Panasonic Says LCD Business Is Strategic, Doesn’t Plan Disposals

Panasonic Corp. (6752) plans to keep its liquid-crystal display business even after rivals Sony Corp., Toshiba Corp. (6502) andHitachi Ltd. (6501) this week agreed to divest their LCD units amid intensifying competition from South Korean and Taiwanese producers.

LCD is a “tough business but it’s a strategic business,” Panasonic’s head of European operations, Laurent Abadie, said in an interview today in Berlin. Panasonic, based in 

Panasonic, which posted its first annual profit in three years last year, in April announced fresh job cuts as it tries to transform itself into a leader of products such as solar panels and rechargeable batteries as competition in TVs stiffens. The maker of Viera TV and Lumix cameras spent more than $6 billion purchasing stakes in Sanyo Electric Co. and Panasonic Electric Works Co. last year to boost its energy- related businesses.

The company, which in June said full-year profit will drop 59 percent, hurt by the 

Panasonic has no plans for further solar panels acquisitions, Abadie said at the IFA consumer electronics fair. “We’ll have to study on a case by case basis. Give us some time to digest Sanyo,” he said.

Overlaps

The Sanyo acquisition also resulted in some overlaps and Panasonic agreed to sell Sanyo’s washing machine and fridge unit in July. Abadie said there are no plans for further disposals.

The LCD deal among Sony, Toshiba and Hitachi may create the world’s biggest maker of LCDs for mobile phones and cameras as Japanese companies struggle to compete against Korea’s Samsung Electronics Co. and Taiwan’s Chimei Innolux Corp. (3481) in the larger market for TV displays. Sony and Hitachi are unprofitable in LCDs, while Toshiba ended losses at its display unit last fiscal year.

“We have made investments in LCD production to make our own production efficient and ready for future growth, which is not the case with some of the other companies,” Abadie said.