Konica Minolta: toner issues result in near-£40m order backlog
Tuesday, November 2, 2021
Konica Minolta has a ¥6bn (£38.6m) order backlog at its Professional Print division because of the current hiatus in toner manufacturing – but the group said the toner supply shortage was “expected to be resolved at an early stage” with priority being given to existing customers.
In its half-year results for the six months ended 30 September, KM said that at its Professional Print wing, sales for colour models at its production print operation were up 103%, while monochrome devices were up 100%.
“Due to the explosion accidents at Tatsuno Factory, undersupply of toner incurred delays of sales activities and shipping. Therefore, the order backlog amounted to 6bn yen,” the firm stated.
KM said that because of the Tatsuno shutdown, toner production volume was expected to be about 75% of the actual demand “during the period from the plant shutdown to restart of operations under a new production system and the recovery of production capacity”.
The issues at Tatsuno also had knock-on effects at its Kofu facility where toner production was also halted while an investigation was carried out.
“Therefore, especially in the Professional Printing Business, sales of new equipment and non-hardware is expected to be affected since toner will be supplied on a priority basis to existing customers,” KM stated.
The Tatsuno factory, which makes the Simitri toner used in KM's high-end colour devices, is set to restart production on 8 November. Kofu began operating again on 18 October.
There was better news at KM’s industrial printing operation, where sales are up including what it described as a “remarkable recovery” in digital embellishment printing.
“In the industrial print unit, as for non-hardware, revenue of label printing and textile printing went up due to a steady recovery of the demand of commodities and European apparel market,” KM stated.
The group also cited increasing printing volumes at commercial printing companies, where the operating rate (printing volume per unit) of “highly efficient inkjet digital printer went up”.
“The recovery in printing demand led to a remarkable recovery of demand for large digital embellishment printing equipment, digital textile printer, digital inkjet printer, and label printer.”
Sales at the Professional Print business unit were up 27.3% at ¥93.5bn, while the operation was back in the black, filing operating income of ¥1.4bn compared with an operating loss of ¥8.7bn the prior year.
The overall Konica Minolta group was also impacted by the global supply issues affecting semiconductors, as well as other raw materials.
“The Digital Workplace Business is expected to be affected by the supply of the company’s products to customers in the second half of the current fiscal year as it is expected to remain at about 70% of the actual demand,” KM explained.
As a result of the various challenges across its operations, the Japan-headquartered manufacturer has cut its sales and profits forecasts for the full year.
Overall sales at the group are expected to be ¥50bn lower than envisaged, at ¥890bn, while operating profit expectations have been slashed by 66.7%, from ¥36bn to ¥12bn.
KM said it expected the supply chain issues around semiconductors and some other materials (but not toner) to continue into the first half of fiscal year 2022/23.
As part of its DX2022 business plan KM is “swiftly working on two portfolio transformations”, and aims to reduce its dependence on office printing. The group also plans to strengthen its position in growth businesses “such as the Industry Business”, and is also looking to additional M&A and collaboration opportunities.
Its Industry division includes sensing, optical components, and inkjet components.