Fujifilm's expenditure will increase to $12.3 billion, with a focus on areas such as chip materials
Maggie
April 18, 2024
Recently, Fujifilm Holdings announced that the company will invest 1.9 trillion yen (12.3 billion US dollars) in healthcare, chip manufacturing materials, and other growth seeking areas over the next three fiscal years. These funds will be used for capital expenditures and research and development expenditures for the fiscal year ending in March 2027. Compared to similar appropriations in the previous three fiscal years, this expenditure increased by nearly 30%.
Public information shows that Fujifilm's healthcare business accounts for over 30% of the group's revenue, ranking second only to its innovative business responsible for printers and other office equipment. But with the paperless workplace, office printers are facing pressure. Camera is another long-standing business of Fujifilm, which has now been replaced by smartphones.
Faced with these unfavorable factors, Fujifilm is vigorously developing its healthcare business, especially in the contract development and manufacturing (CMDO) of biopharmaceuticals. By 2028, Fujifilm will invest approximately 700 billion yen in CMDO. This expenditure will expand manufacturing capacity five times from its current level.
For chip manufacturing materials, Fujifilm will invest in advanced wafer polishing compounds and other products. Fujifilm's goal is to increase sales in the healthcare and electronics sectors by 20% to 30% by fiscal year 2026. The electronic field includes chip manufacturing materials.
Its comprehensive income target for the fiscal year 2026 is set at 3.45 trillion yen, an increase of 17% compared to the fiscal year 2023. The operating profit for the same period is expected to increase by 30%, reaching 360 billion yen.
Fujifilm President Teiichi Goto believes that the multifunctional printer business can bring cash to investments. Despite concerns about the long-term prospects of these devices, Fujifilm believes that by bundling them with office efficiency solutions and consulting, stable profits can be generated.
Fujifilm will streamline operations to reduce costs. Fujifilm Business Innovation (formerly a subsidiary of Fuji Xerox) is in talks with Konica Minolta to establish a joint venture and merge global component procurement functions before September. Fujifilm's camera business will focus on Instax primary imaging cameras and other less competitive fields. These efforts are expected to generate an operating cash flow of 1.87 trillion yen, which will be used to fund investments.
