Above: Left to right, Toshiba Tec President, Hironobu Nishikori; Ricoh Chairman, Yoshinori Yamashita; and Ricoh President and CEO Akira Oyama.
Further contraction in the office technology industry is not out of the question.
Ricoh and Toshiba TEC announced on May 19, 2023, that they have agreed to establish a joint venture for the development and production of digital multifunction printers. Some reports have suggested that this announcement marks the beginning of industry restructuring in the imaging industry. However, other imaging industry OEMs view participation in this joint venture with great caution.
While growth in the imaging industry has become challenging, OEMs continue to generate significant revenue from their MFP and printer businesses. It is only natural that they would be cautious about joining this joint venture. Even if there are OEMs considering participating in the joint venture between Ricoh and Toshiba, it is likely to happen after it begins between April and June 2024, when the specific details become clearer. Even if the market size of the imaging industry were to shrink faster than expected, and self-development and self-production became difficult, OEMs still have the option to source products from other companies and sell them under their own brands.
The Ramifications of the Ricoh Toshiba Tec Joint Venture
The establishment of the joint venture between Ricoh and Toshiba not only aims to prepare for the contraction of the imaging industry but also appears to provide a foundation for both companies to actively pursue new product development while reducing development and production costs by showcasing their respective strengths. It was revealed during a press conference that this collaborative development and production plan originated during the tenure of Ricoh’s Chairman Yoshinori Yamashita as president and chief executive officer, in discussions with Toshiba TEC’s President Hironobu Nishikori.
Chairman Yamashita stated that the joint venture aligns with the growth strategies of both Toshiba TEC and Ricoh, while also contributing to the enhancement of domestic industrial competitiveness. He emphasized that the joint venture is a win-win situation for both companies and expressed openness to participation from other companies. This stance is shared by Ricoh’s Oyama and Toshiba Tec’s Nishikori.
Oyama made it clear that even for the shared MFPs developed and produced by the joint venture, Toshiba-branded MFPs would incorporate Toshiba TEC’s controllers and be sold through Toshiba’s sales channels, while Ricoh-branded MFPs would feature Ricoh’s controllers and be sold through Ricoh’s sales channels. He also stated that the joint venture aims to provide competitive products in terms of quality, cost, delivery, safety, and environment (QCDSE) and that becoming a competitive manufacturing company with a common engine would enable them to gain additional customers and expand their business.
Sharing Knowledge
Furthermore, through the growth of the joint venture, both organizations plan to utilize accumulated knowledge and resources to create new products and edge devices beyond copiers.
Ricoh President and CEO Akira Oyama and Toshiba TEC President Hironobu Nishikori.
In addition, Nishikori outlined the positioning of the joint venture within Toshiba TEC’s business strategy. He referenced the following goals:
- Expand the lineup of high-value-added products and continue supplying them under the Toshiba brand.
- Strengthen growth areas such as integrating barcode printers, RFID, and multifunction printers to create unique solutions that connect offices and work sites.
- Utilize Toshiba Tec’s touchpoints to leverage the strong edge devices generated by the joint venture and become a global top solution partner.
Toshiba TEC’s touchpoints include 59 global subsidiaries (27 in workplaces and 32 in retail), a global installed base of approximately 1.4 million MFPs, and a point-of-sale (POS) system with a global market share of approximately 3.14 million units, and a domestic market share of about 50%. With the goal of becoming a global top solution partner, Toshiba TEC aims to strengthen its global software development capabilities.
Nishikori mentioned that investments are needed in software development, and the company plans to increase the software development team by 30% from approximately 1,300 members in the fiscal year 2022 to about 1,800 members by the fiscal year 2025, with a focus on the United States. Toshiba TEC identifies its unique solutions that connect offices and work sites, such as those in the office, retail, manufacturing, and logistics, as growth areas. The company expects the joint venture to accelerate and expand its growth area business by introducing edge devices and other products.
Both companies have agreed to establish a joint venture with Ricoh’s subsidiary, Ricoh Technology Corporation, as the core. Ricoh will hold an 85% stake, while Toshiba TEC will hold a 15% stake with the goal of realizing the respective benefits previously mentioned. However, details such as additional capital investments and the utilization of factories and facilities are still undecided.
It seems that it will take some time before we can determine whether the establishment of this joint venture by both companies will indeed mark the beginning of restructuring in the imaging industry.
