Canon Revives New Plant as Camera Sales Hold Firm

Japan's Canon, the world's largest digital camera maker, revived on Friday plans to build a $180 million factory as demand holds firm for its high-end single-lens reflex cameras, lifting its
shares 1.6 percent.

www.canon40d.net Canon 40D

Canon, which competes with Nikon and Sony, had previously postponed a January construction start due to the global crisis that plunged Japanese tech companies into losses as demand dried up.

Building would now start in July and the plant in southern Japan would start production in March or April next year, a spokesman said, adding that an announcement on the details would come in the afternoon.

Sales of digital SLRs -- advanced cameras with interchangeable lenses -- have been one of the few bright spots in the technology sector, holding firm while sales for large-screen flat TVs and PCs faltered.

The Nikkei business daily reported Canon was likely to scale back its planned investment in the factory by a few billion yen, from a planned 17.4 billion yen.

It would start construction on two of three facilities, delaying the third, it said, without citing sources.

The plant, as previously planned, would have an annual capacity of 4 million cameras.

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Global unit shipments of digital SLRs rose 8 percent in April from the same month last year although revenues fell 13 percent, the Camera and Imaging Products Association said, as manufacturers cut prices.

That compares with a 24 percent fall in shipments of compact cameras, along with a 35 percent revenue fall, said the industry group, which polls 14 major digital camera makers.

Shares of Canon rose rose 50 yen to 3,170 yen against a 0.7 percent rise in the Nikkei average.

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