Canon puts new Japanese camera factory on hold

Notice regarding delay in construction, start of operation of Nagasaki Canon

TOKYO, December 17, 2008—Canon Inc. announced today that it would delay the construction and start of operation of Nagasaki Canon Inc., the manufacturing base in Higashi Sonogi-gun, Nagasaki Prefecture, established in July this year.

Since 2000, demand for digital cameras has continued to increase rapidly. As demand is expected to continue growing in the future, Canon recognizes the need to expand its production capacity for both digital SLR and compact digital cameras.

Upon newly establishing Nagasaki Canon, original plans had called for starting construction in January 2009 and commencing operation in December 2009, carrying out production operations in collaboration with Oita Canon Inc., also located in Kyushu.

Recently, however, growth in demand for digital cameras has rapidly declined compared with original projections due to the global economic downturn triggered by the failure of major U.S. securities firms, which has necessitated a revision of earlier production plans. This serious drop in demand is expected to continue for a period of time. These factors led to the company's decision to delay the start of construction and operation of the new manufacturing site.

With regard to future construction and operation plans for Nagasaki Canon, Canon will watch market developments for the time being and announce a revised schedule once the timing has been determined.

This decision will have no impact on the hiring of individuals that have already received employment offers and are scheduled for hire from January 2009, including new graduates in April 2009. These individuals will undergo training at Oita Canon as originally planned and will be assigned work at Nagasaki Canon sometime following the start of operations at the new site.

The construction was originally announced in July and was to be called Nagasaki Canon Inc. The site is located in Hasami-cho, Higashi Sonogi-gun, Nagasaki Prefecture. The cost of setting up the 41,700 square meter facility would be 17.4 billion yen (US$198 million) with a completion date in 2010. Over 1,000 staff would be required to run the facility.

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The numbers of casualised [temporary] workers grew from 10 million, or 20.9 percent of the workforce, in 1995 to 17.3 million or 33.7 percent in 2007. Among them, 41 percent were women, one of the highest ratios in the Organisation of Economic Cooperation and Development (OECD) countries. Part-time workers’ average hourly rates are 40 percent lower than for regular employees.

Japan had a workforce of 51.2 million last year, but only 66.3 percent were regular workers—compared to 83.6 percent in 1985. The leading Japanese manufacturer of cameras and printers, Canon, for instance, now employs 70 percent of its factory workers on a non-regular basis, up from 50 percent in 2000 and just 10 percent in 1995.

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