Aiwa plans more Asia manufacturing sites

Aiwa plans more Asia manufacturing sites

SINGAPORE (Reuter): Consumer electronics giant Aiwa, a unit of
Sony Corp, plans more production plants in Asia and is targeting
more than US$3 billion in group sales for the fiscal year ending
March 31, 1998, Aiwa's president said yesterday.

"Aiwa plans to add more plants in Indonesia and also expand
the operations of original equipment manufactures (OEMs) in the
Philippines, Thailand as well China," Yoshio Ishigaki told a news
briefing, declining to give the investment budget.

"During the current term, we are planning to manufacture
products valued at about US$3 billion," he said, adding the
company intended to expand into other audio and video related
fields, including computer-related products.

He was in Singapore to attend the Aiwa International Sales
Conference and introduce the company's new products.

Aiwa is expected to report consolidated sales of 310 billion
yen and consolidated net profit of 5.4 billion yen for fiscal
year 1996. It will officially announce its 1996 results early in
May.

Ishigaki said that despite the weaker yen and poor Japanese
business climate, Aiwa's 1996 performance surpassed expectations
due to healthy sales in the United States, the United Kingdom and
Latin America.

The company plans to make a niche in high-end products like
MiniDisc, which currently accounted for less than two percent of
the four trillion yen global audio market sales.

Sales from its visual products, such as Home Theater systems,
were expected to make up at least 20-to-30 percent of its entire
audio business, Ishigaki said.

Aiwa has production facilities in Japan, Singapore, Malaysia
and the United Kingdom, and more than 20 OEM partners in Asia.

OEMs now contribute 40 percent of the group's total output,
and Ishigaki said this was expected to rise to about 45 percent
in its 1998 fiscal year and to about 50 percent in the not too
distant future.

As part of its strategy to move production into low-cost
countries, Aiwa's Singapore office will assume a more managerial
role. It will oversee product distribution and support the
group's regional expansion, Ishigaki said.

As a result, production contribution from Singapore will fall
from its peak of about 10 percent of the group's total output to
about five percent.

Ishigaki said that despite the intense competition in both the
Japanese and Singaporean consumer products markets, Aiwa had no
plans to shut down production lines entirely.

Singapore and Japan would still produce higher-end products,
like MiniDisc and Digital Video Disc, he said. They would also
serve as supporting centers for other production bases.