Impact on Office Products Industry from Earthquake in Japan

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Mar 18, 2011

The tragic events in Japan over the last week have left many around the world wondering about loved ones and professional colleagues in the affected areas and how the country will move beyond this crisis. Scattered reports indicate that some of the companies involved in the office products industry have been severely impacted:

Canon reports significant damage to multiple plants and 15 employees injured. The company has suspended nine of its facilities including Utsunomiya Plant, Toride Plant, Ami and group companies Canon Precision Inc., Canon Optron, Canon Chemicals, Fukushima Canon, and Canon Mold. Products affected include toner cartridges, ink tanks, camera products, and other office imaging and camera products. Canon has considered using alternate sites to continue production. The company has also set up an Earthquake Disaster Recovery Task Force, which will draft a recovery plan. Canon will make a donation of 300 million yen (US $3.22 million) to the Japanese Red Cross Society.

Kyocera Mita has confirmed the safety and whereabouts of all of its employees. Facilities other than sales offices, such as manufacturing plants and R & D facilities, are not located in the affected areas. Except for some minor infrastructural problems relating to the uncertainty of electricity supply or logistics, Kyocera Mita reports there are no obstacles to the continuity of its production. 

Mitsubishi Paper Mills has shut down production at three mills: Hachinohe, Kitakami, and Shirakawa. The headquarters in Tokyo, Kyoto mill, Takasago mill, and Tsukuba R & D laboratory have not been affected and are still running. In the mills that have halted operations, the company is estimating the extent of the damage. Mitsubishi Paper Holding (Europe) GmbH and its related companies (Mitsubishi HiTec Paper Europe GmbH, Bielefeld, and Mitsubishi Paper GmbH, Dusseldorf) have not been affected.

OKI reported that there has not been any significant injury to employees and most of its operations have been unaffected. The one exception is its production site in Fukushima, which manufactures certain printers and consumables for the Japanese market, has experienced some damage. After the earthquake, operations were suspended at this plant but have partially resumed as of March 16.

Ricoh has stopped production at five of its manufacturing plants that produce MFPs, printers, projectors, production printers, printer parts, and toner. It is unknown when these plants will reopen and begin operating. Three other plants are partly operating that also do MFPs, printers, parts, supplies, and toner. Challenges to production will be include rolling blackouts and delivery of parts.

Seiko Epson reported damages to several plants and companies in the Tohoku areas. Most severely damaged were Epson Atmix, Seiko Epson Corporation Plant, and the Tohoku Epson Corporation, as well as the Epson Fukushima plant. These facilities were involved in the production of metal powders and parts, crystals, printheads, printer components, and semiconductors. There is no information on when the plants will begin production. No employees were hurt in the earthquake or tsunami. Epson also cancelled its Color Imaging Exhibition which was scheduled to be in Tokyo March 19 to 21.

According to Industry Pulse News, Brother, Fuji Xerox, Panasonic, Sharp, Konica Minolta, and Toshiba did not report any damages or employee casualties, but each OEM is donating between US $600,000 to US $3 million to relief efforts. Many of the companies are also planning to scale back activities to cut back on power consumption which is very limited at this time and also subject to rolling blackouts. The Office Depot Foundation is supporting the National Disaster Help Desk for Business so that companies can find out how to help with recovery and relief efforts http://bclc.uschamber.com/programs/disaster/national-help-desk-business. The Red Cross is accepting donations https://american.redcross.org/site/Donation2?idb=0&5052.donation=form1&df_id=5052. While companies with Japan production plants ascertain the extent of the damage and try to determine when operations can resume, the expected impact in the short term is limited supply of product out of Japan and price increases due to limited supply. The long-term impact is difficult to determine and may depend on how the country will recover from the cleanup of this tragedy and the outcome of the nuclear plants crisis. For the present time, the focus will be on how to best assist the people of Japan that are clearly suffering tremendous hardships after one of the greatest natural disasters to ever strike a country.

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