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Matsushita Breaks Ground at New Industrial Park in China

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Osaka, Japan -- Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand products, today announced it will build a new 270,000 square-meter industrial park in the Hangzhou Economic & Technological Development Area (Xia Sha), Zhejiang Province. The industrial park initiative will strategically position the Hangzhou area as the production hub of its Home Appliances Group in China. Senior officials from Zhejiang Province and Hangzhou City will oversee the ground-breaking ceremony for the Matsushita Hangzhou Industrial Park today on the site.

The company will build two factories in the new industrial park: Panasonic Home Appliances (Hangzhou) Co., Ltd. will manufacture air conditioning compressors and electronic home appliances while Panasonic Home Appliances (Hangzhou) Precision Machining Co., Ltd. will produce compressor components with precision-processing technology. Both companies were locally incorporated on September 29 and April 28, 2004, respectively. Matsushita plans to relocate Panasonic Home Appliances Washing Machine (Hangzhou) Co., Ltd., now operating in Hangzhou City, to the Park, developing the company into a leading washing machine factory in the world by lifting its annual production capacity to 2.5 million units in the short haul.

The total investment will be 1.9 billion yuan (about 27 billion yen) ¹. The factories will be in operation by October 2005.

With the efficient industrial infrastructure and human resources, Matsushita focuses on Hangzhou area as the key to the future growth of its home appliances business in China. The area hosts many of the Home Appliances Group's production bases for gas cookers, rice cookers and vacuum cleaners among others. To respond to China's growing market, Matsushita will continue to build and expand new and existing facilities in the area. Panasonic Home Appliances (Hangzhou) (Export Processing Zone) Co., Ltd., located in the Hangzhou Export Processing Zone, will reinforce the company's global supply site as it starts producing vacuum cleaners for Europe. The company will also look into the possible establishment of a product development center in the site.

Matsushita is expanding its business in China as it considers the market a growth engine for its home appliances business around the world. In Japan, the company has been winning customers' support by developing ecology and environment-sensitive products and proposing new lifestyles. Making Hangzhou area the core of its home appliances operation in China, Matsushita will develop products for China based on the same corporate commitment to the environment. Matsushita is also committed to providing superior value-added quality products that are designed to integrate appropriately into Chinese culture and daily life.

The Home Appliances Group, headquartered in Toyonaka City, Osaka, is comprised of the four companies: Matsushita Home Appliances Company, Matsushita Refrigeration Company, Matsushita Housing Equipment & Systems Corporation, and Matsushita Food Service System Company.

Outline of the New Companies:
 
Panasonic Home Appliances (Hangzhou) Co., Ltd.

President:	Kazuhiko Kuroki
Location:	Xia Sha, Hangzhou Economic & Technological Development Area, Zhejiang Province
Capital:	760 million yuan (10.7 billion yen) 1
Equity:	100 % owned by Matsushita Electric (China) Co., Ltd.
Foundation:	September 29, 2004
Operations:	Manufacturing and marketing of electric home appliances and air conditioning compressors

Panasonic Home Appliances (Hangzhou) Precision Machining Co. Ltd.

President:	Kazuhiko Kuroki
Location:	Xia Sha, Hangzhou Economic & Technological Development Area, Zhejiang Province
Capital:	200 million yuan (2.8 billion yen) 1
Equity:	100% owned by Matsushita Electric (China) Co., Ltd.
Foundation:	April 28, 2004
Operations:	Precision processing of components for air conditioning compressors
Production:	Scheduled to commence in October 2005 (for the two companies)
Production volume2:	1.8 billion yuan (26 billion yen1, for 2006)
Number of employees2:	2,600 (for 2006)
Lot area2:	146,000 square meters
Floor space2:	53,000 square meters

¹ Exchange rate: 1 yuan = 14.1 yen
² Combined figures for the two companies

 

<Reference>

The Home Appliances Group Companies in Hangzhou Area Now

Company	Location	Main Products	Capacity (projected for 2006)
Panasonic Home Appliances   Washing Machine (Hangzhou)   Co., Ltd.   (PHAWMH)   (Hangzhou Matsushita Home   Appliance Co., Ltd.)	93, Chang Ban Xiang, Gong Shu   District, Hangzhou, Zhejiang (To be moved to Xia Sha, Hangzhou Economic & Technological   Development Area)	Fully automatic washers, twin-tub washers	2.5 million
Panasonic Home Appliances Rice Cooker (Hangzhou) Co.   Ltd. (PHARCH) (Hangzhou  Matsushita Kitchen Appliances  Co., Ltd.)	Avenue 3, Hangzhou Economic & Technological Development Area	Rice cookers and warmers	2 million
Panasonic Home Appliances &  System (Hangzhou) Co.,  Ltd.(PHASH) (Hangzhou  Matsushita Home Appliances &  System Co., Ltd.)	19 Avenue 3, Hangzhou Economic & Technological Development Area	Gas cookers, vacuum cleaners for China market, hygiene toilet seats	1 million (gas cookers)
Panasonic Home Appliances  (Hangzhou) (Export Processing  Zone) Co.,  Ltd.(PHAH- EP)   [Hangzhou  Matsushita  Home Appliances  & System  (Export Processing  Zone) Co.,  Ltd.]	Building No. 9, Export Processing Zone, Avenue12, Hangzhou Economic & Technological Development Area	Vacuum cleaners for export	2 million

As of October 1, 2004 the above four companies were renamed as part of Matsushita's global brand unification strategy. They were formerly known by the names indicated in parentheses.

About Matsushita Electric Industrial Co., Ltd. (Panasonic)
Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand name, is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated sales of US$71.92 billion for the fiscal year ended March 31, 2004. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, New York (NYSE:MC), Euronext Amsterdam and Frankfurt stock exchanges. For more information on the company and its Panasonic brand, visit the Matsushita website at http://www.panasonic.co.jp/global/top.html.