Canon to focus on China as HK slips
Japanese giant Canon believes its Hong Kong market will shrink significantly over the next 20 years relative to the burgeoning China market.
Canon Hong Kong deputy managing director Takashi Oshiyama yesterday said the relative contributions of China, Taiwan and Hong Kong - its three main markets - would change dramatically as the company capitalised on the opening of the mainland market.
'With China talking about WTO and GATT, import taxes that are now about 23 per cent may drop to 15 per cent in the coming years,' Mr Oshiyama said.
'In the case of cameras, we see very high import taxes but it will get better with better economic conditions.' China contributes 50 per cent to Canon Hong Kong's revenue, Hong Kong 25 per cent and Taiwan 25 per cent.
Mr Oshiyama said China's contribution was expected to jump to 90 per cent, while the other two markets would each drop to 5 per cent in the long term.
He said that while profits from China had risen about 5 per cent a year for the past several years, growth remained relatively stable in the territory.
'Last year, the Hong Kong economy faced some problems so the consumption ration was not that good,' Mr Oshiyama said.
Canon will invest US$30 million in manufacturing and marketing in China this year, focusing on printers, fax machines, cameras and copiers.
Mr Oshiyama said a joint-venture for fax machine production was likely to be established at an undetermined location in southern China this year, and another printer plant was being considered for the 'near future'.
Canon has plants in Dalian Liaoning province and Zhuhai.
The turnover of Canon Hong Kong rose 3 per cent last year to $306 million from $297 million in 1995, and it contributed almost 10 per cent of total turnover of its parent, the Canon Group.
