Canon makes China the focal point in Asia


  • Business
  • Monday, 19 Apr 2004

By HASNI MOHD NASIR in SHANGHAI

ASIA, which contributed 10%, or US$3.05bil to Canon group's total sales last year, is expected to be a significant region in the camera and office equipment manufacturer's expansion plan in the next five years. 

And China, being the number one driving force of the world economy, will get a huge chunk of the budget allocation for the purpose. So far, Canon has invested 100bil yen, or close to US$1bil, to establish the seven manufacturing plants in China. 

Canon closed its financial year 2003 with a turnover of US$29.9bil, representing an 8.8% growth from the previous year due to significant growth in sales of digital cameras and colour network digital MFDs (multi-functional devices). 

Fujio Mitarai

About 70% of the sales for the company came from outside Japan with sales in Europe and the US accounting for 30% each.  

Although the sales contribution from Asia (excluding Japan) is only 10% currently, the region is expected to be the next growth market for the company. 

Canon Inc president and chief executive officer Fujio Mitarai, in a session with Asian journalists at the Canon Asia Expo 2004 held in Shanghai earlier this month, said year-on-year business growth of Canon Marketing group in China and the rest of Asia reached 23% last year, far outpacing growth in the Americas and Europe. 

“The great progress in Asia has made an extremely important contribution to Canon's overall development. Also the solid growth enjoyed by China and the vigorous free trade agreements pursued by Asean countries indicate that we can look forward to further development in the region,” he said. 

Yoroku Adachi

Canon Asia marketing group president, Yoroku Adachi said Canon had achieved good showing in the first quarter to March 31 results with year-on-year growth of 36% compared with the previous corresponding period. 

“Asian annual gross domestic product is set to post 6.2% growth this year and Canon Asia marketing group will take advantage of this trend to further boost our growth. We will achieve this through the help of excellent products and marketing,” he said. 

Based on the first quarter results, the group is confident of achieving a 20% growth as projected for Asian countries and more than 40% for China. 

In 2003, China recorded sales of US$380mil and the figure is expected to reach US$500mil this year, US$700mil next year and to US$1bil in 2006. 

Last year, all other markets in Asia reported double-digit growth ranging from 10% in India to 47% in Taiwan. 

Adachi, reiterating Canon's ambitious goals for 2005 said: “We will triple our sales in Asia on the basis of 2002 results; we will achieve the number one market share for all our major product lines in all countries and territories across Asia and we will become the region's number one in customer satisfaction.” 

Canon Marketing Malaysia Sdn Bhd vice-president and general manager Liew Sip Chon said the company had revised upwards its initial target of a 10% growth to 20%, in line with the projections made by Canon Inc. 

Canon Malaysia expects to record RM500mil in revenue this year. The figure for last year was RM410mil. The first quarter to March 31, 2004 result has been encouraging, and at RM128mil, is within expectations of the revised projection. 

Mitarai said Asia played two important roles for the Canon group. And Canon China played a critical role in Canon's Asia operations. 

“First, the region functions as a manufacturing base. Between the coasts of East Asia and South-East Asia, Canon has 10 major production sites that manufacture many of our principal products, including digital cameras, digital multifunction office systems and printers, 

He said among these, the Suzhou plant, with 87,000 square metres of floor space, was a truly world-class facility. 

“This plant is an important base supporting the manufacture of digital multifunction systems. All our production sites in Asia possess very advanced manufacturing technologies and capabilities.”  

The second role that Asia played for the Canon group, according to Mitarai, was that it offered a rapidly expanding market for the group products. 

“China is especially important in this regard. The country joined the WTO in 2002, and is now looking forward to the Beijing Olympics Games in 2008, and the 2010 World Expo in Shanghai,” he said. 

To date, Canon's investment in Asia had focused mainly on expanding and upgrading of manufacturing bases, he said. 

“However, with the completion of the large-scale Suzhou plant, we can now focus our energy on the next task at hand – preparing for the rapid growth that we expect in the Chinese market. As such, we will strengthen our manufacturing for China's domestic market, and invest substantially in developing our sales and service network,” he said. 

Last year, Canon established 15 marketing hubs in China and this year, efforts will be directed to strengthen these hubs to boost marketing capabilities. 

“These efforts will not be limited to existing markets. Rather, we will make every effort to provide our customers with truly attractive products and services,” he said. 

Canon plans to launch in the Chinese market more than 100 new consumer and professional products this year, or two every week.  

Related Stories:R&D spending to be raised to 10% of net sales Four-day expo showcases wide range of Canon products Seven raids in Malaysia last year to reduce fake goods production New Suzhou plant is largest production facility in the world 

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