Giant firm banks heavily on Africa

Panasonic marketing, Middle East and Africa, managing director Masao Motoki (Right). The firm is undertaking feasibility studies in Kenya to find out if it should set up an assembly plant for some of its appliances. PHOTO|SALATON NJAU.   NATION

In Summary

• The firm is also undertaking feasibility studies in Kenya to find out if it should set up an assembly plant for some of its appliances.
• The firm is planning to enhance its focus on faster revenue growth by targeting business clients.
• Other competitors keen to cash in on the Kenyan and African markets include Toshiba, Sony, Sharp, Canon and LG.
• In the full financial year period to March this year, the firm posted a Sh870 billion ($10 billion) loss amid struggling TV business.

By JOSHUA MASINDE
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Japanese electronics giant Panasonic projects that contributions from African market will help double its revenues in the next three years, as it eyes further expansion on the continent.

Projecting faster growth for its range of electronics and information communication technology products in Africa, Panasonic marketing, Middle East and Africa, managing director Masao Motoki said the firm is also undertaking feasibility studies in Kenya to find out if it should set up an assembly plant for some of its appliances.

“The share of revenue from this region is 15 per cent.

We seek to double that in three years,” Mr Motaki, who was speaking in Nairobi at a Panasonic Africa System Exhibition on Friday, said.

The electronics’ firm was showcasing its products — comprising telephones, faxes, office automation, educational systems, high definition communication systems, network and analogue products, home security products, batteries and lamps and air conditioners, among others.

The firm is planning to enhance its focus on faster revenue growth by targeting business clients.

It is also eyeing government tenders, away from the conventional focus on the consumer market.

Africa, emerging economic force

Panasonic’s Asia Pacific managing director Yorihisa Shiokawa said Africa is emerging as an economic force.

Coupled with widespread reforms that have led to improving business environment, increased infrastructure investment and commodities boom in Kenya and other countries, the continent’s economy has doubled over the past decade.

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“Panasonic is committed to being part of this development process that Kenya and other countries on the continent are witnessing.

This exhibition is one such effort to reiterate our commitment to African markets,” Mr Shiokawa said.

Already, its competitor, Korea’s Samsung, plans to set up an assembly line for television sets, printers and laptops in Nairobi as it seeks a firmer grip on local and regional markets.

Kenya is Panasonic’s second largest market, only second to the most populous nation on the continent, Nigeria, with air conditioners topping the bestseller list.

Tanzania and South Africa are other big markets for the firm on the continent.

Competitors

Other competitors keen to cash in on the Kenyan and African markets include Toshiba, Sony, Sharp, Canon and LG.

Electronics firms are increasingly turning their focus to the Kenyan market with plans to establish regional offices for Africa in Nairobi, or planning to set up assembly lines.

Recently, global cards manufacturer SanDisk announced long term plans to set up an assembly line in Kenya.

The focus on African has been tailored on four regions: North Africa, West Africa, Southern Africa and East Africa, but the firm intends to pursue individual country focus as it pursues market leadership on the continent that is being touted as one of the fastest growing.

“Panasonic is planning to expand aggressively in Africa in its drive to gain major in-roads in to the highly potential African market.

The company is looking to establish regional offices in most parts of the continent by the end of the year,” Mr Motoki noted.

The growing middle class, set to stand at over 300 million on the African continent has also become a major attraction for global firms seeking expanded markets, increased earnings and  faster growth on the continent.

We want to make our presence known more in Africa with a new growth and business expansion strategy on the continent,” Mr Shiokawa remarked.

Strong growth on the African continent is set to emanate from the projector, solar, television and air conditioner product categories.

In the full financial year period to March this year, the firm posted a Sh870 billion ($10 billion) loss amid struggling TV business.

Combined with that of its rivals, Sony and Sharp, the loss stood at Sh1.48 trillion ($17 billion) underlying the threat to their businesses from fierce rival, Samsung Electronics, amid weak demand for their products globally.