Chinese home appliances giant Haier Group is building a washing machine plant in Hefei, the capital of East China's Anhui province, that can produce three million units every year.
The company's move comes close on the heels of its main competitor Meiling's decision to set up a washing machine plant in Hefei with an annual capacity of 2 million units. Both the units will be in the Hefei Economic and Technological Development Area (HETDA), which also has home appliance plants of Midea and Gree.
Haier's new plant, with an investment of 1.01 billion yuan ($153 million), is based on the original plant previously owned by a joint venture of Jinan Iron & Steel and Hitachi Construction Machinery.
"Haier will put the plant into operation before the end of the year", said Ma Long, director of the industrial development department of HETDA's administration committee.
"Haier has been running a home appliances plant in Hefei since 2000, and the new plant, to produce high-end drum-type washers, is expected to double Haier's annual output value in the area from the currently over 10 billion yuan", said Ma, adding that the area now produces about 3.5 million washing machines every year.
The Haier plant will mainly serve the domestic market, while the Meiling plant will deliver 30 percent to 40 percent of its washing machines to overseas markets.
"The first phase, which is based on a former photovoltaic plant, will be finished by June to make one million washing machines annually, while the second phase will also be ready in the year following the complete of the first phase", said Huang Danian, deputy chief executive officer of Hefei Meiling Co Ltd.
"Meiling sold more than 600,000 washing machines in 2016, far from meeting the global demand," said Huang.
Earlier this year, Meiling and the Italian company Candy Group established a 150 million yuan joint venture in Hefei. The joint venture will focus on research & development and sales of refrigerators and washing machines, while the manufacturing plant will be owned exclusively by Meiling.
"Meiling washing machines will generally be bigger and offer more options to wash different types of clothing and apply internet of things technologies."
"More and more locally-based home appliances makers are upgrading their product catalogue to more high-end products", said Ma of HETDA.