Epson & Canon Supplies Disruption
30 March, 2011 by
Epson & Canon Supplies Disruption
Jon Cone

Japan’s March 11th magnitude 9.0 earthquake and the ensuing tsunami that wreaked havoc on its coast resulted in a tragedy of an inconceivable level. The deaths, injuries and loss of personal property has impacted the world in graphic detail. It is absolutely heart-breaking. Yet, this event shows the rest of the world the strength and resilience of the Japanese as a remarkable example to aspire to.

While Japan continues to struggle to come to grips with an unfolding nuclear emergency, reports have now been made by many major imaging and inkjet industries that were directly affected by the earthquake and tsunami.

It had a significant impact on the imaging and inkjet industry. It is certain that supplies and inventory will begin to be affected by Arpil/May. Time will be the best indicator of how this tragic event will impact inkjet printing in the USA.

Canon reports that it has suspended operations at several of its factories with no date to resume yet set. Canon said “Damage was significant at Canon Inc.’s Utsunomiya Office and Fukushima Canon Inc”. For both printing and digital imaging, the damage at Fukushima Canon is without doubt the most significant as this manufacturing subsidiary produces inkjet printers, print heads, and ink cartridges.

Epson has reported that four of its plants have been affected by the earthquake and tsunami. The impact on its own print head manufacturing facility is not as severe as Canon Inc’s. Nonetheless, the Epson plants are subject to rolling blackouts because of the loss of power due to the ongoing nuclear crisis.

Both Canon and Epson will most likely be forced to ramp up manufacturing in locations offshore from Japan – and although inventories are not yet affected – it is likely that there will be shortages and price increases. For short term cash problems, it may be possible that existing hardware will be sold at extremely attractive pricing. The tail end of that is creating pre-mature shortages. Only the OEMs can possibly know their strategies. But, keep an eye out for Rebates.

However, the real strain on the inkjet industry is going to be from the many small plants and chemical houses in Japan that provide materials to Canon and Epson. Materials ranging from ink components such as pigments and dyes and other essential chemical agents as well as the polymers and coatings that are used on inkjet media. Many of these companies are either shut down or experiencing rolling black outs.

The strain on the entire industry will be felt at some point. The OEMs initially will feel the pinch. They will have to either raise prices or reduce their expectation of profits. Judging by the excessive amount of profit that they reap from manufacturing ink, they are just as likely not to lower prices as easily as they could lower prices. It might be safe to say however, that inks and hardware prices will rise shortly.

As a USA ink company, we do not expect any delays or slow downs in our own production of ConeColor and Piezography inks. We are not dependent upon Japan for any raw materials. However, we do consider the possibility that many new customers will need to replace their Epson K3 and HDR color inks with a reliable source. So we are ramping up our own ink production efforts for this Spring/Summer so we do not experience shortages for existing and new customers.

For a more detailed analysis click here

Epson & Canon Supplies Disruption
Jon Cone
30 March, 2011
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