Matsushita to spend $ 40 mln to hike battery output

TOKYO, Nov 15 (Reuters) Matsushita Electric Industrial Co's battery unit said on Thursday it would spend million to build a new factory in Japan as part of its plan to boost its lithium-ion battery output capacity by 48 percent.

Matsushita, which competes with Sanyo Electric Co Ltd and Sony Corp in the rechargeable battery industry, aims to meet growing lithium-ion battery demand as global sales of battery-run mobile gear such as cellphones, digital cameras and laptop PCs expand.

The Panasonic maker, whose flagship battery plant in Japan was hit by a fire in September, also seeks to reduce risk of production disruptions by setting up a second major production site for lithium-ion batteries.

Matsushita Battery Industrial, Matsushita's battery unit, plans to spend about 4.5 billion yen ( million) to build the new plant by May 2008.

The scale of investment in production equipment that will be installed in the new building, located in Wakayama prefecture, western Japan, has not been decided.

With the construction of the new production facility and expansion of output capacity at its flagship plant in Osaka and the other plant in China, Matsushita aims to boost its overall lithium-ion battery output capacity to 37 million units a month by the year starting April 2009 from 25 million.

Shares in Matsushita were down 0.7 percent at 2,185 yen, underperforming the Tokyo stock market's electrical machinery index, which rose 0.11 percent.

REUTERS DKS SSC1117