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December 26, 1997


Canon targets India

Canon, the global optical and office equipment manufacturer, proposes to invest about $100,000 to set up an assembling unit in India.

The unit, to be located near Delhi, would commence operations by the end of the first quarter of 1998.

It will be managed by Canon's wholly owned subsidiary in India, Canon India Private Limited.

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In the first stage, the unit will assemble imported kits of some of the company's advanced copiers. Later, the company will source components from domestic manufacturers.

Kazuya Kishimoto, marketing manager, Reprographic Products Division of Canon Singapore, said that the company plans to increase focus on the Indian market. He added that the fax and printers business in a developing market such as India needs a wide distribution network for deeper penetration.

So, he said, Canon would continue its marketing arrangement with Larsen and Toubro to distribute fax machines.

Canon also has a distribution agreement with Wipro for its printers and with Mahatta and Company to market its cameras in India. However, the company's copier business is managed by Canon's own subsidiary.

Pointing out that the copier business in India is difficult and dominated by a few players, including Xerox, Kazuya said that through its Indian partnership Canon needs to nurture this business here and catch up with the market leader.

The company is now focusing on enhancing its relationship with L&T by releasing three new products through the Indian partner. The products include a high-end fax and two multi-function faxes.

The multinational feels that there is tremendous opportunity for the fax business in India, based on the economic growth, improvement of telecommunication infrastructure, expansion of the replacement market and increasing computerisation.

Canon is expecting a doubling of the facsimile market in India to over 150,000 units annually by 2000 and is said to be positioning itself to capture a 25 per cent market share.

Last fiscal, L&T sold about 7,000 Canon fax machines and it hopes to double its sales for the current fiscal, according to company sources.

Canon tied up with L&T in December 1995 and the fax business is part of the latter's data products division. L&T also manufactures dot matrix printers and imports a small number of high-speed printers for distribution in India. The company is planning to introduce a wider range of thermal faxes in 1998.

Canon predicts that over 15 per cent of its worldwide turnover would accrue out of Asia by 2,000, against the present 9-10 per cent. The $22-billion company is expected to consolidate its efforts in developing multi-function office equipment. On the cards is a six-in-one computer peripheral.

Canon India has also decided to set up a black and white photocopier manufacturing facility in India at an approximate cost of $7.5 million.

Dr Tony Fitzgerald, managing director, Canon India, said the location of the proposed plant is yet to be firmed up.

It would have an initial manufacturing capacity of 10,000 units per annum with scope for enhancement. Further, the surplus capacity could be used to manufacture copiers for export to nearby markets.

Dr Fitzgerald said about 32,000 copiers were officially sold in India every year, while the grey market accounted for another 15,000 copiers. The market is expected to pick up to about 60,000 units by the turn of the century.

Canon India hopes to garner a 25 per cent share of the Indian market for photocopiers by 2000. In fact, of the 65 photocopier models sold in India, only two are manufactured locally.

Canon India proposes to launch a range of 11 black and white photocopiers with prices ranging from Rs 40,000 to Rs 10,50,000 and speed ranging from four copies per minute to 60 copies per minute.

- Compiled from the Indian media

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