Matsushita, better known as Panasonic, will close its mobile phone factory in the UK by the end of this year with the loss of 350 jobs, the company announced on Friday.

The factory, founded in 1988 in Thatcham, Berkshire, manufactures mobile phones mainly for the European market.

With the closure of the Thatcham plant, Matsushita will shift its European mobile phone production to a factory in the Czech Republic from April 2002, said Yasuharu Enda, a Matsushita spokesman. Enda blamed the move on the strength of the pound and falling demand.

"UK pounds are becoming more expensive, which is tough for a Japanese company," Enda explained. "But most of all, sluggish demand is the reason. Inventory is increasing and we need to move our production base to the Czech Republic where labour costs and taxes are lower."

Matsushita has an affiliate company and two factories in the UK, and announced in March that the other plant, a mobile phone packaging plant in Portsmouth, will be closed in March 2002.

A total of 550 jobs — 350 from Thatcham and 200 from Portsmouth — will be cut by the plant closings, Enda said.

Whether the company will remain in the UK has yet to be decided. [er… aren't these two sentences contradictory?] Matsushita's research and development centre, which was opened in April this year at the Thatcham plant, will continue development work on 3G (third-generation) handsets, Enda said.