Monday, September 30, 2013
DJ: Toshiba To Consolidate 3 Overseas TV Plants Into 1 By March 2014
TOKYO--Toshiba Corp. (6502) said Monday it will consolidate its TV output overseas by shutting down two of its three production bases by March 2014, an indication of how stiff competition is prompting the company to go ahead with structural reform of its loss-making TV operations.
The Japanese technology conglomerate currently operates its own plants overseas in Indonesia, China and Poland. While it plans to keep operations intact at one of the three plants, the company said it has not made a final decision on which one will remain in operation.
The consolidation will eventually halve the number of global workers at its TV operations to 3,000. The company also said it will scale down the fixed costs of its TV business by Y20 billion over the two year period to March 2015, compared with the level in fiscal year 2012.
At the same time, it will increase the outsourcing of its worldwide TV output to 70% by the end of the same period from the current ratio of about 40%.
Toshiba has already shifted its TV production overseas due to the yen's strength and halted TV output in Japan.
Weighed down by fierce competition, the company's TV business has been in the red in recent years. It suffered an operating loss of Y50 billion in the year ended March 2013.
In July, the company said it aims to increase the proportion of TV sales in emerging markets to 40% of its overall TV sales in the current business year ending March 2014, compared with a ratio of about 30% in the last fiscal year.