Matsushita Kotobuki Electronics Industies Ltd. COMPANY BACKGROUND MKE is a fully owned subsidiary of Matsushita Electric Industrial Co, Ltd. It was established in Nov 1948, listed Dec 1972; and employs 5,064 people It is the group's production centre of VCRs for North America. It exports VCRs on a OEM basis to US electric machinery makers, in addition to exports under Panasonic and Quasar brand names. SUBSIDARIES MKE has three wholly-owned subsidiaries: America Kotobuki Electronics Industries, Inc. - cited in Vancouver, Washington, this VCR assembly plant is 275,000 sq-ft, and employs 200 people. Kotobuki Electronics Industries Singapore Pte.Ltd. - Produces complete, IC-populated printed circuit boards (PCBs) for colour TVs. Kotobuki Electronics Indonesia. -Set-up in April/May 1991 by MKE this 19,800-sq-m VCR plant on an industrial park is capitalized at US$20M and owned 95% by MKE and 5% by a private investor Rachmat Gobel. This location has a production rate of 100,000 units per month. MKE also owns: 51% of Japanese Victor Co. (JVC - Who supply WangDAT with their mechanism). 52% of Solbourne computers 100% of MCA Entertainment Co. Apricot. Panasquent Co. OWL Publishers. PRODUCTS Video Equipment - 63% 0f 1990 sales, deccreased 7% Audio and Information equipment - 35% of 1990 sales, increased 50% Heating Equipment - 2% of 1990 sales R & D - Jointly developed Python drives with Archive, and are working together on Archive's next generation drives, extending its memory capability to 6GB. They were chosen by Archive as they provide "Greater depth than that of other manufacturing operations in Taiwan or Singapore." - MKE is jointly developing and commercialising voice processing products with VMX. MKE will manufacture and market in Asia, VMX will market in the rest of the world. this is a multi-year agreement. - It is developing security monitors based on video phones. MANUFACTURE Their video cassette plant received the Quality Certification Mark from the Reliability Centre for Electronic Components of Japan. MKE plans to construct an international production network to offset the high yen, using parts manufactured in singapore. 3M, Maxell Corp., Insite Peripherals, & Iomega Corp., make up the Floptical Technology association. MKE is lined-up to be its drive manufacturer. MKE already manufacture for Quantum Corp. SALES - Exports represented 74% of sales in 1990. - MKE sells the jointly developed Python tape drives undeer its own product labels in its defined territory of Asia. Archive sells to the rest of the world. - They have expanded their OEM sales of low priced VCRs to RCA Corp. - Manufactures camcorders for sale under its own brand names, and under the brand names of US companies. One of these customers is Kodak. - Sells combined TV/VCRs in the US. - Supplies TVs for General Electric. FINANCIAL INCOME (Ymil) YEAR SALES OPERATING CURRENT NET EARNINGS DIVIDEND EQUITY PROFIT PROFIT PROFIT PER SHR. PER SHR. PER SHR. Mar'87 67,139 2,723 5,020 3,317 21.0 4.5 786.4 Mar'88 209,314 8,393 13,249 8,442 53.4 12.5 828.8 Mar'89 226,713 10,611 16,193 8,505 53.8 12.5 869.4 Mar'90 237,672 10,569 17,625 9,798 62.0 12.5 918.2 Mar'91 257,000 11,200 19,000 10,500 66.4 12.5 Mar'92 270,000 12,000 20,000 11,000 69.6 12.5 Sep'90 Sep'89 TOTAL ASSETS 224,097 208,822 FIXED ASSETS 42,118 39,653 CURRENT ASSETS 181,978 169,169 CURRENT LIABILITIES 70,544 64,146 WORKING CAPITAL 111,434 105,023 BANK BORROWINGS 0 0 CAPITAL STOCK 7,907 7,907 CAPITAL SURPLUS 25,515 25,515 SHAREHOLDERS EQUITY 149,450 141,010 EQIUTY RATIO (%) 66.7 67.5 INTEREST & DIVIDEND NET 4,125 3,170 ORGANISATIONAL STRUCTURE MATSUSHITA ELECTRIC INDUSTRIAL CO, LTD. | | __________________________________|______________________________ | | | | | MATSUSHITA KOTOBUKI Matsushita Kyushu Matsushita And many ELECTRONICS Communication Matsushita Electric more... INDUSTRIES LTD. Industrial Co. Electric Co. of Canada | Ltd. Ltd. Ltd. | (Screens for (Manu video (Optical | video phones) phones for disk) | export) | _________________________________________________ | | | Kotobuki America Kotobuki Electronics Kotobuki Electronics Industries Electronics Indonesia Singapore Industies (VCR) Pte Ltd. Inc. (Circuit boards) (Video, Audio & Information equip.) OUTLOOK Sales and profit projection revised upward. HDDs, high-growth line, surging further than exxpected. Heating equipment also incresing. Export-bound VCRs continue declining, but offset by stepped-up production of compact video movie cameras. Shored up by broadened product lines from 40M to 100M models, HDDs playing leading role in growth, with sales ratio rising to 30% of total. ALSO PLANNING TO FOSTER DAT-APPLIED STRATEGIC PRODUCTS. * Matsushita Electric Industrial Corp's relationship with Philips - ME jointly developed DCC with Philips and third parties. Philips owns 35% of ME's US Semi-conductor plants in the US. This has a joint manufacturing and marketing agreement with Signetics, who is 100% owned by Philips, although it is thought that ME may buy a stake in Signetics. Note. A chart is available which shows clearly Matsushita's OEM sales, joint technology development agreements and ownerships with various companies.