Canon plans $189 m copier plant

TOKYO: Canon Inc, Japan's largest maker of office equipment, said that it would spend about 20 billion yen ($189 million) on a new domestic plant for high-end copiers to accelerate product development and cut costs.

Canon said the factory would be constructed at a development facility in Toride, Ibaraki Prefecture, and concentrate on the production of colour copiers and other products that retail between 1.5 million and 5.0 million yen.

The company had stopped producing copiers at the Toride plant in 2001, when manufacturing operations were shifted to a separate plant in Ami, Ibaraki Prefecture to make room for product development at Toride, which is some 40 kilometres (25 miles) from the centre of Tokyo.

By uniting production and development at Toride, Canon hopes it will become quicker at adapting to changes in the global copier market where it faces stiff competition from the likes of U.S.-based Xerox and Japan's Ricoh Co.

"Combining our development and production operations at the Toride facility will not only enable us to speed up the development process for new products, but will also help us to save costs," said company spokesman, Richard Berger.

Canon said it would begin building the factory this July and complete the facility in July 2005. The new plant will have a total floor space of 76,000 square metres (10,908 square yards).

The Toride facility will employ roughly 5,500 people after 1,000 employees are transferred from the Ami plant.

The Ami plant, in turn, will halt production of copiers and concentrate on manufacturing steppers used in the production of liquid crystal displays (LCD). Canon is the world's top maker of LCD steppers with a market share of about 70 percent last year.

Even with the new Toride plant, Canon will still produce the bulk of its copiers overseas.

Canon makes about 70 to 80 percent of its copiers in unit terms outside Japan in lower-cost areas such as China, according to the Nihon Keizai Shimbun newspaper, although most high-end copiers are still produced at home.

© Reuters