The world’s leading camera and office equipment maker Canon has announced its long-term strategy to turn Vietnam into one of its manufacturing bases and continually expand the volume and sophistication of the products it produces in the country.
Senior managing director of Canon Yukio Yamashita told Vietnam Investment Review that his company believes there is tremendous potential for growth in Vietnam due to rising household incomes, a large, ambitious and hardworking population, and the increasing level of advanced technology being adopted in the country.
“These factors combine to see Canon viewing Vietnam as a key market in the years to come,” Yukio said. “This explains our recent increase in activity here. What’s more, Canon products made in Vietnam compare favourably to those from our other manufacturing plants around the world. This has been one of the key reasons that we have continually expanded production at our Vietnamese factories.”
Canon has operated an authorised network of distributors in Vietnam since the early 1980s. In 2002, it opened a representative office in HCM City and another in Hanoi by 2004.
In April 2004, Canon received an investment licence to build its first factory with registered capital of US$76 million on a 20-hectare site at Hanoi’s Thang Long industrial park (IP). The factory started producing single-function inkjet printers in May 2002.
Sachio Kageyama, general director of Canon Vietnam, told Vietnam Investment Review that the factory’s production capacity recently reached 550,000 units per month, most of which are exported.
Kageyama said Canon Vietnam’s revenue increased to US$210 million by 2004 from US$25 million in 2002 and US$148 million in 2003. Most of the company’s earnings come from exporting products around the world.
Canon plans to sell 20% of its monthly production output, or around 100,000 units, in Vietnam. Nevertheless, the demand for inkjet printers in Vietnam is not very high, so the target is still far from what the company hopes for in the future.
Sachio said that Canon’s second factory in Thang Long IP, built at a cost of US$105 million, is designed to produce 700,000 multi-function inkjet printers per month and will commence operations in June this year.
Meanwhile, Canon is drawing up plans to start construction in April this year on the largest laser beam printer (LBP) factory in the world at Que Vo IP in Bac Ninh Province. The new factory will be able to provide the international market with eight million low-cost LBPs every year once it becomes fully operational in 2007.
It is calculated that the annual production output of the factory will be close to 80% of the 10 million LBPs Canon currently produces each year and will reinforce the company’s ability to control more than 50% of the global market for laser printers.
Canon plans to invest US$50 million to build the Bac Ninh-based factory, all of whose products will be exported.
“Obviously, the policy that requires products to be exported and re-imported is not ideal, however it is the system we must work within and we look forward to sustained growth in Vietnam within the constraints that we must work,” Yukio said.