Hoya to Liquidate Pentax Factory in Shanghai China

Hoya Corporation made an announcement on Monday that they will close down and disband their digital camera manufacturing unit in Shanghai as part of efforts to streamline operations, which has just been told recently in their recent financial report for the first quarter of the current financial year, see the Dow Jones Newswires report below:-

http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200808250319DOWJONESDJONLINE000049_univ.xml

The to-be-closed down Pentax unit supplies parts to Pentax plants in Philippines and Vietnam, which make Pentax digital SLR bodies and lenses respectively.

Although it is expected that Hoya will close down those "non-profitable" Pentax units as told, they really act very fast to do what they have just told! What an efficient company!

Besides, other Japanese financial news agents online also report this piece of news, see:-

1. http://www.lnews.jp/2008/08/28866.html (in Japanese)

The quick factsheet for the Pentax business unit to be liquidated is translated as follows:

Unit Name: PENTAX（Shanghai）Corporation
Location: Shanghai, China
Head of Unit: Torigoe Oco. (鳥越興)
Business Scope: Manufacturing of medical instrument and optical equipment/parts
Established: March 25, 2003
Invested Capital: 3 Billion Japanese Yens (300,000,000 JPY, or about US$ 2.73M)
Net Asset Value: 10,858,000 RMB (US$ 1.606M), as at end-March 2008
Total Asset Value: 12,731,000 RMB (US$ 1.883M), as at end-March 2008
Account Settlement: December
Owned by: HOYA, 100%

Well, it can be seen in the above that the factory is still quite new and very probably the investment has not been paid back yet as its net asset value (excluding liability) is now only 58.8% of the initial investment cost (the face value dropped by 41.2%, or simply US$ 1.124M has been lost).

2. http://techon.nikkeibp.co.jp/article/NEWS/20080825/156853/?ST=observer (in Japanese)

Translated and quoted:-

"The subsidiary company of Hoya, Pentax (Shanghai) Corp. in China, which manages the manufacturing of optical parts and the lenses, will be liquidated and closed down in March 2009. The company was established by Pentax in 2003, for the production of camera and optical parts. The initial production scale was set at 20,000 units per month, but profit has not been reached. The production changed to include the production of parts for digital cameras since approximately 2 years ago.

HOYA had explained in the August 2008 financial results meeting that they were reviewing the production facilities related to the digital camera business where the profits are unable to be met. In the future, they will continue to "rearrange" the production facilities at the Japanese home and to "re-group" and "re-gather" most of the digital camera production at the two plants in the Philippines and Vietnam."

So, after all these reports and happenings, I could only see one message and the attitude taken by Hoya, which is very clear: "Any business units which are not profitable will be executed!". But then there is one big question left and actually there exists a serious contradiction in their philosophy there: The whole Pentax camera business division is actually not profitable by now, thus neither the Philippines nor the Vietnam factories are profitable, very obviously, WHY not close them all together if they just follow the (only) reason they given and told??

To explain, the only answer is that Hoya are *still* interested in the camera business. However, with their shortsighted-ness and mean-ness shown and reluctance to invest and there is actually no commitment and determination of any kind for the camera business and the brand Pentax, I don't think they will ever succeed, or, just survive, for Pentax.

In fact, Hoya should do more to boost sales, but NOT *just* know (how) to cut costs. The key elements to succeed should include smart product ideas, up-to-date R&D and product features and system performance, competitive and comprehensive product lineup, which I think Pentax have none of these by now (Whilst Canon, Nikon, Olympus and Sony all have all or some!) But of course, to have better R&D and a more comprehensive lineup, Hoya needed to INVEST, FIRST! But sadly up till now, they do the reverse, which is the most disappointed thing afterall! Really really sad.. :-(( However, smart and unique product ideas are actually not much costly, but yet, where are those?? Can you see them in their latest digital products??

Now that the Photokina is coming close, Canon already have announced their 50D and Nikon have their D90 (and just earlier the EOS 1000D and the D700 Full Frame have both been marketed too), what Pentax (actually Hoya) are going to offer? Are they really just sitting there and wait to die?