HindustanTimes.com Toshiba says plans new plant in China
Reuters Tokyo, April 11 Electronics conglomerate Toshiba Corp said on Thursday it was considering building a new production plant in Shanghai, aiming at cutting costs as well as boosting sales in the fast-growing China market. The Daily Yomiuri newspaper quoted company sources as saying Toshiba planned to slash costs by building a major industrial plant in Shanghai, becoming the first Japanese firm independently to build a large complex in China. "The facility is expected to include both production and sales functions," a spokeswoman for Japan's largest chipmaker said. "There has been no decision on the location, schedule, function or size of the facility." "There is no decision on land acquisition, ownership ratio, products or other details," she added. Hit by a decade-long economic slump, tough competition and high costs, Japanese firms have been rapidly increasing their investment in China, where wages and other costs are a fraction of those at home. While several major Japanese firms have entered into joint ventures with local companies in China, Toshiba would be the first to go it alone on such a large project, the newspaper report said. Toshiba shares were boosted more than two percent by the report, but had settled back to 546 yen by the midday break, a gain of 1.87 percent. They modestly outperformed a 1.12 percent rise in the Tokyo Stock Exchange's electrical machinery index. The report said the technology giant aimed to build the plant in a suburb of Shanghai to manufacture Toshiba-brand products such as personal computers. Toshiba President Tadashi Okamura will visit China next month at the earliest to set up a local subsidiary fully financed by Toshiba that will manage the new plant, the report said. Toshiba planned initial investment of several tens of billion of yen and would aim to start building the plant by end of this year, it said. A survey released over the weekend by the Nihon Keizai Shimbun newspaper showed that 44 percent of companies responding listed China as their top priority for overseas investment, more than double the United States, which ranked second. "China's entry into the WTO (World Trade Organisation) has made it easier to carry out operations," the Toshiba spokeswoman said. "In addition to a production base, we are looking at China as a major market." The report quoted the sources as saying Toshiba aimed to cut production costs drastically with the new plant, countering the recent success of electronic contract manufacturers, which make products as low cost on behalf of other firms. Toshiba would gradually transfer production facilities currently in operation in Japan, Europe, the United States and the Philippines to the new complex, it said. Send your feedback at [EMAIL PROTECTED] ©Hindustan Times Ltd. 1997. Reproduction in any form is prohibited without prior permission.
