The world's leading bath and kitchen appliance provider, Kohler Co is building its fifth factory in China in a bid to better serve the local market.

The factory, which manufactures taps, will be up and running next year in Nanchang, capital of East China's Jiangxi Province.

"China is a unique market. It is dynamic and huge. We must understand local needs and respond to them quickly," said David Kohler, president of the US firm's kitchen & bath group.

He said the firm is leading the market in China, overtaking major competitors like TOTO and American Standard, adding that it will maintain the position by modifying its products to better suit local needs.

Kohler told China Business Weekly during his visit to Beijing that the firm is thinking of establishing a research and development (R&D) centre in China within five years.

Its R&D centres are currently in the United States and France.

He said Chinese customers expect good quality and uniquely designed products, which he said is Kohler's mission.

"We re-invest 90 per cent of our profits back into R&D each year. We develop products together with seasoned engineers and marketing professionals to ensure that the products are not just aesthetically appealing, but are also superior in functional performance.

"This year 66 new products have been introduced to the market, and we have already introduced many of them to China," Kohler said.

He added the firm is diversifying its product line in the country to meet the various local demand.

"Our products are affordable to ordinary Chinese families, although they are the world's best in many ways," he said.

Wang Zheng, Kohler China's advertising and publications manager, said its target customers are families with a monthly income of over 5,000 yuan (US$603.86).

Kohler said the industry's major trend this year is diversification. "For example, some of them may prefer contemporary European styles with simple and neat designs, while others would choose the classic designs with more decorative design lines and refined details."

He emphasizes customers today have recognized that the bathroom is not just a place for washing and cleaning, but rather a space to relax and pamper themselves.

He said China, especially cities like Beijing, Shanghai and many provincial capitals are catching up with global trends.

"The country's construction and real estate business has been growing fast, thus it brings us a lot of growth opportunities," he said.

Kohler Co is a family company with a 131-year history. It has been exporting products to China for over 30 years and it started local manufacturing in 1997. So far the firm has factories in Beijing, Shanghai, Foshan of South China's Guangdong Province and Changzhou of East China's Jiangsu Province.

It established its Asia-Pacific headquarters in Shanghai, and set up its flagship Asian showroom in the city two years ago.

The firm has more than 300 sales outlets throughout China.

(China Daily July 14, 2004)