Konica eyes PH as production hub

By Marianne V. Go, The Philippine Star

Posted at Jan 31 2014 08:32 AM | Updated as of Jan 31 2014 04:32 PM

MANILA - The Philippines, along with some of its Asean neighbors such as Thailand and Myanmar, is being eyed by business technologies manufacturer Konica-Minolta Inc. as a possible alternative production site for the Japanese firm which currently manufactures up to 80 percent of its printers and copiers in China.

This was revealed by visiting Konica-Minolta Inc. senior executive officer Jun Haraguchi to local business writers, saying that the transfer of manufacturing operations to an alternative site is just “a matter of time” as the cost of labor in China has increased substantially.

The cost of labor in China, Haraguchi revealed, has been increasing 15 percent annually.

However, Haraguchi said that the final decision to transfer manufacturing operations to Asean would have to factor in several other considerations such as logistics – freight and transport-- and convincing its suppliers to relocate to Konica-Minolta’s production site.

However, he highlighted the fact that since Konica-Minolta is a high technology firm, the quality of production and the people would also be a key component in deciding where to relocate manufacturing operations.

Edilberto B. Bravo, chairman and chief executive officer of U-Bix Corp., which is Konica-Minolta’s exclusive Philippine distributor, added that such an investment in the country would also have to factor in the tax system as well as currency movements.

Likewise, Haraguchi said, Konica-Minolta would also have to determine market demand in the alternative production site.

According to Bravo, Konica-Minolta currently accounts for 36 percent of the business solutions/laser printer/copier market in the Philippines, matching the similar 36 percent market share of Xerox Corp.

Konica-Minolta’s market in Asean, according to Ryo Maruhasi – managing director for the firm’s Business Solutions Asia Pte Ltd. based in Singapore – account for $100 million in sales.

The Philippines, Bravo added, contributed $8 million to the Asean total sales.

Moving forward, though, Bravo is optimistic that U-bix’s revenues would grow 20 percent annually in the next three year, and aspirationally, Konica-Minolta’s market share would expand to a more dominant 66 percent.

Haraguchi and Bravo were also both optimistic that despite the continuing leaps and bounds of technology, the printing business would not completely disappear as previously envisioned.

However, Haraguchi and Bravo acknowledged the need for the firm to continue to innovate and meet the demands for connectivity of smart devices.

Haraguchi clarified that Konica-Minolta has shifted its focus to business solution since 2006 when its sold its camera business to Sony.

U-bix started its partnership with Konica-Minolta in 1974 and will celebrate next month its 40th anniversary.

Konica-Minolta’s business, Haraguchi said, is focused on the medium to high-end market and does not compete with the personal printers and copiers.]

Haraguchi praised its partnership with U-Bix, noting “Konica-Minolta is delighted to have had U-bix as its business partner in the Philippines since 1974. We have already achieved much and look forward to continuing to work with U- Bix in tapping the tremendous growth opportunities in the country.”

Bravo, for his part, replied that “U-Bix’s growth was made possible because of the sincere and untiring support of its Konica-Minolta partners in Japan.”