Panasonic president wants ninefold increase in profit margins

Panasonic Corp. aims to increase its operating profit margin nearly ninefold over the next seven years.

Company President Kazuhiro Tsuga told The Asahi Shimbun on July 6 that the company will focus, in the short term, on "white goods," such as air conditioners, and tailored products for corporate clients in an effort to boost its meager 43.7 billion yen ($547 million) operating profit in fiscal 2011.

That represented a margin of only 0.6 percent against total sales of 7.846 trillion yen, with weak prices of flat-panel TVs and semiconductors taking a toll on performance.

He said the company aims to raise its operating profit margin to 3.2 percent in fiscal 2012 and to 5 percent or more in fiscal 2018, when the company will celebrate the centenary of its foundation.

"Profits are an indicator of how much a company is serving its clients," Tsuga said.

Tsuga said he was optimistic about the long-term prospects for lithium-ion batteries for use in vehicles and solar power panels, among other products.

Tsuga said he will try to market only products with high added-value potential.

"We don't want to be embroiled in simple price wars," he said.

Panasonic announced on June 25 an agreement with Sony Corp. on joint development of organic electroluminescence (EL) displays, but Tsuga said the company will continue producing plasma and liquid crystal displays (LCDs).

"Nobody can tell if (organic EL displays) will flourish for use in TVs," Tsuga said. "I don't believe they will replace plasma and LCDs at once. Products for corporate customers will suffice as the first target of full application of organic EL technologies."