Mon, May 12, 2003 - Page 10 News List

Japanese factories closing, report says

BLOOMBERG , TOKYO

The number of Japanese factories closed or suspended increased by a 10th in the fiscal year ended March 31 as more companies shift production to China and elsewhere to lower costs, the Nihon Keizai newspaper said.

The number of closures or suspensions of plants rose to 161 in the year ended March 31 from 146 during the previous year, the paper said, citing its survey of companies listed on the Tokyo Stock Exchange and other exchanges.

Basic materials-related companies were the biggest group among 77 companies that closed or suspended factories in the period, accounting for 34 percent of the total, the report said.

The number of factory closures or suspensions by makers of electronics, food and pharmaceuticals jumped significantly in the year ended March 31 from the previous year, while the figure for automakers dropped, the report said.

Yokogawa Electric Corp, a Japanese maker of measuring and control equipment, plans to begin production in China and South Korea, reducing the number of domestic factories to four by March 31 from a total of 19 in the second half of the previous fiscal year, the report said.

The company aims to raise the proportion of its overseas production to 50 percent by the end of 2005 from the current 10 percent, the paper said.

Meanwhile, NEC will strengthen overseas system development services on rising corporate demand for cost-saving computer networks, the Nihon Keizai newspaper said, without citing anyone.

NEC will increase its workforce mainly in Asia, seen to become the world's fastest growing market, with the introduction of the new AsAmA server next month, the report said. The company says AsAmA offers the same or better performance-per-value compared with a mainframe computer by its bigger rival International Business Machines Corp (IBM), the report said.

The company will hire 300 more workers to total 700 in two years at its NEC Solutions Asia Pacific unit, which was set up in Singapore last month, to double annual sales at the unit to Japanese Yen 20 billion (US$170 million), the report said.

In China, where NEC will merge its operations in Beijing, Hong Kong and Shanghai, the company aims to double annual sales to Japanese Yen 200 billion by the year ending March 2005 by increasing the number of marketing and system engineers by twofold to 2,000, the report said.

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