Japanese consumer electronics giant Panasonic Corp. (PC: Quote) will shut down its plasma television assembly plant on Shanghai as part of the company's efforts to streamline its flagging television business, according to media reports on Friday.
Panasonic's majority-owned joint venture with a Chinese company for the purpose of running the factory will be liquidated. The Shanghai plant has reportedly stopped operations.
According to the media reports, the operations at the Shanghai plant will be transferred to another factory in China's Shandong province, where it currently produces LCD television sets.
Although the plasma technology was initially considered for Panasonic's wide-screen televisions, rapid developments in LCD panels have made it difficult for the company to generate profits from plasma televisions. LCD televisions now dominate the market.
Media reports in November 2012 had indicated that Panasonic will slash another 10,000 jobs by the end of March 2013 as about 20 percent its 88 business units were losing money.
The 94-year-old company is in the process of cutting costs after it projected in October a staggering $10 billion loss for fiscal 2012 on asset write downs and restructuring charges. This will also take the cumulative losses in the past five years to nearly $25 billion.
Panasonic reportedly targets group operating profit of at least 200 billion yen or $2.5 billion in the year ending March 2014, primarily through sale of about $1.4 billion worth of land and buildings in Japan.
Panasonic reported its last annual profit in 2010. The company is expected to announce a turnaround plan by end-March 2013.
PC closed Friday's trading at $6.26, up $0.16 or 2.62 percent on a volume of 168,489 shares.
by RTT Staff Writer
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