Business News

Notice regarding delay in construction, start of operation of Hita Canon Materials

Wednesday 19. November 2008 - Canon Inc. announced today that it would delay by approximately six months the construction and start of operation of Hita Canon Materials Inc., the manufacturing base in Hita City, Oita Prefecture, established in June this year. Construction is now scheduled to begin in June 2009 with operation to begin in March 2010.

Rapidly increasing demand for toner cartridges has led to the need to expand production capacity not only for toner cartridge units, but also the highly functional components used to produce toner cartridges, including rollers and toner.

Upon newly establishing Hita Canon Materials, original plans had called for starting construction in December 2008 and commencing operation in September 2009, making use of Canon’s latest automated production systems to manufacture highly functional components to be supplied to the company’s toner cartridge production bases in Japan and overseas.

Recently, however, the increase in demand for toner cartridges has been slower than originally projected due to the global economic downturn triggered by the subprime mortgage crisis, which has necessitated a revision of earlier production plans. Additionally, this trend 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 of and operation at Hita Canon Materials.

This decision will have no impact on the hiring of employees or those individuals who have already received employment offers.

Overview of Hita Canon Materials Inc. (Newly revised items are underlined)

1. Name: Hita Canon Materials Inc.
2. Location: Oaza Nishiarita, Hita City, Oita Prefecture
3. Representative: Kiichiro Sakashita, President
4. Business activities: Production of parts for toner cartridges and toner
5. Employees: approx. 500 (by end of 2011)
approx. 1,000 (by end of phase 2)
6. Capital: 80 million yen
7. Establishment: June 2008
8. Land area: approx. 390,000 sq. meters
9. Total floor area: approx. 55,300 sq. meters (by end of 2010)
approx. 111,800 sq. meters (by end of phase 2, incl. phase 1 area)
10. Investment: approx. 40 bil. yen (by end of 2011)
approx. 100 bil. yen (by end of phase 2, incl. phase 1 investment)
11. Construction (start): June 2009 (tentative)
12. Start of operations: March 2010 (tentative)