OREANDA-NEWS. Since early 2000, Sharp Corporation has expanded its business with growth drivers, including LCD TVs and mobile handsets in Japan, while making a large investment in the LCD related business, aiming for further business growth. On the other hand, as the market expands, products including digital consumer appliances have commoditized quickly, creating a difficult position for Sharp, in the face of the growing presence of overseas competitor companies that have a high cost competitive edge. With the global economic slowdown after Lehman’s fall and the delay in taking action to change market demand after the termination of Eco-Point Program in Japan, Sharp’s net sales have decreased following a peak in fiscal 2007.

As a result, burdened by the depreciation of the large-sum investment in LCD related business, Sharp has recorded a total net loss of 900 billion yen in fiscal 2011 and fiscal 2012. To overcome this situation, Sharp has set a corporate strategy to achieve “recovery and growth,” and a medium-term management plan for fiscal 2013 through fiscal 2015 was established at the board of directors’ meeting held today.

Sharp has been actively investing in LCD related business that depends on market demand and requires a considerable amount of investment to be successful. This has resulted in weakening its financial foundation by making plant operations a priority to recover the investment, resulting in excess inventory and a diminished financial position. In addition, the development of products that lacked a consumer point-of-view made less attractive products, and the governance and monitoring of the management performance was insufficient.

Facing these challenges, Sharp has achieved a surplus in net sales for the second half of 2012 with a 270.2 billion increase, compared to the first half of fiscal 2012 supported by strong sales of electronic components, including LCDs and solar cells, and achieving a positive operating income thorough the reduction of fixed costs. With this positive result in operating income as a stepping stone, Sharp plans to become “a new Sharp” by making steady progress in restructuring the business portfolio starting in fiscal 2013, stabilizing profit growth and generating cash flow.