Panasonic will close a large factory outside Bangkok - Thailand early this fall and move production to set up factory in Vietnam to get better production efficiency.
About 800 employees currently working at the factory in Bangkok will be laid off, but will also be recruited to new positions in the same business. By moving production to Vietnam, Panasonic will save a lot of costs.
Panasonic's factory in Vietnam is currently the largest refrigerator and washing machine manufacturing center in Southeast Asia, the plant's production capacity has now exceeded the required threshold.
This movement also reflects a new phase in manufacturing sector of Southeast Asia. Since the 1970s, Japanese electronics manufacturers have moved their production domestically to Singapore and Malaysia when the Yen increased rapidly because of the exchange rate floating policy that was applied for the first time and hurt the price competitiveness of Japanese goods. After that, production activities were transferred to countries like Thailand because of the increasing salary in Singapore.
Now, businesses are looking for cheaper places and also want to gain deeper access to markets where the demand for refrigerators, washing machines and microwaves is increasing in populous countries in Southeast Asia such as Indonesia, Philippines and Vietnam.
Panasonic has been producing home appliances in Thailand since 1979. The total output that Panasonic produces in Southeast Asia after the latest change will not diminish.
Panasonic currently employs about 8,000 workers in Vietnam. Not only producing large appliances, the local Panasonic factory also produces TVs, cordless phones, terminal card payment devices and industrial equipment.
Panasonic is currently in the process of restructuring with the goal of reducing costs by 100 billion yen or about 930 million USD in the fiscal year ending in March 2022. Panasonic is also considering continuing to adjust equipment manufacturing operations. Last year, Sharp also increased its capacity to produce washing machines and refrigerators in Indonesia by 30% and 20%, respectively.
Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.
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