Panasonic to pour $1.37b into energy-efficient homes

Panasonic, the world's biggest maker of plasma televisions, will invest US$1 billion ($1.37 billion) by 2012 in a plan to make outfitting environmentally friendly "green" homes and buildings its core business, an executive said.

The plan focuses on solar-panel and energy-storage technology that Panasonic will acquire in its purchase of Sanyo Electric, coupled with home energy-management systems that Panasonic has invented, President Fumio Ohtsubo said.

The 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, 64, said.

"The future is not 20 to 30 years out. Within two to three years, Panasonic can realise this kind of concept."

He said consumers can achieve energy savings of 30 per cent to 50 per cent with the new technology.

The company hasn't determined how much the energy-management systems will cost or how they will be distributed, Ohtsubo said. It also doesn't know what percentage of its sales can come from the new business by the end of its current medium-term business plan in 2012, he said.

Panasonic is offering to buy control of Sanyo, the world's largest maker of rechargeable batteries, for 403 billion ($6.36 billion) to boost its share of the battery market and gain access to Sanyo's solar-cell technology.

The purchase would increase sales of energy-related electronics at Panasonic, the maker of Viera televisions, as the audiovisual-equipment market becomes increasingly saturated.

The company is also entering the market for lithium-ion batteries used in electric cars, Ohtsubo said.

Both plans were prompted by difficulties in generating enough growth in its existing consumer-electronics and appliances businesses.

Last week, Panasonic obtained conditional approval from the US Federal Trade Commission to purchase Osaka-based Sanyo. Panasonic's public offer of 131 per Sanyo share is scheduled to close on December 9.

Goldman Sachs and two banks that bailed out Sanyo in 2006 hold about 70 per cent of Sanyo's shares and have agreed to sell at least a 50 per cent stake to Panasonic.

Panasonic, which generated 47 per cent of its revenue overseas in the past fiscal year, said last year that it aims to raise that share to 60 per cent, mostly by boosting sales in emerging markets.

Panasonic is among Japanese companies that plan to start selling 3D televisions next year.

Sony said last month that 3D related products, excluding programming, will generate more than 1 trillion in sales in the year ending March 2013.

Toshiba also plans to introduce 3D TVs as early as 2010. The Japanese companies will compete against South Korea's Samsung and LG.

Sales of 3D TVs will likely reach 50 million units in 2012, presenting Japanese manufacturers including Sony with an opportunity to boost earnings, Morgan Stanley said last month.

Panasonic narrowed its full-year loss forecast in October by 28 per cent to 140 billion, citing cost reductions. The company, which also raised its operating profit forecast for the year to 120 billion from 75 billion, posted a net loss of 379 billion in the year ended March 31.

Panasonic, which cut 29,155 jobs in the 12 months ended September 30, probably will pare more than 300 billion in costs this fiscal year, compared with its original estimate of 260 billion, chief financial officer Makoto Uenoyama said.

Ohtsubo said yesterday that Panasonic will cut costs at Sanyo after the transaction closes, though he didn't say whether the moves would involve more job reductions.

- BLOOMBERG