ฺBangkok--Mar 9--LIG
London International Group plc (LIG), the world's leading condom manufacturer, announced in Beijing the establishment of China's first condom joint venture. The Qingdao London International Latex Company Limited (QLILC) is an equity joint venture with the Qingdao Latex Company, one of China's top condom manufacturers. QLILC will manufacture, market, sell and distribute the world's number one brand -- Durex(r) -- in the world's most populous country. The joint venture facility, which is located in Qingdao, in eastern China's Shandong province, represents a total investment of almost US$7 million, shared equally between the two partners.
By establishing QLILC, LIG demonstrates its long-term commitment to developing the Chinese condom market. The Chinese government encourages the use of condoms as the safest and most effective form of birth control and protection against sexually transmitted diseases (STDs) as part of its strategy to limit the Chinese population to 1.3 billion by the year 2000, and to slow the spread of STDs.
Mr. Nick Hodges, Chief Executive of LIG, said, "We are delighted to have QLC as our joint venture partner, and are confident that by working together with the Chinese authorities, we will grow the branded condom market in China for the benefit of all and further enhance the global leadership of the Durex(r) brand."
Positioned at the premium end of the market, Durex(r) condoms produced by QLILC will initially be marketed in China's key urban centres, Beijing, Shanghai, and Guangzhou, where condom usage at approximately 12%,* is at its highest in China.
(*Source: Department of Planning and Statistics, State Family Planning Commission, 1984-1995)
While China's annual condom output volume of 1.2 billion pieces has been traditionally dominated by the government free supply programme, the retail condom market is set to increase dramatically over the next few years as income levels rise and as consumers make a more informed choice of contraceptive. Chinese government policy encourages the promotion of the condom as a safe, convenient, and sanitary form of contraception with the important advantages of having no side effects and preventing STDs.
At the signing ceremony QLC's Chairman, Mr. Liu Yushi said, "Both partners are grateful for the support and guidance of the State Family Planning Commission and the Ministry of Chemical Industry that has enabled us to bring this project to fruition. We at QLC have a proud record of technical and managerial excellence which we are happy to bring into this joint venture with LIG. QLILC is confident that it can assist in achieving the goals of China's family planning and public health policies by introducing its quality Durex(r) condoms to the Chinese consumer."
QLILC promises an uncompromising commitment to quality of product and service, high profile consumer marketing and education initiatives. All Durex(r) condoms are manufactured to the highest international standards, including specifications set by the International Standards Organisation (ISO), and the new European CE standard -- the most stringent national standard in the world.
Mr. Peter Simpson, Managing Director, LIG Asia Pacific, said, "We are proud to be able to offer one-fifth of the world's population the highest quality in thin film barrier protection.
From import sales Durex(r) already has a growing presence in China, yet local manufacture is the key to enable LIG to become a major player in the Chinese branded condom market, as well as in its non-commercial unbranded market. We chose Qingdao as the location for our joint venture not only because we found an outstanding joint venture partner there, but also because Qingdao boasts an excellent investment and natural environment."
Mr. Lin Shaoxu, Vice President of China United Rubber Corporation, (CURC), the subsidiary of the Ministry of the Chemical Industry which is responsible for government condom production in China, said, "We welcome the co-operation of well-known foreign firms such as LIG to promote the growth of China's latex industry. As China makes the transition to a socialist market economy, family planning remains a state priority. This joint venture, producing quality condoms in partnership with one of our leading factories, will play an important role in underpinning our family planning and public health programmes."
Mr. Simpson added, "LIG is a strong supporter of safer sex educational campaigns throughout the world, and we look forward to working with China's family planning and public health authorities to promote the use of condoms as the most effective means of both birth control and STD prevention."
British Embassy Minister Tony Sprake commented, " I would like to commend LIG, one of Britain's most successful international companies, as the first foreign company to set up a condom joint venture in China. With its technical leadership, innovation and long-term commitment to China, LIG's project is an excellent example of the Sino-British co-operation that is being highlighted this year by the Britain in China campaign launched in January by the President of Board of Trade, the Rt. Hon Mrs. Margaret Beckett MP."
Established in 1956 as the state-owned Qingdao Latex Factory, QLC became a pioneer in modern enterprise reform in Shandong province when it was transformed into a shareholding company in June 1994. QLC remains one of the key enterprises under the Ministry of Chemical Industry and employs over 1,000 personnel. In addition to being the second largest supplier of condoms to the state, QLC also produces the popular retail brand Double Butterfly, and other latex goods including medical gloves.
Currently capitalised at over ?570 million (approximately US$920 million), LIG is one of the United Kingdom's top 200 companies. In the financial year ending March, 1997, the Group reported pre-exceptional pre-tax profits of ?35.6 million (US$57.7 million) on sales of ?339.2 million (US$550.0 million). LIG employs approximately 4,880 staff world-wide and has 11 manufacturing facilities located in North America, Europe and the Asia Pacific region. In addition to Durex(r) condoms, LIG core products include Regent(r) medical gloves and Marigold(r) industrial and specialist gloves. --End.