Japan’s Matsushita Electric Industrial Co. Ltd. announced 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 company will break ground on Oct. 18 for a new appliance company in eastern China’s Zhejiang province.
The Nihion Keizai Shimbun business daily reported that the complex will make washing machines, rice cookers, and other home electronics, and is expected to generate annual sales of about 10 billion yuan (U.S. $1.21 billion).
Matsushita has fallen behind rivals such as China’s Haier Group and South Korea’s LG Electronics Ltd. in pricing largely due to overlapping production facilities spread out across China and Southeast Asia.
The company hopes that by consolidating white goods production in the new Zhejiang complex, it will reduce costs to better weather touch price competition with Haier, LG, and other industry players.
Matsushita is said to be investing about 20 billion yen (approx. $183.5 million) to build the washing machine plant with an annual capacity of 3 million units. The plant is expected to become operational in October 2005. (Reuters)
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