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Sharp plans to halt domestic production of major appliances

Kyodo, Staff Report

Sharp Corp. plans to pull out from domestic production of major appliances and shift to overseas manufacturing as part of streamlining efforts under Taiwanese parent Hon Hai Precision Industry Co., a source said Friday.

With the move, the Osaka Prefecture-based company will draw the curtain on its decades of manufacturing of those products at two plants, one in Osaka and the other in Tochigi. Instead, Sharp’s domestic facilities will concentrate on high-value electronic components, the source said.

Sharp will cease production of refrigerators at its Yao plant in Osaka Prefecture, which began operations in 1959, in the business year through March 2020, the source said.

The Yao plant, which started out as a production center for washing machines, has served as the company’s major hub for major appliances. Although it used to make microwaves and air conditioners as well, the plant now only manufactures refrigerators.

Sharp will also end production of LCD televisions at its Tochigi plant in Yaita, Tochigi Prefecture, by next March, pulling the plug on the facility’s 50 years of TV production, the source said.

No job cuts are planned, however, as employees will be reassigned elsewhere, the source said.

The latest move will leave the company’s Kameyama plant in Kameyama, Mie Prefecture, as the firm’s only remaining TV factory in Japan.

Sharp, which is undergoing restructuring under President Tai Jeng-wu, has determined that production of major appliances should be moved to other parts of Asia, where growth is expected, the source said.

Sharp’s business streamlining under Hon Hai has borne some fruit.

The company said Tuesday its group net profit in the April to June period rose 32.6 percent from a year earlier to ¥19.2 billion ($172 million) as cost-cutting efforts paid off in its display business.

Group operating profit in the first quarter of fiscal 2018 surged 45 percent to ¥24.8 billion on sales of ¥533.86 billion, up 5.4 percent.

Its cost-cutting measures as well as a sales increase helped offset a decline in product prices.

In the year that ended in March 2016, Sharp fell into negative net worth and was demoted from the Tokyo Stock Exchange’s first section to the second section in August the same year.