Panasonic to close Shanghai dry cell factory to invest in Central and South America and Southeast Asia

Panasonic, a major Japanese home appliance manufacturer, is closing its dry cell factory in Shanghai, its only dry cell factory on the mainland.

Panasonic will close its dry cell factory in Shanghai, the only dry cell factory in mainland China, and will focus on investing in Central and South America and Southeast Asia in the future.

The Nihon Keizai Shimbun Chinese website reported on April 29 that Panasonic will liquidate the local corporation in Shanghai in 2022 and the factory site will be returned to the Chinese government. The impact of closing the Shanghai plant on Panasonic’s performance is considered to be relatively minor.

The report said that Panasonic is facing fierce competition from local battery makers in China, so it will focus its investment in Central and South America and Southeast Asia.

Panasonic will expand its plant in Costa Rica, Central America as early as 2022 with an investment of about US$10 million, centering on No. 5 and No. 7 batteries, doubling its production capacity of manganese batteries from the current level, and supplying its products to neighboring countries such as Mexico, Colombia and Argentina.

The Shanghai plant is Panasonic’s only dry cell factory on the mainland, producing manganese batteries for the mainland, North America and Japan. In the future, batteries sold by Panasonic on the mainland will be imported from factories in Thailand and Indonesia; some production lines for North America and other places will be transferred to the Central American factory.

Panasonic’s dry cell business has factories in about ten locations around the world, with a global market share second only to Duracell and Rimula in the U.S., and a profit margin of about 10%.

Also in the electric vehicle battery business, Panasonic is a long-time partner of Tesla and was one of Tesla’s early electric vehicle battery suppliers. on December 29, 2020, Panasonic and Tesla signed a pricing agreement for 2021, under which Panasonic will provide Tesla with battery cells manufactured in Japan.

Previously, Panasonic has long supplied Tesla with Japanese-made battery cells for use in Tesla’s Model S and Model X models. Recently Panasonic revealed that they are producing a new battery cell for Tesla that has better performance.

Panasonic has been producing and operating on the mainland for many years, but in recent years it has been closing down its mainland factories for its major operations one after another. For example, in late 2012, its Shanghai plasma TV assembly plant ceased production and subsequently closed; in 2018 there was news that Panasonic would close its surveillance products plant in Suzhou; and in July 2020 Panasonic terminated its partnership with mainland solar cell maker Junshi Energy.

In addition, Panasonic and a mainland company are currently in the midst of an intellectual property dispute. 2020 On August 31, Panasonic and Japan Display (JDI) formally sued Shenzhen Tianma Microelectronics Co. in the U.S., alleging that the company infringes nine patents jointly owned by Panasonic and JDI, as well as six patents owned by JDI itself.