back onto the market.

(China Daily June 21, 2005)