Nikon to shutter its Wuxi camera plant

Due to the drastic reduction in digital camera sales resulting from consumers’ changing habits, leading Japanese digital camera maker Nikon announced on Monday the closure of its plant in Wuxi, Jiangsu province.

Nikon Imaging (China) Co Ltd, which was established in Wuxi in 2002, was responsible for the manufacturing of digital cameras and lens units for digital cameras. The Japanese camera maker has two other digital camera production bases in Japan and Thailand.

According to the company’s announcement, the Wuxi plant has stopped operation mainly due to the rise of smartphones.

“The compact camera market has been shrinking rapidly, leading to a significant decrease in the operating rate at NIC and creating a difficult business environment,” said the announcement.

Public information shows that NIC reported a loss of 31.97 million yuan ($4.81 million) in 2015. Although it managed to register an operating profit of 24.39 million yuan in 2016, the profit is expected to contract to 15.76 million yuan in 2017.

The shutdown of the Wuxi plant is based on Nikon’s global restructuring plan announced last November. Upon this, Nikon will focus more on high value-added products such as optical glass and medical optical instruments.

Nikon’s sales subsidiary in Shanghai continues in full operation. Meanwhile, China’s position as one of its most important markets in the world will remain unchanged, according to the announcement.

A total of 2,268 employees working at NIC will be affected by the shutdown, according to Luan Xiaofei, media specialist at Nikon China. Since Nikon has been undergoing a company-wide manufacturing restructuring, there will be no possible internal transfers and all the related employees will be laid off.

Nikon’s problems are mainly due to the decline of compact digital cameras. According to the Camera & Imaging Products Association in Japan, more than 100 million compact digital cameras were shipped every year globally during the peak time from 2008 to 2011. However, the shipments have now fallen to around one-tenth of that figure.

As a result, Nikon laid off 1,000 employees in Japan late last year, which was around 10 percent of the company’s total headcount in the nation. Canon reported a 10.5 percent decline in its turnover for the 2016 fiscal year. Fellow Japanese camera maker Ricoh said in April that it might close its consumer digital camera business.