Konica's business machines division, which has an annual turnover of US $1 billion has now increased its presence in India by setting up a distribution sytem of its photocopiers. Konica's channel into India is through Methodex Infres Ltd, set up in 1987. Though last to enter in this segment, the company plans to grab 10 per cent market share in coming five years, says M. Takahashi, general manager, Asia sales division, Konica in conversation with Kavita Dalal. Excerpts:In wake of sanctions what step will the company take if Japanese government decides to impose it on India?We do not think that we will be affected by the sanctions. By and large the decision of the government will not affect us. Still, if we are forced then at the most the shipment of the hardware will be stopped for a while but we have stocks in advance. Hence, we will be partly affected if there is any decision of the kind.Does Konica has any plans for manufacturing photocopiers in India? We do not planto manufacture in the coming five years. Later, it depends on the circumstances as at present we do not see any advantage in setting up a manufacturing base in India with volumes being very low. After five years we may reconsider our plans. We are already manufacturing in Japan and China. Besides this, manufacturing in India does not make sense as we have studied the local conditions. Hence, we feel it is not worthwhile to invest in India at the moment.Are you satisfied with the prevailing duty structure in India on photocopiers?The duty structure is very disappointing in India and is giving us problems. The present duty is 71 per cent of the cost, insurance, freight (CIF) value (CIF is 115 per cent of the basic value). By the time the machine the reached the customer the price is more than twice of the original cost. For other products like computers it is 10 per cent, while for photocopiers it is almost seven per cent higher. This inhibits the demand for photocopiers due to which the majorityof photocopiers used are reconditioned.How big is the market for photocopier in India?We conducted a feasibility study on the Indian market and found out that the there is a huge potential in India for copiers. Almost all the photocopiers are imported at the moment. The only Indian players manufacturing some models is Modi Xerox still imports the hi-tech models from its parent company Xerox. The other main players present in India are Canon, Mita, Ricoh, Lanier.How many machines do you plan to import and sell in India? What market share do you plan to grab over a period of time?The total market for photocopiers in India is 25,000 machines annually. We expect to grab 10 per cent of the market share in five years time. Konica has imported around 500 machines and the distribution has already started. Institutes like BITS Pilani, Indian Space Research Organisation, various universities have well accepted these machines. At present these are the analog products which will be changed todigital in three years.Is there any threat to you from the grey market in India?Yes, we are likely to face a problem from the grey market. But compared to other players like Canon we think we will be in a better position.We have faith in our distributor as we expect some loyalty from them, which is the only way to encounter this problem.Konica has entered into a tie-up with Methodex for distribution of these machines. What is the nature of the tie-up?We have a tie-up with Methodex Infres Limited having Rs 25 crore turnover. We tied up formally with them in February this year while the talks were on since April 1996. The company is into the business of marketing and distribution of office automation machines and also manufactures document shredders and currency counting machines.Methodex has already started distribution of these machines through direct marketing.
