Panasonic to build lithium-ion battery factory in China

Panasonic Corp. (NYSE:PC) group plans to overhaul its production structure to boost lithium ion battery production. Panasonic Corp. said it will build a factory in Suzhou, China, around 2012 to manufacture lithium-ion batteries for use in cell phones and other mobile devices. Panasonic will invest 20 billion-30 billion yen ($244 million-$366 million) by the end of 2012 to build a new plant in China and to upgrade facilities, the Nikkei said without citing a source.

Japanese makers led by Panasonic are battling South Korean makers such as LG Chem and Samsung SDI to win the biggest share of the market for lithium batteries used to power computers, mobile phones, hybrids and electric vehicles.

Under the plan, it aims to cut manufacturing costs by 30 percent while boosting its share of output for the batteries in China to 50 percent by 2015, the Nikkei said. It currently makes 80-90 percent of its lithium ion batteries in Japan, and the rest in China.

Panasonic plans to triple sales of the batteries, including those for cars, to 1 trillion yen by that time compared with levels in fiscal 2009/10, the Nikkei said.

Panasonic and its wholly owned subsidiary Sanyo Electric Co have a combined share of about 26 percent of the global market for lithium ion cells, according to research firm Techno Systems Research. It will also create a battery manufacturing facility at the existing Beijing factory of its Sanyo Electric Co. unit.

While the consumer electronics maker currently produces 80 to 90 percent of its lithium-ion batteries in Japan, it aims to boost the production ratio in China to 50 percent to avoid currency exchange risks and curb manufacturing costs, it said.