Friday, October 15, 2004
Matsushita to build China home appliance plant
Reuters Tokyo, October 15
Japan's Matsushita Electric Industrial Co Ltd plans to build a major home appliance manufacturing complex in China to tap growing local demand and better compete with Asian rivals.
A spokesman at the maker of Panasonic products said the firm would hold a ground-breaking ceremony for a new appliance company in eastern China's Zhejiang province on October 18, but declined to comment on the size of the complex or financial details.
The Nihon Keizai Shimbun business daily reported on Friday that the manufacturing base will make washing machines, rice cookers and other home electronics, and is expected to generate annual sales of about 10 billion yuan ($1.21 billion).
Matsushita has fallen behind rivals like China's Haier Group and South Korea's LG Electronics Ltd in terms of price competitiveness in large part because it has overlapping production facilities spread out across China and Southeast Asia.
But by consolidating production of white goods into the new complex in Zhejiang, Matsushita aims to lower its cost structure to better weather tough price competition with Haier, the world's fourth-largest appliance maker, LG and other industry players.
As the first step of the project, Matsushita will invest about 20 billion yen to build a washing machine plant with an annual capacity of three million units, the newspaper said.
The plant is slated to become operational in October 2005, the Nihon Keizai said.
In the business year ending March 2007, Matsushita aims for sales in China of 1 trillion yen, a rise of 36 per cent compared with its forecast for 734 billion yen in 2004-05. Overall group sales are expected to reach 8.8 trillion yen this business year.
The newspaper said the new base would produce appliances mainly for the local market, but will also export products to Japan and Southeast Asia.
In addition to the washing machine plant, Matsushita will also build a factory capable of making three million air conditioner compressors a year, the paper said. It will also boost output of rice cookers and other products at an existing facility adjacent to the new site.
As a result, the company will approximately triple annual production capacity for rice cookers, vacuum cleaners and gas cookers to two million units, 1.85 million units and 1.7 million units, respectively.
© HT Media Ltd. 2004.