The Panasonic Group says it will spend 1 billion baht (approx. U.S. $24.5 million) to merge two plants to boost production and make Thailand the Japanese electrical and electronic goods company's regional hub within the next few years.
The merger of the two plants at the Welgrow Industrial Park in Chachoengsao provinces is to begin in September. By January, the refrigerator plant is scheduled to merge with the manufacturing facility for washing machines, electric pots, and rice cookers. The combined plant will continue to export to Japan and other Asian nations. The Thailand plants are among 14 key overseas sites wholly owned by the Panasonic Group, which has its headquarters in Tokyo.
Daizo Ito, CEO of the Panasonic Group in Thailand, said the plant merger was aimed at reducing production costs, and boosting Panasonic's market competitiveness. But it was too early to estimate how much it would save. The move comes as Thailand and Japan continue negotiations on a free trade agreement, and Panasonic hopes to cash in on FTA benefits.
Mr. Ito said no employees would be laid off because of the merger, and that Panasonic in fact had plans to increase its Thai workforce. He was optimistic about investment in Thailand, and said Panasonic was already committed to raising its own investment. Panasonic has projected sales of all products made in Thailand, including exports, would grow to 75 billion baht (approx. $1.8 billion) in 2006, up from 60 billion baht (approx. $1.5 billion) this year.
The company projects sales of 15.2 billion baht (approx. $371.6 million) for audio-visual systems, batteries, and home appliances, up 13 percent from last year. Of the total, 9.5 billion baht (approx. $232.2 million) would come from audio-visual and battery products from Panasonic Siew Sales (Thailand) Co, while 5.7 billion baht (approx. $139.3 million) would come from home appliances under Panasonic A.P. Sales (Thailand) Co.
Mr. Ito said the company was confident of achieving this year's sales target, despite tight consumer spending. From April to June, the company's fiscal first quarter, it reported sales of audio-visual systems, batteries, and home appliance products grew 5 percent year-on-year to 2.3 billion baht (approx. $56.2 million). (Bangkok Post)
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