Vast parts of Europe lay in ruins in 1945 when Candy rolled out the first Italian washing machine. It was just months after the end of World War II and the continent was in chaos.
Fast forward more than 70 years and the Fumagalli family-owned manufacturer is back in the news after being sold to Chinese conglomerate Haier for 475 million euros (US$547 million).
“By joining forces with Candy’s management team, Haier aims to expand its leadership in ‘smart’ home appliances in Europe,” the company announced in a media statement.
At first glance, this looks like a good fit. The electronics giant, which is based in the Shandong port city of Qingdao, is run by charismatic CEO Zhang Ruimin.
Born four years after Candy launched its first domestic washing machine, the 69-year-old has revolutionized Haier, which rose from the ashes of the Qingdao Refrigerator Factory in the 1980s.
With a unique management style, he has always had his eyes focused just over the horizon. “Competition in the Internet era is not between companies but between platforms” is one of his more erudite quotes.
Aggressive acquisitions such as the $5.4 billion he paid General Electric for its appliance business in 2016 helped turn the group into a major global player.
The takeover came after snapping up New Zealand’s leading white goods manufacturer Fisher & Paykel in 2012, and Sanyo Electric’s washing machine and consumer refrigerator divisions in Japan the previous year.
Now, a Fortune 500 company with nearly 77,000 staff, Haier produces an array of ‘smart’ home appliances such as washing machines, fridges, aircon units and cookers.
Zhang has pursued a heavy “Internet of Things” policy or a network of interconnected devices and products.
“The task is not to turn Haier’s internal staff into entrepreneurs, but rather to attract all the entrepreneurs in society onto our platform,” he told Fortune magazine.
His approach has boosted the bottom line in a highly competitive marketplace. Last year, the company’s global turnover was 241.9 billion yuan ($30.47 billion) with profits of 30 billion yuan, according to Haier’s website.
With customers in more than 100 countries, the group is making a big push in Europe with the Candy move.
“Haier aims to expand its leadership in smart home appliances in Europe in the current era of the ‘Internet of Things’ and to provide high-quality products and customer service to European and global customers,” the statement outlined. “This investment is an important milestone in Haier’s global development strategy.”
Still, Zhang and his company have close links to the ruling Communist Party. Moreover, the firm is divided into several divisions with two listed subsidiaries, Haier Electronics in Hong Kong and Qingdao Haier in Shanghai.
It is the SSE entity that was involved in the Candy acquisition, which included the Hoover brand.
Known for its innovative style, the Italian manufacturer “invented the modern front loading washing machine in the late 1950s” and now has six factories in Italy, Turkey, Russia and China with earnings of 1.15 billion euros last year.
This was a 14% jump in revenue compared to 2016 numbers with the sale of washing machines making up half of the company’s income.
Nearly 70% of turnover also came from European Union nations with the United Kingdom, France and Italy the top three markets, according to the group’s figures.
“Qingdao Haier and Candy are highly complementary in brand and product portfolios, as well as supply chains. The combination is expected to further enhance both sides’ competitiveness in the European and global markets,” Candy said in a statement at the end of last week.
It will also open up a new customer base in Europe at a time when China’s major manufacturers are being buffeted by another war, this time about trade, after being squeezed out of the United States.