Japan's Matsushita Electric Industrial, best known for its Panasonic brand of consumer electronics and digital communications products, has announced growth strategies for next year aimed at overcoming worldwide challenges like rising costs of oil and raw materials and currency-exchange risks arising from trade and budget deficits in the US.

President Fumio Ohtsubo said that under the conditions expected next year, the consumer-electronics industry as a whole was unlikely to grow substantially. Also, competition in high-growth markets is expected to intensify, as consumer preferences shift from analogue to digital audio-visual products. He said Matsushita's first growth strategy for next year was to increase its market share through its so-called "V-products", which depend largely on innovative technologies and are aimed at capturing leading shares of high-volume markets. In fiscal 2007, Matsushita will launch V-products in 82 categories, with a combined sales target of 1.8 trillion yen (Bt563 billion).

"Furthermore, we will expand marketing and advertising to highlight the unique features of V-products, while expanding our product range into more geographic regions," Ohtsubo said.

Specific sales targets for V-products include 4 million plasma televisions, for a 40-per-cent share of the global market; and 8 million digital cameras, representing 10 per cent of the global market.

He said his company's foreign operations were expected to serve as a "growth engine" for the entire Matsushita Group. It will therefore strengthen its ties with manufacturing companies in different regions.

"We will also identify strategic products and sales channels for each region and country and effectively allocate management resources, in order to boost sales," he said.

He said Matsushita's future investment would continue to be focused on strategic business, including cutting-edge systems using large-scale integrated-circuit chips and other semiconductors, as well as plasma television sets. Notable among these, production of flat-panel televisions is expected to rise to meet an increasing demand and contribute to increased sales and earnings.

Ohtsubo said global demand for plasma-display panels (PDPs), one of the main components in plasma television sets, was expected to reach 10 million units in fiscal 2007 and 25 million units in fiscal 2011.

Aimed at capturing a 40-per-cent share of that market, Matsushita's third plant in Japan will reach full capacity in fiscal 2007, boosting its total annual capacity to 5.5 million units. At a cost of ¥180 billion, the company has also built the world's largest PDP plant, expected to begin production next July and giving Matsushita an annual capacity of more than 11.5 million PDP units in fiscal 2009.

Another growth strategy is using Matsushita's strength in semiconductors. It has developed cutting-edge large-scale integrated circuit chips and other semiconductors that serve as key components in digital equipment. It will continue to develop increasingly integrated semiconductors, as well as semiconductors with unique functions, resulting in more cost-competitive products.

Matsushita will also accelerate the installation of an integrated platform across differing product categories, combining software and hardware resources so that design and development phases are shortened and a succession of attractive digital products are created.

Ohtsubo said that through collaboration with Matsushita Electric Works in such V-products as bathroom systems, modular kitchens and air purifiers, the company was planning to achieve a sales increase of more than ¥100 billion over the two-year period ending next March.

He said that despite a severe business environment in which increased raw-material costs have combined with lower product prices from intense competition, Matsushita's consolidated net sales totalled ¥8.89 trillion in fiscal 2006, up 2 per cent on the previous fiscal year. This was largely due to increased sales of plasma television sets, digital cameras and other digital audio-visual equipment in Japan and abroad. Consolidated operating profit increased 34 per cent to ¥414.3 billion, while net income surged 164 per cent to ¥154.4 billion.

Yukiharu Kubota, associate director of corporate management for Asia and Oceania, said Australia was the company's biggest market in the region, accounting for almost 25 per cent of total sales. Thailand is second, with sales this year expected to reach 18 per cent of the regional total.

Kubota said that of the company's total production of audio-visual and home appliances in the region, 33 per cent was in Malaysia and another 33 per cent in Singapore. About 10 per cent each comes from the Philippines and Indonesia, while Thailand produces about 8-9 per cent.

Kwanchai Rungfapaisarn

The Nation