Japan's Fuji Xerox announced yesterday it will invest US$300 million in China within the next three years to establish its direct sales network and training center as its strong commitment to strategic expansion in the Chinese market.

"The funds will be spent on training sales people and setting up technical facilities," said Jiro Shono, executive vice-president of Fuji Xerox Co Ltd.

The direct sales plan matches the company's strategy to move 90 percent of its global production into the Chinese mainland, with 10 percent left in Japan making high-end products.

Shono said the Chinese Government is expected to loosen its policy on controlling direct sales in December.

"If so, we will be able to build a nationwide sales network in China in a short time," he said.

According to Fuji Xerox's development plan, the Japanese company will make China its global manufacturing and sales center, from where products will be sold worldwide.

In April, 2003, the company took a big step in relocating its Asia-Pacific headquarters from Singapore to Shanghai, marking a milestone in its expansion strategy.

"Our business was stable in Singapore, but it grew 27 percent last year in Shanghai," said Toshio Arima, president of Fuji Xerox Co Ltd.

Arima said at present, the company had moved half its production into Shanghai and Shenzhen in Guangdong Province.

The former produces black and white copiers, simple printers and multi-functional copiers, while the latter turns out printers. Its facility in Dongguan, Guangdong Province manufactures parts for them.

Arima said Fuji Xerox will raise its production capacity in China from the current 50 percent to 90 percent by 2005.

Japan will account for the remaining 10 percent to produce super-speed color copiers and high-speed color printers, said Tadahito Yamamoto, executive vice-president of the company, who is responsible for production and technology.

The company put its second plant at Shanghai's Minhang Economic Technology Development Zone into operation yesterday, showing its firm commitment to expansion in China.

The plant, at a cost of more than US$8 million, will produce high-tech digital copiers.

Li Jiehua, vice-president of Fuji Xerox of Shanghai Ltd, said Shanghai plants with an annual capacity of producing 200,000 machines are expected to turn out 160,000 this year as the new facility is put into operation.

The company has the potential ability to expand its annual production to 300,000 machines in two years.

At present, 60 percent of the parts needed are purchased locally, 20 percent come from other parts of China and 20 percent come from Japan and Singapore.

Li said 90 percent of Shanghai's production is exported mainly to Asian countries, also Australia, the United States and Europe. Only 10 percent is sold locally.

Fuji Xerox now accounts for a 14 percent share of China's market, he said. Its major competitors such as Canon and Ricoh are from Japan.

"They are also making efforts to expand their share in the China market by enlarging production," he said.

(China Daily November 2, 2004)