Rail link sharpens Europe picture

TCL Multimedia to expand Chengdu TV plant capacity, grow European sales; also plans Russian factory

TCL Corp, the Huizhou, Guangdong-based and Shenzhen-listed company, will expand the annual production capacity of its factory in Chengdu, capital of Sichuan province, by 800,000 TV sets by the end of 2017, to exploit a new opportunity presented by a Eurasian railway service.

The Chengdu plant's current annual capacity is 2 million TVs, which are sold mostly in northwestern and southwestern China.

The planned capacity expansion would make it TCL's second-largest plant after the facility in Huizhou.

"We will make Chengdu our major manufacturing base for TVs sold in Europe," said Liang Tiemin, vice-president of TCL Multimedia Technology Holdings Ltd, a Hong Kong-listed subsidiary with focus on manufacturing and distribution of TVs.

So, the new components to be made in Chengdu will be transported by train to the company's plant in Zyrardow, 45 kilometers southwest of Warsaw, Poland's capital.

There, they will be assembled into TVs and sold in Europe, said Liang.

The Zyrardow factory is one of TCL's major plants in Europe. It is also the biggest factory set up in Poland by a Chinese company, with an annual capacity of 2.2 million TV sets.

It can ship products to major European cities in just one day and far-flung areas in under four days.

Liang said TCL Multimedia restructured its production to exploit the 9,800-km nonstop Chengdu-Lodz cargo route of China Railway Express, which opened in April 2013.

The line runs through Kazakhstan, Russia, Belarus before reaching a terminal with cargo unloading facilities in Poland.

Since January, 99 percent of the components of TVs sold in Europe were made in Huizhou and Chengdu and transported on the Chengdu CR Express, said Tomasz Olender, deputy general manager of TCL Operations Polska, the company's unit in Poland.

In the past, Olender recalled, TCL exported such components to Europe by sea, which used to take more than six weeks. Now, the Chengdu CR Express takes less than two weeks.

"This makes us more competitive, because our customers in Europe want to receive our products very fast," he said.

Liang said the company had considered shipping TV components to Europe by rail 10 years ago. But the effort did not bear fruit for want of adequate government support.

Now, however, the Belt and Road Initiative and the launch of the Chengdu CR Express have helped the company realize its dream as well as boost its business in Europe.

TCL is nursing ambitious plans for the European market, he said.

According to the Chengdu Port and Logistics Office, Chengdu is planning to launch an express goods rail line to Russia by the end of this year.

Liang said the company would build a new factory in Russia if the Chengdu CR Express is given the benefit of a cargo terminal close to Moscow.

For, TCL already has a factory in Kaliningrad, from where products take four days to reach Moscow.

TCL is also considering to sell more air conditioners, refrigerators and washing machines to Europe by making their components in Chengdu and transporting them on rail to Poland for assembly, Liang said.

He said railway is generally more expensive than sea for shipping cargo, but with the subsidy offered by the Chengdu government, it costs less now.