Sharp Middle East FZE, in a meet where distributors, business associates and members of the media were present, unveiled a number of initiatives focused on regional expansion, with a view to strengthen its foothold in Middle East and Africa. The company also revealed its global brand strategy as well as details of the Kameyama 2 LCD plant in Japan, which started operations recently – the world’s most advanced production facility for LCD TV’s.
Takashi Nakagawa, Corporate Executive Director and Group General Manager of the International Business Group at Sharp Corporation, Japan, who was present at the meet held in the Creek Ballroom at Park Hyatt Dubai on Tuesday, gave an overview of Sharp’s global growth. “For fiscal year 2005, net sales were almost 2.8 trillion yen (approximately 89 billion dirhams), up 10.1% over the previous year, with operating profit of 163.7 billion yen (approximately 5.2 billion dirhams), an increase of 8.4% over the previous year. Both sales and profits are at record levels. For fiscal 2006, our goal is net sales of 3 trillion yen (approximately 96 billion dirhams) and operating profit of 180 billion yen (approximately 5.8 billion dirhams) for the company as a whole, again, both record levels.”
Total worldwide demand for LCD TVs is skyrocketing based on the shift to digital-format broadcasting and reductions in retail prices. In 2005, worldwide demand was 23.6 million units, up 120% over the previous year. In 2006, demand is expected to grow to around 42 million units, up 80% compared to the previous year. To respond to such demand, Sharp launched operations in August at a production facility that uses 8th-generation glass substrates, the first such plant in the world.
“This Kameyama Plant No. 2 is using 8th-generation glass substrates, the world’s largest in size, and ideal for efficiently fabricating large LCD panels in the 40- and 50-inch range,” said Nakagawa. “This will enable us to maintain our No. 1 worldwide market share (approx. 15%) with sales of 6 million units this year.” The new plant will give Sharp the ability to manufacture 22 million sets during 2008, calculated in 32-inch LCD TV equivalents.
Sharp has been working very hard on several fronts to achieve a “Zero Environmental Impact” status by 2010. This effort has been focused on its production processes, development of eco-friendly products, such as Ecolution – a Japanese-coined combination of ecology, evolution and solution – for its business products, health-conscious products as well as solar power.
“There is no easy way to confidently substantiate our claim of being an eco-friendly brand,” said Tomio Isogai, Managing Director of Sharp Middle East FZE. “From using eco-friendly materials in the manufacture of LCD, to the development of our Ecolution business products, from reducing power consumption at our manufacturing facilities to strengthening our status as world’s no. 1 manufacturer of solar panels, Sharp is genuinely committed to set a benchmark for other global brands to follow.”
Worldwide demand for solar cells in fiscal 2005 was 1,100 MW, an increase of 22.2% over the previous year. This demand is projected to grow to 1,300 MW in 2006, up 18.2% compared to the prior year. To cope with such demand growth, in November of this year, Sharp boosted the production capacity for solar cell fabrication, the front-end process, at its Katsuragi Plant in Nara Prefecture from 500 MW to 600 MW, the world’s highest. “We are also augmenting production capacity for assembling photovoltaic modules, the back-end process, at our facilities in the U.S.A. and the U.K.,” said Nakagawa.
“It has been our belief that to be a powerful brand in a geographic region, we must be committed to making long-term investments there,” said Tomio Isogai. “In view of the growing future potential, Sharp is actively considering setting up collaborations with local manufacturers to start local assembly of CRT CTVs in several parts of the region. Sharp’s plans include building closer cooperation with El-Araby factory in Egypt for local assembly of LCD TV’s. The company also plans to reopen its offices in Saudi Arabia, South Africa within three to six months and possibly within 2007 to open one in Iran,” he added.
Commenting on strengthening its present base, Isogai said: “We have started to initiate Direct Marketing in conjunction with our dealers as well as working closely with them on product customization to meet the local needs. Further boosting investments, in Sales and Service training and marketing at regional events such as GITEX, is also getting more important.” As part of this renewed thrust, the company - in cooperation with El-Araby - will organize a sales expansion meeting for Egyptian products on January 15th 2007 in Cairo. “As the retail markets keep changing and our products get more sophisticated and value-added, it is vital that we provide our customers with best support and care,” said Isogai. “The coming years will further boost this offering, because ultimately, it is the consumer that can make you or break you.”
In terms of business goals, Sharp Middle East FZE aims to reach a sales volume of US$ 500 million in the next 3 years, enabling it to gain a 10% market share in major categories. The company is projecting a sale of 500,000 LCD TV’s in 2010 for the Middle East and Africa region.
