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"Watching the situation”: Canon eyes moving production out of China

Canon is the latest print technology giant to consider moving its manufacturing facilities out of China because of the escalating US-China trade war. The Japan-based company says it’s looking at alternative sites in 40 other countries.

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Canon facility in Suzhou, China - photo: InfoTrends

“We are conducting feasibility studies across the world in about 40 countries and are ready to set up new factories in some countries because US-China relations might affect production or business; so we always need to be prepared,” Kazutada Kobayashi, advisory director of Canon (pictured right), told India’s Business Standard newspaper.

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Canon says it is evaluating other possible manufacturing sites for fundamentals of production including infrastructure, labour quality, convenience and material supply.

“The timing of establishing new factories cannot be ascertained and is very unforeseeable," Kobayashi said. "Any emerging thing may happen or there may be a new domain that we may step into."

Canon has six manufacturing facilities across China that produce printers, cameras and related equipment.

“The printers and the copiers are being produced in China, Thailand and Philippines,” said Kobayashi. “So, if we face difficulties in China, we can produce the same models in the other two countries – that is how we can hedge the risk. We are still watching the situation.”

Most of the shortlisted countries are in South-East Asia, South America, West Asia and Africa. Kobayashi said plant locations need to spread across the globe for effective hedging against the tariff war.

“It will be across the world, otherwise the hedge risk will have no meaning if you concentrate on one geography.”

In June 2019, Epson joined hundreds of US, Chinese and Japanese companies in requesting product exemptions from US President Trump’s plan to increase tariffs on another $300bn of products from China - including printers and copiers. Epson has several manufacturing sites in China and, in its submission to the Office of the US Trade Representative, infers that it is reviewing its manufacturing bases but that, since it owns most of its sites, relocation is not always feasible in the near-term.

In May 2019, Ricoh announced it was shifting some production of its multifunctional printers from China to Thailand to avoid US tariffs. “Ricoh will continue to investigate the possible shift of other products and related parts and supplies, with a view to optimizing the supply chain system. This may further include a shift from Thailand to China in response to possible business risks, and to achieve even greater efficiencies," it said.