Wednesday, December 2, 2009

Panasonic Will Invest $1 Billion in ‘Green Home’ Plan by 2012

Bloomberg/Tim Mullaney and Mariko Yasu

Panasonic Corp., the world’s biggest maker of plasma televisions, will invest $1 billion by 2012 in a plan to make outfitting environmentally friendly “green” homes and buildings its new core business, an executive said.

The plan focuses on solar-panel and energy-storage technology that Panasonic will acquire in its purchase of Sanyo Electric Co., coupled with home energy-management systems that Panasonic has invented, President Fumio Ohtsubo said yesterday in an interview in New York.

The technology will let consumers monitor their own electricity use and display the data on television sets, Ohtsubo said. The system will be able to connect and monitor all of the appliances in a house, and the solar panels may produce enough clean power to offset any carbon dioxide created from other power the appliances use, he said.

“Our products in consumer electronics and our appliances will benefit from the new core business” as people buy more energy-efficient gear, Ohtsubo, 64, said. “The future is not 20 to 30 years out. Within two to three years, Panasonic can realize this kind of concept.”

He said consumers can achieve energy savings of 30 percent to 50 percent with the new technology.

The company hasn’t determined how much the energy- management systems will cost or how they will be distributed, Ohtsubo said. The Osaka, Japan-based company also doesn’t know what percentage of its overall sales can come from the new business by the end of its current medium-term business plan in 2012, he said.

Sanyo Purchase

Panasonic is offering to buy control of Sanyo, the world’s largest maker of rechargeable batteries, for 403 billion yen ($4.6 billion) to boost its share of the battery market and gain access to Sanyo’s solar-cell technology. The purchase would increase sales of energy-related electronics at Panasonic, the maker of Viera televisions, as the audiovisual-equipment market becomes increasingly saturated.

The company also is entering the market for lithium-ion batteries used in electric cars, Ohtsubo said.

Both plans were prompted by difficulties in generating enough growth in its existing consumer-electronics and appliances businesses, where it competes with Samsung Electronics Co.

“Our growth is not enough compared to Samsung,” Ohtsubo said. “So we want to change our fighting ring from our current categories to a different field.”

FTC Approval

Last week, Panasonic obtained conditional approval from the U.S. Federal Trade Commission to purchase Osaka-based Sanyo. Panasonic’s public offer of 131 yen per Sanyo share is scheduled to close on Dec. 9.

Goldman Sachs Group Inc. and two banks that bailed out Sanyo in 2006 hold about 70 percent of Sanyo’s shares and have agreed to sell at least a 50 percent stake to Panasonic.

Panasonic, which generated 47 percent of its revenue overseas in the past fiscal year, said last year that it aims to raise that share to 60 percent, mostly by boosting sales in emerging markets.

Panasonic is among Japanese companies that plan to start selling 3-D televisions next year. Sony Corp., the maker of Bravia TVs and PlayStation 3 game consoles, said last month that 3-D related products, excluding programming, will generate more than 1 trillion yen in sales in the year ending March 2013. Tokyo-based Toshiba Corp. also plans to introduce 3-D TVs as early as 2010. The Japanese companies will compete against South Korea’s Samsung Electronics Co. and LG Electronics Inc.

3-D Television

Sales of 3-D TVs will likely reach 50 million units in 2012, presenting Japanese manufacturers including Sony with an opportunity to boost earnings, Morgan Stanley said last month.

“That would be quite difficult,” Yoshi Yamada, chief executive officer of Panasonic Corp. of North America, said in yesterday’s interview.

Panasonic narrowed its full-year loss forecast in October by 28 percent to 140 billion yen, citing cost reductions. The company, which also raised its operating profit forecast for the year to 120 billion yen from 75 billion yen, posted a net loss of 379 billion yen in the year ended March 31.

Panasonic, which cut 29,155 jobs in the 12 months ended Sept. 30, probably will pare more than 300 billion yen in costs this fiscal year, compared with its original estimate of 260 billion yen, Chief Financial Officer Makoto Uenoyama said on Oct. 30.

Ohtsubo said today that Panasonic will cut costs at Sanyo after the transaction closes, though he didn’t say whether the moves would involve more job reductions.

To contact the reporters on this story: Tim Mullaney in New York at; Mariko Yasu in Tokyo at

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