Seiko Epson Corp may be the latest Asian tech company to move more production and brainpower to Europe as manufacturers seek havens from currency bounces, proximity to customers and new pools of R&D talent.
The Japanese maker of home and office printers has already established a beachhead in Italy and may move more manufacturing and design operations to Europe to counteract the effects of a stronger yen, President Minoru Usui said, citing textile printing operations in Italy as an early example of his template for boosting profitability.
The plans are part of a broader push by Asian tech manufacturers - a trend that’s also touched running shoes, toys and bicycles - to move production nearer to customers and take advantage of talent and financial incentives on the Continent.
“In the future it might be advantageous for us to produce close to the main markets, for example in Europe,” Usui said in an interview. “We’re quite heavily exposed to yen fluctuations. Creating product design functions in Europe, Asia, perhaps R&D in America - that’s the direction I want to take the company in, gradually reducing the weight in Japan.”
The European Union and individual countries are promoting manufacturing and R&D incentives for Asian manufacturers to move operations to the region.
Companies including Chinese network-equipment maker Huawei Technologies Co have been recruiting researchers in France amidst an R&D tax credit meant to draw technology and science to the country. In June the company opened a mathematics research centre in the country with 80 Ph.Ds.
Eastern Europe too has been a draw for Asian companies. Taiwanese contract manufacturer Hon Hai Precision Industry Co is investing $100mn through next year to expand and build new R&D and design centres in the Czech Republic.
The European Commission’s Horizon 2020 programme has allocated nearly €80bn ($85bn) over seven years to lure technology and industry jobs to Europe.
Usui said he wants to use a pair of recent acquisitions in Italy that provide clothes printing for the Milanese fashion industry as a model for moving more production, design, sales and service to Europe. “These are functions that were previously in Japan. Over time we will gradually shift to more localization,” he said.
Epson is currently navigating a 2025 financial plan based on boosting profit to ¥200bn and sales to ¥1.7tn ($15.4bn), up from ¥1.09tn last year.
The Japanese yen has risen 4.53% against the euro over the past year, muting profits. Seiko Epson reaps only about a quarter of its revenue in Japan. Sales and support for businesses could also move to Europe or other venues, said Usui, who joined the company in 1979.
Epson, based in Nagano about 100 miles from Tokyo, acquired two textile printing and service companies in Italy in the past two years, and opened a research and development facility in Como. The Japanese company plans to expand from high-fashion printing to more mass-market clothing using specialised inkjet technology, bringing product design with it.
In November 2015, Epson announced a European investment plan targeting 25% regional sales growth in part by opening offices in Berlin, Munich, Lisbon and Madrid. The Japanese company also has ink cartridge factory in Telford, UK.
Epson, the Japanese maker of home and office printers, has already established a beachhead in Italy and may move more manufacturing and design operations to Europe to counteract the effects of a stronger yen.