Greece-based Frigoglass Group, a leading supplier of drinks refrigerators, has launched its first Chinese investment project in Guangzhou.

Construction of the project, involving an investment of over 150 million yuan at the initial stage, began in September 2006 and the facility is set to become operational by November this year.

The facility will be able to produce over 120,000 units annually for the domestic market as well as for other markets in Asia, Africa and Europe.

Dimitris Valachis

Instead of making general types of refrigerators for soft drinks and beer, Frigoglass will provide so-called ice cold merchandisers (ICMs) glass-door refrigerators with merchandising solutions to stimulate consumers to buy soft drinks and beer.

"The market for ICMs is at an early stage in China," said Dimitris Valachis, director of the group's China Operations, in an exclusive interview.

"The rising disposable incomes, higher living standards of the Chinese people, and the fast-growing retail business, especially the modern trade and large-scale chain stores, all suggest that market growth will be sustained in China."

Valachis said impulse sales solutions for beverages was an underdeveloped market in China, one of the top consumers of beer but with a low per capita consumption of soft drinks.

"Soft drinks and beer suppliers are turning more and more to ICMs to bolster growth strategy and new product introduction," he said. "As one of our key focus regions, we have been observing the market conditions in China for the past couple of years."

He said the Guangzhou project would also enable Frigoglass to improve services to its global clients including Coca-Cola, Pepsi, Heineken, SABMiller, Inbev, Nestle and Red Bull, all of which have already invested in China.

The firm will introduce a tailor-made product range for the Chinese market. Valachis said the firm would draw on its experience and knowledge of other markets to optimize the product range for the Chinese market in terms of outlets, placement conditions, brands and packaging.

The Guangzhou facility will be environmentally friendly and innovative, according to Valachis. He said its products were 30 percent more energy efficient than conventional models.

The global brands Freser and Sanden as well as several Chinese refrigerator suppliers including Haier also supply similar products to the Chinese market.

He said the Guangzhou plant will work closely with its research and development (R&D) teams in Greece, India and South Africa, and a local R&D facility will be set up next year.