Royal Philips NV has no plans to retrench from China, which accounts for about 15% of its revenue, said Chief Executive Officer Roy Jakobs.
(Bloomberg) — Royal Philips NV has no plans to retrench from China, which accounts for about 15% of its revenue, said Chief Executive Officer Roy Jakobs.
“China remains an important part of the future of Philips,” Jakobs told Bloomberg Television. That said, Philips is making sure it has the right supply-chain setup to serve customers in each region, he added.
His comments come as trade tensions and Russia’s invasion of Ukraine have prompted western governments and companies to seek to avoid over-reliance on Chinese materials and manufacturing. The Dutch company is dealing with differing trends economically, with the US strengthening and Europe and China growing more slowly, Jakobs said.
Philips is a defendant in class-action lawsuits and individual personal injury claims in the US following the June 2021 recall of its faulty sleep therapy devices. The company is also being investigated by the US Department of Justice and remains in discussions with the Food and Drug Administration regarding a proposed consent decree.
Jakobs said the first part of the recall is nearly complete, with 99% of the devices replaced in the market. The firm agreed earlier this month to pay at least $479 million to resolve certain litigation tied to the recall, but “further litigation is coming,” Jakobs said.
–With assistance from Manus Cranny.
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