Imaging giant Nikon is closing one of its manufacturing centers. On Monday, October 30, Nikon announced the closure of the subsidiary Nikon Imaging China Co. Ltd. (NIC) as part of a restructuring process that began last November, citing a shrinking demand for compact digital cameras. At the same time, the company announced an updated financial forecast with higher-than-expected profits.
The China-based subsidiary manufactured compact cameras and lenses. “In recent years, however, due to the rise of smartphones, the compact digital camera market has been shrinking rapidly, leading to a significant decrease in [the] operating rate at NIC and creating a difficult business environment,” the company said in a statement.
The move is part of the restructuring plan the company announced now almost a year ago. The restructuring plan introduced a focus on more high-end cameras, and closing a plant that manufactured compact cameras falls in line with that goal.
Nikon says that only the manufacturing subsidiary is closing — China is a large market for camera sales and the company’s sales subsidiary in Shanghai will continue its usual operations. Other manufacturing and sales subsidiaries in China will remain, and only the NIC is affected, the company says.
NIC launched in 2002 and as of September 30 employed 2,285 people. Nikon did not comment if any of the employees will be relocated.
Because of that closure, Nikon adjusted its predicted earnings for the current fiscal year. The adjustment includes a 7.7-percent increase in profit, but with about a one-percent drop in revenue, much of that change is the result of lowered expenses.
Nikon announced a restructuring plan on November 8, 2016, saying that the company was making the decision while still in a financially strong position to adjust to the changing camera market. Since that announcement, the company has created a separate optics division for lenses and canceled the previously announced DL line of advanced compacts.
2018 is the company’s 100th year in business, and that high-end focus led the company to release the 45-megapixel, 7 fps Nikon D850 in August. Nikon hasn’t released sales data on its most advanced camera introduced so far this year, but has apologized after selling out of pre-order stock, suggesting the pre-orders have exceeded the company’s expectations for the full-frame DSLR.