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Canon Investing Over $700 Million in Toner Plant in Japan

20 Jun, 2005

Canon Investing Over $700 Million in Toner Plant in Japan

Canon Inc. will invest $734 million in a new factory in southwestern Japan to boost output of ink and toner cartridges. It will begin construction of the plant in January 2007.

Canon gets the lion's share of its profits from ink, cartridges and other consumables that must be replaced periodically and provide a steady stream of income long after the initial sale of the machine.

Canon has enjoyed strong demand for consumables thanks to a large installed base of machines. It controls nearly 30 percent of the global copier market and more than half the laser printer market including output supplied to Hewlett-Packard, and it is one of the top makers of inkjet printers.

Canon said the factory would employ about 1,100 workers and use machines to automate the assembly process, in line with its plan to fully automate 25 percent of its overall domestic production by the end of 2007 to lower manufacturing costs.

The Tokyo-based company plans to produce ink and toner as well as the cartridges at the factory, allowing it to integrate the entire manufacturing process, which should shorten lead times and lead to lower shipping costs.

Canon said the new factory would be able to produce about 100 million ink jet cartridges in 2008, giving it a total output of 400 million units including expected levels of production at two other domestic plants. Its output will be about 250 million units in 2005, but it plans to raise that to 300 million over the next two years. The new consumables factory will be built on 400,000 square meters of land adjacent to its digital camera plant.

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