Tokyo: Japan’s Sanyo Electric Co is pulling the plug on a loss-making joint venture in India producing cathode-ray tube televisions, a spokesman said Monday.
Sanyo closed a factory in Bangalore run jointly with Indian electronics company BPL last month and will shift the production to Indonesia, disbanding the joint venture by March next year.
“Because of the increasingly fierce competition, we don’t expect the business performance there to improve in the future,” said Sanyo spokesman Ryo Hagiwara, adding that cathode-ray tube TVs no longer meet the market’s demands.
Japanese electronics makers have been scaling down, or withdrawing from, production of the old-style box TVs in response to a consumer shift toward sleek new liquid crystal display or plasma televisions.
Sanyo has slashed thousands of jobs and sold non-core operations as part of a massive overhaul in recent years, while increasing its focus on rechargeable batteries and environment-friendly technology.
The company, which sells 90% of its televisions outside of Japan, said that it hopes to improve efficiency by reducing the number of overseas television production centres that it operates.
Sanyo, which now has overseas production bases Indonesia, China, Mexico and Britain, first teamed up with BPL in July 2004, hoping to expand its business in the fast-growing emerging economy.
The joint venture posted sales revenue of 4.5 billion yen ($40.89 million) for the fiscal year to March 2008, when it shipped about 400,000 televisions, but its bottom line still remained in the red.
The price of Sanyo Electric shares climbed 1.4% to end at 224 yen, while the benchmark Nikkei-225 index gained 1.68%.