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Canon to Make Digital Cameras in Malaysia

July 6, 2001 (KUALA LUMPUR, Malaysia) -- Canon Inc. will be shifting part of its digital camera operations to Malaysia this year, a first for the camera-maker outside Japan.

"Increased demand for digital cameras has created the need to step up offshore production efforts," said Canon spokesperson Richard Berger in an e-mail reply to Asia BizTech.

He said production of the 1.3-megapixel PowerShot A10 will begin soon at Canon's plant based in Shah Alam, about 30 kilometers west of the capital city, Kuala Lumpur.

The Malaysian plant currently ships Canon's 35mm range and Advanced Photo System compact cameras, and has been producing cameras for export for 11 years.

"The manufacturing subsidiary already has all the infrastructure in place, and with new production methods such as the 'cell' method, which does away with conveyer belts, we have more production space to allow for new products to be manufactured," Berger said.

Berger confirmed an earlier statement made by Canon Marketing (M) Sdn., Bhd. managing director Satoshi Kimura that it was shifting digital camera production here, citing political stability and cheap, but high quality labor.

Canon's shift mirrors moves by other digital camera manufacturers to shift production to lower cost centers. Eastman Kodak Co. recently announced plans to set up a plant in Shanghai, China to manufacture its digital cameras in a joint venture with Shanghai Seagull Camera Co., Ltd.

Berger added that cameras produced in Malaysia will be shipped worldwide, and that Canon will continue to produce the PowerShot in Japan.

A latecomer in the digital camera game, Canon has been busy playing catch-up, and now ranks among the top four Japanese brands of digital cameras in the world, along with rivals Sony Corp., Olympus Optical Co., Ltd, and Fuji Photo Film Co., Ltd.

Digital cameras have become hot-selling items in the electronic consumer product space, with Japanese manufacturers controlling about 80 percent of the global market. The Japan Camera Industry Association estimates digital camera shipments will reach 14.8 million units in 2001, up from 10.34 million units in 2000.

In contrast, JCIA estimates film-based camera shipments by Japanese manufacturers will dip 7.3 percent this year, from 31.7 million units in 2000.

One major factor driving demand is speedy distribution and publishing via the Internet. "The Internet and PCs are becoming increasingly accessible to a growing number of users, which makes digital photography an attractive medium for enjoying and sharing digital images. The ease of use of the cameras and level of control currently available could never be realized through conventional photography," Berger said.

He added that home printing of digital photos has begun to take off.

(Julian Matthews, Malaysian Correspondent, Nikkei Electronics Asia)

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