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Toshiba to Expand Overseas Production in 1987

January 28, 1987

TOKYO (AP) _ Toshiba Corp. will increase its overseas production in 1987 to expand its markets abroad and offset losses caused by the high value of the Japanese yen, Toshiba President Sugiichiro Watari said Wednesday.

Offshore production will be emphasized in line with the giant electronic manufacturer’s policy of easing trade friction and enhancing the international business environment, Watari said at an annual news conference.

″We will pursue our efforts to increase imports of high-technology products,″ Watari said. ″We will also increase production overseas of manufactured goods for export to third countries or back to Japan.″

Toshiba plans this year to begin production of radio cassette players in South Korea for export to the United States, and production of color television sets in Singapore destined for the Middle East, according to Toshiba Executive Vice President Fumio Ohta.

The company also will expand its production of air conditioners and radio cassette players in Taiwan, Ohta said.

He said overseas production in fiscal 1986, which ends this March, will be worth approximately 200 billion yen, or roughly $1.3 billion, of which some 12 percent will be exported to Japan. Toshiba plans to increase this to about $1.9 billion, Ohta said.

Toshiba and other Japanese manufacturers have turned increasingly to overseas production to ease Japan’s huge surpluses with its trading partners and to compensate for the high yen, which makes production in Japan more expensive.

With the 60 percent rise of the yen against the U.S. dollar in the last 16 months, Japanese-made products have become significantly more expensive overseas.

While Toshiba currently produces about two-thirds of the microwave ovens it sells in the U.S. market in the United States, the company will have to shift more production to the United States if the yen remains at about 150 yen to the dollar, Ohta said.

Watari, a former Toshiba executive vice president for consumer products, said the company’s priorities in the coming year also include shortening the development period of new products; reducing inventories in all phases from production to marketing; promoting development of information-relate d sectors; expanding its semiconductor business, and opening design centers around the world.

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