US-based Gillette Co, a global leader in alkaline batteries, has bought a majority share in Fujian Nanping Nanfu Battery Co Ltd, one of China's largest battery producers and also Gillette's major rival here.

Industry insiders are worried the move is likely to deal a blow to domestic battery makers and give the US-based heavyweight a dominant position in the Chinese market.

Nanfu accounts for around 30 per cent of the country's battery market in terms of sales volume while Gillette, which makes and markets batteries in China under the Duracell Copper & Black and Duracell Ultra labels, has a market share of about 10 per cent.

The acquisition was announced by Gillette earlier this month at company headquarters in Boston, Massachusetts.

According to the announcement, the transaction was completed by acquiring the entire equity interest in Nanfu's shareholder China Battery International Ltd from China Battery Holdings Ltd.

The US company did not disclose the financial terms of the transaction, but said the deal would nominally add to its earnings this year.

The China Battery Industry Association was not pleased by the news. "We are unwilling to see it (the acquisition), but it already happened," said a senior official with the association.

A recent media report in Shanghai said Gillette has taken over a controlling stake of up to 70 per cent in Nanfu, quoting an anonymous resource from the company.

However, the company refused to confirm details of the acquisition and made no comments on the deal.

The report said the US firm was seeking all the stakes from Nanfu's overseas shareholders but the domestic shares, which account for between 20 and 30 per cent of the company, will remain in domestic hands for the time being.

Founded in 1988, Nanfu became a joint venture in 1999 by acquiring capital from investors in the United States, Singapore and the Netherlands, among other countries.

The Nanfu-branded alkaline batteries have been China's top-selling battery product for around 10 years.

The company reported revenues of around 700 million yuan (US$84.34 million) and a net profit of 99.07 million yuan (US$11.96 million) last year.

In the early 1990s, foreign battery products like Duracell and Energizer accounted for more than half of the Chinese alkaline-battery market.

Nanfu and other domestic battery brands grabbed the market share from the foreign giants in recent years by offering similar quality products at lower prices.

Close

Today's Top News		Top Business News
+The next great leap after Shenzhou V ( 2003-10-21) +Hu calls for balanced development ( 2003-10-21) +Report: SARS not airborne virus ( 2003-10-21) +Japan urged to resolve weapons issue ( 2003-10-21) +Int'l AIDS group opens Beijing office ( 2003-10-21)		+Home-appliance giants want wheels ( 2003-10-21) +Exchange-rate reform under study ( 2003-10-21) +Health insurance sector called for ( 2003-10-21) +SanDisk teams up to open outlets ( 2003-10-21) +Housing prices start to sag in Shanghai ( 2003-10-21)