Panasonic & Toshiba Restructuring its Business in Indonesia
Intense competition in the electronics industry forced the management of Panasonic and Toshiba to restructure their businesses in Indonesia. Panasonic closed one factory (located in Cikarang, West Java) and merged two local units. Meanwhile, Toshiba sold its television and twin-tub washing machine manufacturing plant - also located in Cikarang - to China's Skyworth Group, one of the largest television sets producers in China (with the Coocaa brand) and listed on the stock exchange in Hong Kong.
Rachmat Gobel, President Commissioner of the Panasonic Gobel Group (the local unit of Japan-based Panasonic Corporation), said the group needs to restructure its business in order to strengthen its business model. Amid weakening demand for the energy efficient compact fluorescent lamp (CFL) and growing global demand for light emitting diode (LED), the group decided to close its CFL lighting manufacturing plant in Cikarang (West Java), while it has merged two local units - in Pasuruan (East Java) and Cileungsi (West Java) - into one entity.
In the new situation two units - Panasonic Lighting Indonesia and Panasonic Gobel Eco Solution Manufacturing Indonesia - have been merged into one entity: Panasonic Gobel Eco Solution. From now on this unit will focus on the production of LED lighting in the two remaining plants: Pasuruan and Cileungsi. The group has moved away from the manufacturing of CFL lighting and therefore the plant in Cikarang has been closed. The workers have been given the choice to move to another Panasonic unit or resign.
Meanwhile, Toshiba's local unit in Indonesia - Toshiba Consumer Products Indonesia - also engaged in restructuring in an effort to raise competitiveness. In this context it sold its Cikarang factory to the Skyworth Group. Toshiba said the factory is currently still producing television sets with the Toshiba brand (as the takeover also gives Skyworth the license to use the Toshiba brand name throughout Asia, excluding China). The Skyworth Group entered Indonesia's electronics market in 2011 with the establishment of Skyworth Indonesia.
The restructuring of both Panasonic and Toshiba is estimated to cause a total of 2,500 layoffs.