Guangdong Kelon Electrical Holdings, the mainland's largest refrigerator-maker, has diversified into the washing-machine sector with Whirlpool - the world's second-biggest appliance firm. But the new business will not contribute much to the H share's bottom line next year, as Kelon plans to build up market share, which will increase advertising and marketing expenses. Analysts said the move would augment Kelon's earnings, which are expected to grow about 10 per cent in the next two years, as the refrigerator market was set for slower expansion. Wang Guoduan, who officially replaced Pan Ning as president yesterday, said Whirlpool's Shanghai factory would be the OEM (original equipment manufacture) producer for Kelon brand washing machines next year. 'Without making fixed-asset investment, we are utilising our intangible assets - a national distribution network and strong brand market recognition - to expand our home-appliance product range,' said Mr Wang. Mr Wang is also expected to take up the chairmanship from Mr Pan at the annual meeting in March. About 6 per cent of washing-machine sales would be earmarked for advertising and promotion next year. Mr Wang said the Shanghai factory had an installed capacity of 500,000 washing machines, but it made only 100,000 this year due to poor distribution. Whirlpool would initially continue to sell its own brand washing machines in Jiangsu, Zhejiang and Shanghai, while the Kelon brand would be sold in other areas. In about three years, Whirlpool would stop selling and Kelon would take up the remaining mainland market, he said. Kelon plans next year to sell more than 100,000 washing machines - which have the lowest gross margins among its products - compared with its orders on hand of 162,000. It is aiming to sell 2.4 million refrigerators next year, compared with this year's planned 2.3 million, while it also hopes to sell 1.2 million air-conditioners next year and 250,000 freezers. The targets are based on orders on hand of 2.86 million refrigerators, 1.78 million air-conditioners and 313,000 freezers. Mr Wang said the orders were worth about 16.5 billion yuan (HK$15.35 billion) and usually about 70 per cent of orders would materialise. Kelon plans to expand its OEM business to other home appliances, which will account for about 30 per cent of its business, with refrigerators and air-conditioners contributing about 60 to 70 per cent of that.