Ricoh is embarking on the Ignite phase of a strategic growth plan that will push revenues from printing to 50% of ¥2.300 trillion (£15.5 billion) by 2023. It is expecting sales of ¥2.04 trillion (£13.69 billion) this year.
The company will achieve the target through expansion into new areas, especially industrial printing where sales this year have reached ¥13.4 billion (£89 million) in the first nine months of the year, development of new services around digitisation of business and bolt on acquisitions have set aside ¥200 billion (£1.4 billion) to fund this.
This expansion comes as the company completes the initial phase of cost saving measures implemented by president and CEO Yoshinori Yamashita over the last year. Some work to shake up US distribution and sales needs to be completed he explained in an address to shareholders. “We will keep up efforts on business process reforms in the next 12 months,” he says. By the end of this financial year, it will have reduced its global workforce below 100,000. And there is a promise to eliminate non contributing products and businesses, starting with some of its smaller printer products.
Last year in spelling out the challenges Ricoh faced, Yamashita said the business could no longer afford to develop and manufacture everything in-house. This was to be a plank of the cost reduction efforts.
The impact is taking effect with sales up 3.2% at the nine-month mark with sales of ¥1,516 billion (£10.2 billion). Printing, excluding office products, accounted for revenues of ¥197.5 billion (£1.3 billion). Within this, commercial printing delivered increased sales of ¥137.7 billion (£924 million).
The focus of this year’s presentation was on measures to grow the business with printing technology to the fore. Yamashita, nodded to the way that print has underpinned the information society. Now it can help companies and society as a whole meet new challenges relating to growing individualisation and sustainability. “This means an expanded role for printing technologies,” he said.
He went on to name textile printing and wallpaper printing (no great demand in Japan, but important in Europe and the US) where inkjet will play a role in both meeting demands for fast delivery of new styles and trends and in improving environmental impact. “Existing technology for textile printing is causing contamination of water and resulting in a large amount of waste water. In wallpaper there are large inventories in the supply chain and 30% of inventory is scrapped each year. Social issues can be solved through printing.”
There were no specific product announcements, but a commitment to spending ¥200 (£1.4 billion) billion on acquisitions to strengthen Ricoh's position in the printing sector. This will be shared between the commercial printing and digital businesses Yamashita said.
The growth will come from the development of industrial printing, decorating non paper substrates. In the longer term industrial printing will produce sensors that can be useful in healthcare and in the same sector, drug delivery can use inkjet style technologies to administer precise inhaled doses.
Ricoh will also develop a strategy linking its office print products to companies in industry in a digital network, automating and digitising how business is conducted. The majority of small business continue to use fax for orders and invoices, he said. Ricoh will provide the same sort of digitisation advantages that larger companies enjoy thorough more sophisticated IT structures. This will involve open platforms for non Ricoh companies to access the print capability via cloud computing.
Growth will come also from the markets and countries where Ricoh is not as strong as it is in Japan, Europe and the US.