Panasonic reforms production of LED products

Panasonic Corp. to concentrate LED lighting equipment production in Japan. The decision to relocate manufacturing facilities from Indonesia to a major Panasonic plant in Japan’s Mie Prefecture stems from a global strategy to improve profitability initiated by Panasonic Corporation president Kazuhiro Tsuga.

Until recently, up to 80% of LED products made in Indonesia were destined for the Japanese market. The weakening of the yen increased import costs and made domestic production more profitable.

However, starting this year, LED products for Southeast Asian and Chinese markets will be produced at another Indonesian plant in the eastern part of Java. Until June of this year, the company manufactured fluorescent lamps. The cost of production, including labor and land rent, is much lower here than in the Jakarta area.

The development of high-margin branches of business is one of the most important initiatives of the new president of Panasonic Kazuhiro Tsuga. This strategy should increase the corporation’s consolidated annual sales to 10 trillion yen by March 2019. Panasonic also expects to increase sales of homebuilding products and solutions by 50% to 2 trillion yen by fiscal 2018 compared with the 2014 fiscal. year .

Production of lighting equipment is one of the key lines of Panasonic business. Last fiscal year, sales in this segment totaled 317.7 billion yen $2.52 billion and operating profit reached 4.7%. In the current fiscal year the corporation intends to increase LED business margin to at least 6%.

As Japan’s largest LED lighting manufacturer, Panasonic controls about 40% of the domestic market. The corporation expects that due to steady growth of demand for LED technology in Japan and abroad, production of lighting solutions will become one of the drivers of growth.