Tokyo-based Matsushita Electric Industrial Co. is planning to close half its overseas plants within 5 years, according to a report from Japanese business daily Nihon Keizai.
The Panasonic brand maker has about 170 production sites outside of Japan. The report says the company intends to shut down those showing poor financial performance, with a goal of raising its operating profit margin to 10 percent in the year starting April 2010. That is double this year's projected margin of 5 percent, the business news outlet said.
While a company spokesman said Matsushita had no specific plans to cut half of its sites, the paper reported the company will close or consolidate some 130 manufacturing units. It will also close or consolidate 40 factories that have not made a positive return on investment in 8 years, or have posted declining sales, a negative net cash balance, operating profit margins of less than 3 percent or capital costs in excess of operating profits for three straight years, the paper said. According to the paper, these criteria will apply to many small and inefficient production sites in Southeast Asia, and the shutdowns will enable Matsushita to concentrate more funds in Brazil, Russia, India, and China.
to Daily News