Matsushita to spend US$2.4 billion on world's largest plasma panel plant

TOKYO (AP) - Matsushita Electric Industrial Co. said Wednesday it will spend 280 billion yen (US$2.4 billion) to build the world's largest plasma TV display panel plant amid expectations of a surge in demand for flat-panel televisions. In a mid-term business plan also announced Wednesday, the Osaka-based maker of Panasonic-brand electronics said it aims for sales to hit 10 trillion yen (US$84 billion) by the end of March 2010, compared with an estimated 8.950 trillion yen in fiscal 2006.

Matsushita dominates in plasma display flat-panel TVs and its Viera line faces little competition.

Plasma is a different technology from liquid-crystal displays also used in slimmer TVs. Competition is fierce among a number of makers including Samsung Electronics Co. of South Korea and Japanese electronics maker Sharp Corp.

In a move that would consolidate its lead, Matsushita said it was boosting plasma panel production with a new plant in the western industrial city of Amagasaki that will roll out one million display units a month - the most in the world, according to a company statement.

Construction will start in November and the factory - the fifth domestic plasma plant for the company - will go on line in May 2009, the statement said.

Matsushita, like other Japanese electronics makers, has embarked on cost-cutting overhauls after getting battered by a plunge in electronics prices and tough competition from cheaper Asian rivals starting about five years ago.

While other Japanese companies have struggled, Matsushita has been able to offset the effects of global price competition and rising raw material costs with cost-reduction efforts, as well as a strategy of focusing on key profit-generating products like plasma TVs that can command leading market share.

In its business plan, Matsushita forecast the global plasma display panel market to surge to 30 million units in 2010 from about six million in 2005.

That growth is likely to contribute to double-digit growth in overseas sales over the next three years, the company said.

© The Canadian Press, 2007