Japan's Konica Minolta Holding Co (KMHC) aims to boost its presence in the Chinese market by transferring all its digital camera manufacturing operations to the country.

"This is a firm step the company is takign after the merger of Konica and Minolta early this month," Shigeyuki Seki, senior executive officer of the China Business Section of KMHC, said yesterday.

It aims to increase its sales of digital cameras in the Chinese market from its current 5 percent share to 15 percent by 2005.

"However, the percentage is still low given the growing demand in the Chinese market, which is expected to buy 1 million digital cameras this year," Seki said.

He said the merger of Konica and Minolta will give the manufacture of digital cameras in China a boost.

KMHC completed its merger early this month in response to fierce competition in the world market. It now has 11 subsidiaries in China with more than 10,000 employees and sales of 11.36 billion yuan (US$1.37 billion) last year.

Seki said KMHC will finally move all its production of digital cameras from Japan to China to push forward its expansion plan. But he gave no further details.

"Our goal is to turn China into one of the world's digital camera manufacturing centres," said Seki.

Local insiders consider the merger as a major step for KMHC towards its objective.

At present, its digital cameras are mostly sold in China's coastal cities, said Shinichiro Kuroiwa, president of Konica Minolta Optical Products (Shanghai) Co.

These sales will extend to small and medium-sized cities as well as provinces in Northeast China later, he added.

Kuroiwa said KMHC is building its second factory in Dalian, in Northeast China's Liaoning Province, to produce lenses for mobile phones which will be sold in Japan.

The new factory, with an investment of more than 200 million yuan (US$24 million), will be able to produce about 3 million lenses a year when it starts up this month.

When combined with the output from its existing factory in Dalian, about 5 million mobile phone lenses will be produced in China by KMHC.

"The market for mobile phone lenses has great potential and production will be enlarged as demand grows," Kuriowa said.

All the lenses will be exported to Japan, with some sold locally in the future, he said.

(China Daily October 10, 2003)