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 user 2011-02-09 at 9:23:18 am Views: 39
  • #24276

    and printer giant Canon Inc. said it will buy back more of its shares,
    as soon as this year if the price falls, in keeping with a strategy of
    having treasury stock on hand in case an attractive acquisition target
    comes along.It will also build a new cartridge plant in Europe and boost
    its sales force in Asia to more than 10,000 as quickly as possible from
    the current 3,000, to take advantage of the region’s rapid economic
    growth, Chairman Fujio Mitarai said in an interview on Tuesday.He also
    said there were no plans to change the company’s 25 per-cent stake in
    Hitachi unit Hitachi Displays. Media have reported that Foxconn
    subsidiary Hon Hai Precision Industry Co was planning to invest more
    than $1-billion in the unit, reducing Hitachi’s holding.

    already holds about 100 million of its own 1.3 billion shares and adding
    to this only makes financial sense, Mitarai said.“Looking at interest
    rates … rather than keeping money in a bank, it is more profitable to
    buy back shares so that you don’t have to pay dividends.”Asked about
    specific plans for the financial year that began in January, he declined
    to give a target percentage, but said: “If the share price goes down,
    of course we will buy them.”Canon is keen on possible acquisitions,
    particularly in medical and industrial equipment, as it works towards an
    ambitious target of returning profits to their 2007 peak of 757 billion
    yen ($9.1-billion) in 2012. It expects to have made 390 billion yen in
    the year just ended on Dec. 31.

    executives nailed down the specifics of a five-year corporate strategy
    earlier this month and Mitarai said capital investment would be at least
    1 trillion yen over the five-year period, at a pace of about 200
    billion to 300 billion yen annually.The company’s investment in sales
    operations needs to focus on China, Asia and developing countries, he
    said, but added that Canon was having difficulty finding sales staff in
    China.Separately, Mitarai said the company would spend about 20 billion
    to 30 billion yen on building a new toner cartridge plant in Europe, on
    which it planned to start work this year.The move is part of a strategy
    to produce and recycle cartridges closer to the end user, to save on
    fuel and other distribution costs.

    Canon already has a similar
    plant in Virginia to serve the U.S. market, but Mitarai said cartridges
    for Asia would continue to be produced in Japan. The company is
    currently seeking real estate for the European plant, but has not
    decided on a particular country, he said.Mitarai said the company had
    not been approached about selling its 25 per cent stake in Hitachi
    Displays and it had no plans to either raise or lower its stake in the
    venture, even if a third party were to invest.“Our stake may fall in
    percentage terms, but we don’t mind. Being a shareholder is not the
    point. The point is joint development,” Mitarai said.Shares in Canon
    fell 1.4 per cent to 4,155 yen on Tuesday, underperforming a 0.3 per
    cent decline in the Nikkei stock average.

    Fund manager Naoki
    Fujiwara of Shinkin Asset management said sales projections for the
    current year would be investors’ next focus, with results for 2010
    mostly factored in ahead of the company’s annual earnings report on Jan.
    27.“In the short term, things look very stable,” Fujiwara said. “But in
    terms of growth prospects, there doesn’t seem to be any reason for the
    share price to rise.”