Misery mounts for Japanese camera industry as flood effects start to bite

Steve Dinneen
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OLYMPUS has grabbed the headlines for all the wrong reasons, but it is not the only struggling Japanese camera-maker.

Canon was yesterday forced to slash its outlook following damage to its supply chain caused by the Thai floods. Thailand has become a major manufacturing base for Japan's high-tech sector, with rivals like Sony Corp and Nikon Corp both forced to close their plants.

Canon said its exposure will hit its full year revenues by more than £410m and profits by £164m.

Canon cut its annual operating profit forecast by five per cent to £2.94bn, blaming a combination of the floods and the strong yen, as well as the bleak economic outlook in the US and Europe. The figure was partially offset by cost-cutting and a faster-than-expected recovery from the March earthquake.

Nikon, which has been hit even harder by the flooding, is due to announce earnings next month.

Meanwhile, the former chief executive of Olympus said yesterday he is in contact with the FBI, which is probing massive advisory fees linked to the Japanese company’s takeover of a British rival.

Since being ousted as chief executive, Michael Woodford has called on authorities in both the UK and Japan to investigate the payments. The scandal has wiped out more than half of the firm’s market value.