Panasonic moves procurement operations to China

5 May 2011

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5 May 2011 | Angeline Albert

Panasonic is to transfer its global purchasing head office from Japan to China as part of a company restructure.

The procurement head office, as well as logistics and some of the manufacturing innovation department, will move to the country and become part of a new global manufacturing division.

The worldwide reorganisation was announced by Panasonic president Fumio Ohtsubo, as part of the group’s business plan for the upcoming financial year. In a statement the company said it was shifting production to China to increase the competitiveness of the company’s lithium-ion battery business, and would “seek to optimise procurement on a global level”.

The electronics manufacturer also said it planned to review where there was overlap between company operations and consider consolidating or selling them, in addition to consolidating head offices.

Panasonic said it wants to improve its production capability “by developing strong manufacturing bases, boosting local procurement and strategically making use of outside sources”.

The company plans to invest ¥55 billion (£417.5 million) in China by 2013, including the construction of a new factory in Suzhou for battery packs. It also plans to step up development of smart phones and will build up its circuit board business by investing in increased production capacity at factories outside Japan.

Operations affected by the recent natural disasters in Japan are recovering, but the company said it was still suffering supply chain disruption. It added it was taking measures to prepare for future risks.

In the year to March the company recorded sales of ¥8.69 trillion (£65.8 billion).

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