SHAH ALAM: Panasonic Manufacturing Malaysia Bhd, a home appliance maker, plans to increase in-house production of components previously purchased from external sources to minimise its production cost.

"To mitigate the impact of escalating costs of raw materials, the company also implemented other cost reduction activities like investing in new-die casting machines for better efficiency of in-house parts production, implementing consolidated purchase and shipment of parts from China," Panasonic Manufacturing managing director Naoya Nishiwaki said after the company's AGM yesterday.

He added that the company was also getting price negotiation support from its parent in Japan to minimise inventory and lower costs.

"Despite the increase in the prices of petrol, we still see good demand for our items, as we have new products like LCD and plasma TV and digital cameras," he said.

Meanwhile, Panasonic Malaysia Sdn Bhd managing director Tony Endoh said Panasonic products were still enjoying good sales. He said from April to August 2008, the company saw more than 10% increase in sales of home appliances compared to last year. Panasonic expects sales of electrical appliances to grow by 5%-7% this year.

For its first quarter ended June 30, 2008, Panasonic Manufacturing posted an 11% rise in revenue to RM156.6 million, compared with RM141 million a year earlier, while net profit improved to RM11.9 million from RM10.3 million previously.