Canon, the world’s top maker of copiers and laser printers, said it would invest 80 billion yen ($734 million) on a new factory in southwestern Japan to boost output of ink and toner cartridges.

Canon, which competes with the likes of Ricoh and Xerox in copiers and Seiko Epson in printers, would begin construction of the plant in Oita prefecture in March 2006 and start production in January 2007, a Reuters report said.
Like other printer and copier makers, Canon gets the lion’s share of its profits from ink, cartridges and other consumables that must be replaced periodically and provide a steady stream of income long after the initial sale of the machine.
Canon has enjoyed strong demand for consumables thanks to a large installed base of machines. It controls nearly 30 percent of the global copier market and more than half the laser printer market including output supplied to Hewlett-Packard.
The investment is one of Canon’s largest in recent history, coming in just below the 90 billion yen it has earmarked for a new domestic plant with partner Toshiba for the production of surface conduction electron emitter displays.
It also underscores Canon’s commitment to keeping 60 per cent of its total production in Japan. This is in contrast to many of its rivals, which have been looking to become more efficient by shifting production to China and elsewhere overseas.
Investors have been waiting to see how Canon will use a growing cash pile that is expected to top 1 trillion yen this year with the company forecasting group net profit will rise seven per cent to a record 367 billion yen.
Canon has its main digital camera factory and other plants in Oita, on Japan’s southernmost main island of Kyushu.