Wednesday, November 24, 2004
Sanyo to invest in Thai unit, shut Singapore plant
Reuters Tokyo, November 24
Japan's Sanyo Electric Co Ltd said on Wednesday it would raise its stake in a Thai unit and close a factory in Singapore as part of a plan to streamline production of home appliances in Southeast Asia.
Sanyo is gearing up for intense competition with other "white goods" producers as members of the Association of South East Asian Nations (ASEAN) work towards reducing tariffs within the region and forming free-trade agreements with China.
Sanyo, whose home appliances business has been in the red for the past three years, said it would boost its stake in Sanyo Universal Electric (SUE) to about 90 per cent by the end of the year, seeking to shore up the finances of the struggling unit.
Osaka-based Sanyo had already raised its stake in SUE, its sole production base for white goods in Thailand, to about 70 per cent from 30 per cent last December, reducing the holdings of its Thai partner, the Premier Group, and other shareholders.
"We want to strengthen our white goods business in the (ASEAN) region," Sanyo spokesman Ryan Watson said.
The company, whose home appliances business accounts for about 10 per cent of group sales, said the total capital increase would cost the company about 5 billion yen ($48.38 million).
Sanyo said it would lift the Thai unit's output of refrigerators, including those produced on an original equipment manufacturer (OEM) basis, by about 20 per cent to 1.2 million units in the business year ending March 2006.
As part of its realignment of production in Southeast Asia, Sanyo also plans to shutter a refrigerator factory in Singapore in December and fire most of its 280 workers. Production will be transferred to the Thai unit sometime after April 1, 2005.
The company plans to boost its production in other parts of Asia, focusing on products that meet the needs of local markets. It will produce relatively cheap refrigerators in Indonesia, for example, while manufacturing larger refrigerators in Thailand.
Sanyo, the latest Japanese firm to unveil plans to bolster home appliance operations in Asia and meet fast-growing demand in the region, is aiming to raise global refrigerator output by about 20 per cent to three million units a year.
Matsushita Electric Industrial Co announced plans last month for a major home appliance manufacturing complex in China. Toshiba Corp said three weeks ago it would form joint ventures with China's TCL Corp to make and sell appliances in the mainland Chinese market.
© HT Media Ltd. 2004.