Panasonic Boosts India Production With Haryana Plant

(Corrects story published May 1 to show company has no plans for Indian flat-panel production.)

Panasonic Corp. (6752) (6752), the Japanese manufacturer struggling to make its television business profitable, has the capacity to produce flat-panel TVs in India to fuel sales growth and meet local regulatory demands.

Japan’s No. 2 TV maker is building a factory in the northern state of Haryana which will have the capacity to make flat-screens although there are no current plans to start production, Panasonic President Kazuhiro Tsuga told reporters in Mumbai. The company plans to start making chips in India after 2015 to help feed a market that consumed $8 billion in semiconductors in 2012, a 7.4 percent increase over 2011 even as global chip-based revenue declined, according to Gartner Inc.

Tsuga is leaning on India and Brazil to help make Panasonic’s TV business profitable by March 2016, a target that’s two years behind that of larger rival Sony Corp (6758). India has received about 20 billion rupees ($372 million) in investment proposals for the electronics industry this year. It plans to approve bids to open the country’s first wafer manufacturing factories by May with production starting in 2014, Information Technology Minister Kapil Sibal said on April 22.

Photographer: Sajjad Hussain/AFP via Getty Images

An Indian employee works at the Panasonic 'eco ideas' factory at Jhajjar in Haryana on December 12, 2012. Close

An Indian employee works at the Panasonic 'eco ideas' factory at Jhajjar in Haryana on December 12, 2012.

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Photographer: Sajjad Hussain/AFP via Getty Images

An Indian employee works at the Panasonic 'eco ideas' factory at Jhajjar in Haryana on December 12, 2012.

“India is growing like most other developing countries where there are a lot of opportunities in consumer electronics and appliances,” Tsuga said. “Our philosophy has been to not simply import products from other countries,” he said, because items “should be specially customized for Indian consumers, keeping local needs in mind.”

Chip Appetite

India’s semiconductor consumption will reach $9.6 billion in 2013, according to Gartner. The country has already approved about 10 billion rupees of foreign investment in manufacturing of consumer electronics this year, and plans to add a total of 250 billion rupees by March 2014, J. Satyanarayana, secretary of India’s Department of Electronics and Information Technology, said in a phone interview.

Panasonic will expand manufacturing of other consumer electronics including air conditioners, washing machines and refrigerators, Tsuga said. The Osaka-based company will spend about $250 million on marketing in its push into India.

Panasonic had forecast a net loss of 765 billion yen in the 12 months ended March 31.

To contact the reporters on this story: Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net; Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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