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Canon to build new $11.3 billion yen inkjet printer plant in Vietnam

29 Jun, 2004

Canon to build new $11.3 billion yen inkjet printer plant in Vietnam

Canon Inc. plans to build a new inkjet printer factory in Vietnam to more than double monthly capacity there to 1.2 million units, with an investment of 11.3 billion yen, a company spokeswoman said, confirming an earlier media report.

She said the company will build the plant in an industrial park in Hanoi. The construction of the factory, with a total floor space of some 50,000 square meters, is slated to start at the end of next month.

The new factory is expected to begin operations in June 2005, with an initial workforce of some 6,500.

The new facility will produce four low-end models for a total of 700,000 units a month.

The decision to build a new inkjet printer plant is part of a broader effort to dilute the firm's exposure to a single country. Canon now produces high-end inkjet printers in Thailand and laser printers in China, while focusing on value-added printer products in Japan.

Canon aims to boost global inkjet printer sales to 15 million units in 2004, up 30 percent from 2003, and further to 20 million units in 2005.

Mitsuhiro Osawa, analyst at Mizuho Investors Securities, said the decision by Canon to build the new plant in Vietnam is clearly aimed at taking advantage of cheap labor costs in that country, as well as to diversify the geographical production portfolio.

"In the future, however, if a fully automated factory is built in Japan, the company may shift the production of low-end products back to Japan," Osawa said.

In 2003, the inkjet printer division accounted for some 10 percent of total revenue that Canon generated.


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