By Tim Mullaney and Mariko Yasu
(Bloomberg) — Panasonic Corp., the world's biggest plasma-TV maker, will invest $1 billion by 2012 in a plan to make its principal business equipping homes and buildings with solar power and energy-saving technologies, the president said.
The move focuses on solar-panel and energy-storage technology that Panasonic will gain from its purchase of Sanyo Electric Co., coupled with systems that Panasonic has invented, President Fumio Ohtsubo said yesterday in a New York interview.
Panasonic is shifting focus as growth slows in its main consumer-electronics and appliances businesses, where it competes against Samsung Electronics Co. The change coincides with a worldwide move toward more energy-efficient technologies, a goal that's leading more than 190 countries to meet in Copenhagen next week to discuss cutting greenhouse-gas emissions.
"This is what Panasonic has to do," said Osamu Hirose, an analyst at Tokai Tokyo Securities with an "above average" rating on the stock. "Wherever you look, consumers in developed and developing markets are interested in environmental products."
The company hasn't determined how much the energy- management systems will cost or how they will be distributed, Ohtsubo, 64, said. The Osaka, Japan-based company also doesn't know what percentage of its overall sales can come from the new business by the end of its current medium-term business plan in 2012, he said.
"Our growth is not enough compared to Samsung," Ohtsubo said. "So we want to change our fighting ring from our current categories to a different field."
The new technology will let consumers monitor their own electricity use and display the data on television sets, Ohtsubo said. The system will be able to connect and monitor all of the appliances in a house, and the solar panels may produce enough clean power to offset any carbon dioxide created from other power the appliances use, he said.
"Our products in consumer electronics and our appliances will benefit from the new core business" as people buy more energy-efficient gear, Ohtsubo said. "The future is not 20 to 30 years out. Within two to three years, Panasonic can realize this kind of concept."
He said consumers can achieve energy savings of 30 percent to 50 percent with the new technology.
Panasonic rose 1.9 percent to close at 1,156 yen on the Tokyo Stock Exchange, compared with a 0.4 percent decline by the benchmark Nikkei 225 Stock Average. The company's stock has advanced 3.9 percent this year.
The new plan is a departure from focusing on selling plasma TVs, which are less energy-efficient than other television models.
Most of Panasonic's plasma TVs with 42-inch screens that display full high-definition images consume at least 173 watts, higher than the 146 watts used by comparable LCD TVs, according to the U.S. Environmental Protection Agency's Energy Star TV product list.
Panasonic is offering to buy control of Sanyo, the world's largest maker of rechargeable batteries, for 403 billion yen ($4.6 billion) to boost its share of the battery market and gain access to Sanyo's solar-cell technology.
The company also is entering the market for lithium-ion batteries used in electric cars, Ohtsubo said.
Panasonic, which generated 47 percent of its revenue overseas in the past fiscal year, said last year that it aims to raise that share to 60 percent, mostly by boosting sales in emerging markets.
Panasonic narrowed its full-year loss forecast in October by 28 percent to 140 billion yen, citing cost reductions. The company, which also raised its operating profit forecast for the year to 120 billion yen from 75 billion yen, posted a net loss of 379 billion yen in the year ended March 31.
The company, which cut 29,155 jobs in the 12 months ended Sept. 30, may pare more than 300 billion yen in costs this fiscal year, compared with its original estimate of 260 billion yen, Chief Financial Officer Makoto Uenoyama said Oct. 30.
Ohtsubo said that Panasonic will cut costs at Sanyo after the transaction closes, though he didn't say whether the moves would involve more job reductions.
Samsung, the Suwon, South Korea-based company that's Asia's biggest maker of chips, flat screens and mobile phones, said third-quarter profit tripled to a record 3.72 trillion won ($3.2 billion) on rising demand for consumer electronics and appliances.
To contact the reporters on this story: Tim Mullaney in New York at email@example.com; Mariko Yasu in Tokyo at firstname.lastname@example.org.
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