Nikon Closes a China Factory as Picture Worsens for Digital Cameras

Japanese camera producer Nikon Corp. has decided to shut down one of its plants in China as the global camera market has been impacted by the improving capabilities and popularity of smartphones.

Nikon announced Monday that it would end the operations of Nikon Imaging (China) Co. Ltd. (NIC) in Wuxi, East China’s Jiangsu province, which has 2,285 employees.

NIC, established in 2002 as the company’s first plant in China, manufactures digital cameras and lens for those cameras.

“Due to the rise of smartphones, the compact digital camera market has been shrinking rapidly, leading to a significant decrease in the operating rate at NIC and creating a difficult business environment,” Nikon said in a statement.

Total shipments of digital cameras worldwide slid 31.7% to 24.2 million last year, according to the Camera & Imaging Products Association. Nikon alone reported that its sales from imaging products declined 26.4% to 383.8 billion yen ($3.4 billion) during fiscal 2017.

The move is part of Nikon’s restructuring plan, announced in November 2016, which entails a greater focus on high value-added products.

A Nikon China representative told Caixin that its five other plants, which make medical and industrial devices, will remain in production.

Its Shanghai-based imaging product sales unit, Nikon Imaging (China), will continue full operations as “China’s position as one of the most important markets in the world will remain unchanged,” the company said in the Monday statement.

Sales of all Nikon products in China totaled 149 billion yuan in fiscal 2017, up by 7.7%, making it the company’s second largest market after the U.S. During that period, China was the only overseas market to experience sales growth.

The Nikon representative told Caixin that it has started to dissolve employment contracts, and its arrangements with its workforce have been approved by the local government. The company for now has no plans to transfer the employees to its subsidiaries.

Contact reporter Coco Feng (renkefeng@caixin.com)