Panasonic moves factory from Thailand to Vietnam

The factory in Thailand will stop producing washing machines in September and refrigerators in October. The plant will close in March 2021 and a nearby research and development center will also be closed.

 

About 800 employees currently working at the plant in Bangkok will be laid off, but will receive help in finding another similar job.

With the move to Vietnam, Panasonic sought to reduce costs through the consolidation of parts. The Vietnamese factory, located on the outskirts of Hanoi, is Southeast Asia's largest refrigerator and washing machine manufacturing hub and often reaches excess capacity.

The move also reflects a new phase in Southeast Asia's manufacturing. Starting in the 1970s, Japanese electronics manufacturers shifted domestic production to countries such as Singapore and Malaysia, as the yen rose rapidly due to the switch to a floating exchange rate, hurting Japan's price competitiveness.

After that, production gradually shifted to countries such as Thailand, as wages paid to workers in Singapore became too expensive. Now companies are looking for even cheaper locations, while also hoping to meet the huge potential demand for refrigerators, washing machines, and microwaves in densely populated countries in Southeast Asia. And everything gradually shifted to Indonesia, the Philippines and Vietnam.

Panasonic has been manufacturing major home appliances in Thailand since 1979.

Panasonic's total global production will not decrease as a result of this change.

Panasonic currently employs about 8,000 Vietnamese workers. In addition to large equipment, local factories also produce products such as televisions, cordless phones, card payment devices, and other industrial equipment.

Panasonic is in the process of restructuring, with a goal of cutting costs by about 100 billion yen ($930 million) by the fiscal year ending March 2022. They are considering further changes to the production of their equipment.

Last year, Sharp increased the production capacity of washing machines and refrigerators in Indonesia by 30% and 20%, respectively.

Source: Nikkei