Sharp Corp, Japan’s largest maker of liquid-crystal-display (LCD) televisions, is considering an alliance with companies or government bodies to help boost its panel business in emerging markets.
“Sharp is looking at growth for its LCD business in China, Russia, eastern Europe, Latin America, the Middle East and Africa,” president Mikio Katayama told reporters in Tokyo yesterday.
“There’s no infrastructure set up in these areas, making it difficult to expand on our own, so we plan to try to grow our business through an alliance with a company or government,” he said without elaborating.
Osaka-based Sharp is in talks with a partner in China to start producing LCDs in the world’s fastest-growing major economy, Katayama said without disclosing details.
The maker of Aquos-brand TVs is forecasting that sales in China will grow 3.5 percent to ¥422 billion (US$4.36 billion) in the year to March 2010, while projecting sales in Japan will drop 0.2 percent. Sharp in April also forecast a decline for sales in Europe and in the US this year.
Sharp is planning to transfer to China an older part of its plant in Kameyama City, Mie prefecture, in central Japan, Katayama said.
“If we move it to China, we’ll keep it as up-to-date as our newest facilities, materials and processes to maintain the quality level of our panels,” he said.
A transfer of production base was necessary to avoid currency risks and long-distance distribution, which contributed to Sharp’s loss last fiscal year, he said.
Sharp is forecasting a return to profit this year on narrowing losses at the LCD unit. Net income will probably total ¥3 billion in the year to March 31, compared with a net loss of ¥125.8 billion in the last fiscal year.
Katayama pledged to cut ¥200 billion in costs this year by reducing executive salaries, eliminating 1,500 temporary positions and scaling back advertising and travel. Sharp will also close old LCD lines that make small panels for computers and mobile phones.
Sharp would probably beat its sales forecast of 1.2 million units for LCD TVs in China in the year ending March 31, Katayama said. Sharp sold 1.04 million units in the nation in the previous year.
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