Sharp seeks solutions to its financial crisis
Thu 19 Nov 2015
Two recent reports have claimed that Sharp Corporation has come up with two solutions to help combat its falling profits.
Last month, Sharp’s second quarter profits were reported to have dropped 86% from the same period in 2014. Additionally, Sharp’s LCD television business was reported to have made a loss of 12.7 billion yen (the equivalent of £67 million or $102 million) while shares in the company had dropped by almost 70% in the last two years.
One such solution to combat the problem is the possibility of closing remaining overseas TV factories. The factories – in China and Malaysia – could face closure, and if this move were to go ahead, then the only major Sharp TV manufacturing sites would be in Japan.
Kenichi Kodani, head of Sharp’s digital information appliance division, said that the “company is considering various restructuring measures.” Recent closures of overseas plants have seen the sale of Poland’s TV factory in 2014 and the agreement of the sale of Sharp’s Mexico plant to China’s Hisense Group earlier in 2015.
The other reported solution has seen Sharp employees buying products to help dwindling sales. The Japanese paper Yomiuri Online claimed that Sharp has told its staff to buy its own products. A Financial Times report backed this up, quoting Sharp’s head of electronics Yoshisuke Hasegawa asking employees to buy the products in order to help Sharp “weather this extreme difficulty”.
Sharp executives have allegedly been asked to spend at least 200,000 yen (the equivalent of £1062 or $1622) on Sharp products by the end of January, middle managers around 100,000 yen (equivalent of £531 or $811) and front line staff around 50,000 yen (equivalent of £265 or $405).
However, despite these reports, there are still causes for optimism at Sharp. Kenichi Kodani has said that Sharp’s digital information appliance division is likely to make a profit in the next fiscal year – this is a result of demand in Japan for 4K ultra-high definition TV sets.