updated - November 11, 2019 Monday EST
Japan's Panasonic Corp said on Thursday it will close a lithium-ion battery factory in Beijing and axe 1,300 jobs there as demand for the product slides, competition increases and with better opportunities available in electronic car batteries.
Reuters said the closure of the 15-year old is due to shrinking global demand for lithium-ion batteries declines as devices that use these like simple mobile phone and digital cameras are replaced by smartphones. The wire agency added that the plant's primary customer was Finland's Nokia Corp., which had sold its mobile phone business to Microsoft Corp. in 2014
Reuters said Panasonic took over the business with the acquisition of Sanyo Electronics Co. in 2010, but the battery unit has met stiff competition from South Korean competitors. The Japan Times said Panasonic has two other battery factories in China.
The wire agency noted that the closure of the plant is part of Panasonic's restructuring meant to scale back on the tightly-competed consumer electronics segment and focus on electric car batteries and energy-saving home systems. The report added that the Japanese firm announced in June its plan to invest 60 billion yen until March in its automotive unit, including making lithium-ion batteries for Tesla Motors Inc.
Japan Times noted that Panasonic is aggressive in growing its electric vehicle battery business with plans to build a large factory with Tesla Motors in the United States. It added that the Osaka-based firm plans to grow sales for battery vehicles to 700 billion yen by 2018, expecting demand for electric vehicles to rise.
Reuters said Panasonic has committed to pay for up to 40 percent of the building cost of the $5 billion battery factory of Tesla Motors in Nevada
The wire agency said Panasonic's shares rose by 0.5 percent in afternoon trade, lower than the 1.6 percent rise of the Nikkei 225 average.
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