Panasonic Malaysia's RM60m capex to upgrade plant

Panasonic Corporation Japan chief sales officer of air conditioner company Hiroshi Komatsubara and Panasonic Malaysian Sdn Bhd managing director Cheng Chee Chung at the launch of Panasonic New Elite Inverter Sky Series air conditioners at Sunway Pyramid Convention Centre.

KUALA LUMPUR: Panasonic Malaysia Sdn Bhd has allocated RM60 million in capital expenditure (capex) for the financial year 2016 (FY16) ending March 31, 2017 to upgrade its air conditioning manufacturing plant to cater to its product-line extensions. 

Its Managing Director, Cheng Chee Chung said the manufacturing plant, located in Shah Alam, is capable of producing about 3.1 million units of air conditioners for the local market as well as overseas markets of some 130 countries. 

"Panasonic is here to stay and has no plans to move out of Malaysia. 

"For the air conditioning plant, we plan to produce 24 new models from four series this year (FY16). Hence, we need to enhance the facility," he told a press conference after the launch of the Panasonic New Elite Inverter Sky Series here today. 

Cheng said the company was expected to close the FY15 ending March 31, 2016 with about RM1.6 billion in total group sales and the air conditioner segment was expected to contribute about RM450 million or 27 per cent of the total revenue. 

For FY15, the air conditioner segment is expected to register a double digit growth despite slowing demand due to headwinds, including rising cost of living and ringgit depreciation, which affected consumer spending. 

Cheng said the group eyed a five per cent growth in sales for FY16 and 36 per cent of Malaysia's air conditioner market share, thus it allocated RM9 million for advertising and promotion as well as RM11 million for consumer campaign. 

On the economic outlook, he said it would remain challenging this year even though it is expected to improve, but rising cost of living would continue to affect consumer spending, hence slowing demand for the company's products. 

As the rich are not much affected by the flagging economy, Cheng said the company would target this group by focusing on premium products like its newly-launched Sky Series. 

The innovative powerful inverter air conditioner uses radiant cooling technology, which applies "Coanda Effect" principle, to cool down spaces by removing heat from ceilings and walls. 

The price of the new series will be about 30 per cent higher than the normal inverter series as some parts are imported in US dollars, he added. - Bernama