Appliances’ Offshore Shift to Expand Japan Steel Export

Japanese steel makers concern domestic appliances makers could shift the production to offshore sites again while the steel buyers increase the consumption under stimulus package. The appliances makers try to follow growing developing countries while they reshuffle and integrate the domestic plants under higher yen rate. The domestic steel demand for appliances could decrease to less than 2 million tonnes while the demand kept more than 2 million tonnes from 2004 to 2007. Under the trend, Japanese steel makers’ export could increase more.

Panasonic shifted production of dishwasher from Mikuni plant in Osaka to Kusatsu plant in Shiga and compressor of vending machine from Fujisawa plant in Kanagawa to Kusatsu plant. The Kusatsu plant now makes around 70% of white goods including existing air conditioner and refrigerator. Toshiba also shifts the appliances production from Aichi plant to Chinese plant and the subsidiary, Toshiba Home Technology. Sharp integrates the large liquid crystal panel production into Sakai plant in Osaka and Kameyama plant in Mie and integrates the mid-sized liquid crystal panel production into Mie plant and Tenri plant in Nara while the firm shifts mid- and small-sized television production to Chinese plant.

The appliances makers shifted the plants to offshore sites after historical high yen in 1995. However, they returned some plants for high valued products when they tried to avoid technology information leakage in foreign countries.

Japanese steel demand for electric machinery decreased to less than 1.8 million tonnes in 1998, according to Japan Iron and Steel Federation while the demand was 2.3-2.4 million tonnes in mid-1990. The demand had increased since 2002 due to better economy. However, the demand could decrease again when the appliances makers try to shift the production to consuming regions including BRICs partly due to higher yen rate. A source said Sony’s steel consumption in Japan is only 5% of total consumption.