SecurityWorldMarket

19/03/2018

Panasonic may sell security camera factory in China

Tokyo, Japan

According to latest reports from Nikkei Asia and Reuters, in a move to cut costs, Panasonic is looking to sell its security camera manufacturing business in Suzhou, a city in southeast China’s Jiangsu province, for over 50 billion Yen, or approximately 470 million US dollars.

Information cited by Nikkei says that with 40% of the market share, Panasonic appears to control its home market, but the company's global share is very small in comparison with its Chinese rivals that dominate internationally. Hence the cost cutting exercise which may result in Panasonic procuring its cameras from other sources, which may include the buyer of the factory that is the subject of the potential sale.

The Nikkei report also said that Panasonic Group's security camera operation is positioned within an internal company dedicated to corporate systems. Their report suggests that Panasonic is planning to raise that company's operating margin by shifting from hardware to software, such as facial recognition technology.

The report states that the Japanese manufacturer has already contacted investment funds and other potential buyers and speculates that candidates for the purchase may include U.S. equity fund Carlyle Group and British funds Permira and CVC Capital Partners.

Although the Nikkei report does not cite any particular source for its information, Reuters says that Carlyle and CVC were unavailable for comment and that Permira did not want to comment. Reuters also confirmed, that after contacting a spokesperson from Panasonic they were able to report that “the firm was considering various options to strengthen its security systems business, but that nothing has been decided.”

Both agencies suggest that Panasonic wants to close first-round bidding on the sale in early April, but that any discussions could be terminated if the company’s target price is not met.


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