Slowing market curtails Canon disbursement

Hung Yen People’s Committee, in a report sent to the Ministry of Planning and Investment (MPI), claims  the Japanese manufacturer has disbursed just $80 million of its promised $128.5 million since 2008, 62.5 per cent.

“Canon has not completed its committed construction and equipment installation needed to run the factory at full capacity,” the committee stated in the wake of the MPI’s requiring local authorities to report the disbursement situation of foreign direct investment (FDI) projects worth over $100 million.

Among four FDI projects in Hung Yen valued at over $100 million each, Canon is the only one that has not followed through on its capital commitment. The others – Hoya Glass Disk, Hyundai Aluminum Vina and Sumitomo Corporation – have successfully followed their timetables.

According to the report, Canon cited the global recession and falling demand for its products as the reasons for needing to adjust its investment plan.

But while Canon blamed market difficulties for the delay of its Hung Yen factory, early this year it inaugurated the second phase of its plant in Tien Son Industrial Park in Bac Ninh province.

The expansion cost $27 million is projected to bring output up to 10.8 million products a year and the factory’s total workforce to 5,400 employees by 2016.

The factory in Tien Son was built in 2007. Over the past seven years, Canon has increased production at this factory from two million to eight million products per year.

Canon entered Vietnam in 2001 with its first investment in Thang Long Industrial Park in Hanoi. To date it has committed around $400 million to build four factories in Vietnam, one in Hanoi, two in Bac Ninh, and one in Hung Yen. Most of its products are for export.

Canon started production at the Hung Yen factory in 2010, two years after receiving its investment certificate, and the facility employs more than 1,100 workers, according to Hung Yen’s People’s Committee.