Panasonic To Open EU Fridge Plant

It has been reported this morning by Reuters that Panasonic plans to open a European factory this year to make fridge freezers, a market Panasonic is targeting as sales of televisions and other consumer electronics stagnate.

Panasonic is looking to minimize the effect of a strong yen on its exports by bringing manufacturing closer to its customers, and hopes to capitalise on any incentives that struggling euro zone governments may offer.

"We are studying European production," Panasonic's European Chief Executive Laurent Abadie told Reuters in an interview. "We have different interesting opportunities at the moment. Probably I will be able to give you more information in a few weeks."

"This year, yes, this is our target.

Abadie declined to tell Reuters which locations were under consideration, but said it would be a European Union country.

Panasonic - known for its Viera TVs and Lumix cameras - currently manufactures home appliances such as refrigerators and washing machines in China, Turkey and other parts of Asia.

The company concentrates on high-end appliances - for example, it uses aeronautics technology in its refrigerators that can cost up to $2,000, for better insulation and to save space.

It has just 0.5 percent of the European market for washers and fridges but aims to increase that proportion to 5 percent by 2018 as it bets on home appliances, solar panels and batteries to boost profits.

Panasonic reported a record annual loss earlier this month as sales slumped but has promised a return to profit this year under a turnaround plan and new president.

Panasonic estimates that total European demand for washing machines is about 18 million annually, and for refrigerators about 19 million.

Abadie said that producing home appliances close to the consumer was good not only for supply-chain management but also because of cultural differences that meant appliances were not global products in the way that, say, televisions were.

"The behavior of the consumer is very different country by country," he said. "Your kitchen and a German kitchen or the Italian kitchen are quite different. The way you manage the food, or prepare the food, is incredibly different."

He cited sushi compartments in Japanese fridges, space for cosmetics that would otherwise melt in fridges in other parts of Asia, or milk compartments in British fridges as examples.

"Panasonic has been very much a Japan-centric company in the past, that was our main market. Panasonic in Japan is a kind of institution," Abadie said. "The clear direction today is Panasonic is a global company.