Ricoh shifting printer output for U.S. market from China to Thailand amid trade spat

18, May. 2019

BANGKOK, NNA - Japan's leading office equipment maker Ricoh Co. is shifting production of its multifunction printers for the U.S. market from China to Thailand in the coming months in a bid to minimize fallout from the escalating trade dispute.

The decision came after President Donald Trump raised tariffs on an additional $300 billion worth of Chinese goods and took steps to begin taxing nearly all of China’s imports, including multifunction printers, as punishment for what he said was Beijing’s attempt to “renegotiate” already agreed terms.

“Ricoh is trying to minimize the impact of this sanction,” the company said in a statement on Thursday.

“Moving forward, Ricoh will continue to investigate the possible shift of other products and related parts and supplies, with a view to optimizing the supply chain system,” it said, adding that this could include a shift from Thailand to China to produce for markets other than the U.S., as it responds to possible business risks and work to achieve greater efficiencies.

Ricoh has been producing high-end multifunction printers at Ricoh Asia Industry (Shenzhen) Ltd., its Chinese unit, and low to middle-end models at Ricoh Manufacturing (Thailand) Ltd.

A spokesman said the transfer would not affect overall production or headcount at the Chinese unit, as the company is considering relocating to China some products it now manufactures in Thailand.

Ricoh posted revenue of 1.1 trillion yen ($10 billion) in the office printing division in the year to March, of which some 331 billion yen was earned in the U.S. market.

The Ricoh spokesman ruled out the possibility that the move may lead to a further drop in production in China, citing the company’s decision to spend 7.5 billion yen to build a flagship plant in China that will produce office printing products with state-of-the-art robot and automation technology.

According to data released by the U.S. Commerce Department, imports of printers stood at $16.4 billion in 2018, with imports from China accounting for 36 percent and those from Thailand 6 percent.

Trade data from Thailand showed that Thai exports of printers fell 5.2 percent to $754 million in the January-March quarter from a year earlier. Exports to the U.S. dipped 1.1 percent to $216 million, accounting for nearly 30 percent of the drop.

On Wednesday, President Trump signed an executive order escalating his administration's campaign against Chinese telecoms giant Huawei, aiming to eliminate Huawei from U.S. 5G and other networks, claiming the Chinese company poses a severe risk to the integrity of Western technology infrastructure.