Swedish telecoms equipment manufacturer Ericsson is in talks with its partners in two Chinese joint ventures to rationalise manufacturing in the country, Reuters reported. The company said that its joint ventures in Beijing and Nanjing currently produce both cellular network gear and handsets and the aim is to have one venture in Beijing making handsets and one in Nanjing producing network gear. The capital would also be restructured, with each partner having a stake in both joint ventures. In addition, Ericsson would increase its stake in the Beijing venture from 49 to 51 per cent. It currently holds 53 per cent of the Nanjing venture.
One of Ericsson’s partners, Nanjing Panda, was reported by Shanghai Securities News to be in negotiations to take a stake in a Beijing-based joint venture between Ericsrently son and China PTIC Information Industry and that PTIC was negotiating for a stake in the venture between Ericsson and Nanjing Panda. Ericsson also revealed plans to sell its 65 per cent stake in a third China venture, Nanjing Ericsson Panda Mobile Terminals.
Analysts quoted by Reuters said that the reshuffle was being made in preparation for the transfer of the handset operation to Ericsson’s handset joint venture with Sony, set up in 2001 to take over the loss-making handset divisions of both companies.
Ericcson has 10 joint ventures and four solely funded enterprises in China. Last month it opened its sixth research and development centre in the country.