Panasonic Corp. will close its lithium-ion battery plant in Kaizuka, Osaka Prefecture, and move all production to Suzhou, China.
The move, which could be made this fiscal year, is aimed at cutting costs to allow the company to respond to cut-price competition from South Korean manufacturers.
Panasonic joined hands with Sanyo Electric Co. in 2008 to acquire that company’s industry-leading battery business. It later put Sanyo under its huge umbrella, after investing heavily in the business.
Energy Co., the operation created by combining the two makers’ battery businesses, currently has a slightly bigger share than Samsung SDI Co. in global consumer lithium-ion battery shipments. However, the high value of the yen against the won is making it difficult for the Japanese cell maker to compete with South Korean firms on price.
In April last year, Panasonic announced the construction of a new plant in Suzhou aimed at lowering labor costs and limiting the effects of foreign exchange rate fluctuations.
Panasonic plans to start operating the plant by the end of this month. The functions of former Sanyo plants, including one in Sumoto, Hyogo Prefecture, will be concentrated into the Suzhou plant. By the end of fiscal 2012, the production of the Kaizuka plant is expected to be moved to the plant.
Panasonic plans to increase production in China to half its total lithium-ion cell production in 2015, compared with the current 80 to 90 percent now manufactured in Japan.
The company, which has already informed its union of the transfer, plans to retain about 800 of Kaizuka’s workers, mainly by transferring them around the country.
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