Panasonic to Build Lithium-ion Battery Plant in Osaka

- 123 billion yen investment for new plant and buildup of existing facilities -

Osaka, Japan - Matsushita Battery Industrial Co., Ltd. (MBI), a consolidated subsidiary of Matsushita Electric Industry Co., Ltd. (MEI [NYSE symbol: MC]) known for its Panasonic brand products, today announced the company’s plan to construct a new flagship lithium-ion battery plant in Osaka City. With two other existing manufacturing bases in Osaka Prefecture and Wakayama Prefecture, MBI will integrate the new plant to reinforce the production of rechargeable batteries in Japan.

The new plant will be the main manufacturing site, employing an integrated manufacturing system controlling everything from electrode production, cell assembly and charge-discharge testing to packaging and shipping. Especially, the electrode production facilities will ensure the safety of lithium-ion battery products as well as a safe manufacturing process. The plant will be strategically located in Osaka City to provide logistical advantages when working with its other plants in Osaka and Wakayama Prefectures.

MBI will invest about 100 billion yen in the new plant, which will be built in two phases. The first phase construction will begin in December 2008 with the aim of commencing electrode production in October 2009 and battery cell production in April 2010 with a capacity of 300 million battery cells. When the second phase construction is completed, the new plant will have a total production capacity of about 600 million lithium-ion battery cells per year (50 million cells per month).

In addition, the company plans to invest about 23 billion yen to improve the productivity of the existing two plants. With a total investment of 123 billion yen in these domestic plants, the company aims to firmly establish a global manufacturing system that can satisfy the growing and diversifying global market needs. This requires the cooperating of domestic plants with the overseas plant in Wuxi, China, capable of producing batteries in various varieties and volumes.

Demand for environmentally-friendly, rechargeable batteries shows notable increases not only in major markets like Europe, the U.S. and Japan, but also in emerging markets like BRIC countries, as demand for mobile devices like laptop PCs and cell phones are on the rise.

Making MBI one of the world’s top manufacturers of lithium-ion batteries, the plant will help to accelerate the company’s growth strategy to meet market needs and take advantage of its technological prowess in manufacturing safe batteries with high energy capacity.

The company aims to build a safe, secure and environmentally-friendly factory by implementing a safe manufacturing environment and maintaining high energy efficiency. The factory aims to reduce CO2 emissions by 30% based on the basic unit* from the level of fiscal year 2009 ending March 2009.

*CO2 emissions/(Consolidated sales/Bank of Japan’s corporate goods price index [electrical equipment])