In its regulatory filing sent to the Tokyo Stock Exchange on August 1, Sharp has announced that it will set up a wholly-owned subsidiary in Vietnam to manage the operation of the multiple production plant, called Sharp Manufacturing Vietnam Co., Ltd.
The new plant will be located in the Vietnam-Singapore Industrial Park II-A, in Tan Uyen district of Binh Duong province. It will start production of air purifier, LCD displays and electronic devices as soon as fiscal 2020. The capital injected into the subsidiary stands at $25 million. Sharp expects the establishment of the new plant to take place in February 2020. The new unit will be led by president Kazuhito Wada.
The Osaka-headquartered electric and electronic application equipment manufacturer told Nikkei Asian Review last week that it has scrapped plans to produce displays for the US market in China and will instead build a new plant in Vietnam to avoid new tariffs being imposed in the long-simmering trade dispute between Washington and Beijing.
The announcement was made shortly after the US-China trade talks in Shanghai concluded with little progress.
The US then announced a new round of tariffs on Chinese imports beginning September 1 and LCD imports will be on the goods affected.
For the quarter ended June 30, 2019, Sharp posted 12.5 billion yen ($117.27 million) in net profit, down almost 35 per cent on-year. Net income per share has dropped from 30.21 yen at the end of June 2018 to 20.53 per cent this year.
Its net sales and operating profit also declined by 3.5 per cent and 41.1 per cent to 514.9 billion yen ($4.83 billion) and 14.6 billion yen ($136.97 million), respectively.
Sharp currently has two affiliated companies in Vietnam, including Sharp Electronics (Vietnam) Co., Ltd. in Ho Chi Minh City and Saigon Stec Co., Ltd. in Binh Duong.
