Gree Electric Appliances Inc., China’s leading air conditioner maker, plans to invest 1 billion yuan ($143 million) in development of high-end medical equipment.
The Covid-19 outbreak spotlights the country’s “inadequacy of core technology,” said Chairwoman Dong Mingzhu. She declared Gree’s intention to enter medical equipment research and development during a virtual conference Tuesday.
Business registration data showed that Gree registered a wholly owned medical technology unit Feb. 18, with businesses covering design, production and sales of medical protective gear, disinfection equipment and operating room supplies.
But a person close to the company said it won’t be easy for Gree to tap into the new business sector because it lacks related experience. At the same time, the person said, the initiative is part of Dong’s efforts to diversify Gree’s business and reduce the company’s reliance on its core air conditioner manufacturing.
Gree forecast a gloomy outlook this year as businesses are disrupted by the outbreak. There were “nearly no sales” in February as people stayed home and shops were closed, compared with more than 10 billion yuan of sales in previous years, Dong said, warning a decline in 2020 annual sales.
Dong said the impact will be short-term and she expects a rebound of business as the outbreak wanes.