As a result of overcapacity, Philips N.V. plans to close roughly one third of its production facilities worldwide by the year 2002, the company confirmed today.
Within four years, the Dutch electronics concern plans to reduce its plants from 244 to about 160, Philips chairman Cor Boonstra said in a newspaper interview this weekend.
That is a "ballpark" figure, according to a Philips spokeswoman, who said she could give out no further details on what kinds of facilities the company will be shutting.
"This just confirms the direction we said we are taking when we released our third quarter results," the spokeswoman said. "We will be consolidating."
Philips will be concentrating on the areas of semiconductors, lamps and medical technologies, Boonstra said in the interview.
Citing poor sales in consumer products, semiconductors and components, Philips saw its net income plummet 70 per cent in the third quarter ended Sept. 30. The company's net income totalled 425 million guilders ($AUS365 million), down from 1.43 billion guilders the same period the previous year, and third quarter revenue was also down from 18.88 billion to 16.13 billion guilders.
Philips is also in the process of dissolving a disastrous joint venture with Lucent Technologies Inc., calling the mobile phone venture a disappointment for both partners. Formed in 1997, Philips Consumer Communications has seen "adverse income developments" in the first nine months of 1998, Philips said last month. Philips owned 60 per cent of the venture, Lucent the remaining share.