By Rocky Swift and Miho Uranaka
TOKYO (Reuters) – Printing giant Seiko Epson is betting on growth in the Middle East and Africa as demand ebbs in its home market of Japan and other developed nations, its chief executive said.
The company got a boost in sales during the COVID-19 pandemic as the push toward working from home increased demand for personal printers. But Epson faces long-term stagnation in mature markets as populations decline and digitalisation grows.
The Middle East, Turkey, and Africa were growth highlights in fiscal 2022. So following success it had in India with a specialised subsidiary, the company in August set up a new base in Dubai to directly manage strategy in the region.
“Our products are not yet widely distributed in the Middle East, and there is tremendous potential there,” Yasunori Ogawa said in an interview after the company posted quarterly results on Friday.
Operating profit slid nearly 70% in the three months through September, and the company lowered its full-year forecast to 80 billion yen ($535 million) from earlier guidance of 100 billion yen.
Ogawa said the company expects conditions to improve in the second half as inventory costs abate and a peaking out of inflation stokes consumer demand.
To eke out more growth in developed markets, Epson plans to shift its portfolio more towards commercial and industrial customers looking to reduce waste.
The company’s PaperLab machines, for example, break down used office paper to make blank sheets. The machines are large and are still more expensive to use than standard printers and new paper, but the company is working to bring down the operating cost, Ogawa said.
“We place particular emphasis on the environment and would like to expand the use of products that can contribute to that, though it may take some time,” he said.
($1 = 149.5500 yen)
(Reporting by Rocky Swift; Editing by Stephen Coates)
