SCIENCE/TECHNOLOGY : C. Itoh Electronics of Irvine Restructuring in Bid to Boost Profits
C. Itoh & Co., the Japanese trading company, boasts $184 billion in annual revenue, with its Irvine-based U.S. electronics subsidiary accounting for a mere $600 million. Small potatoes in the corporate stew, perhaps, but $600 million in revenue is not bad for an operation with just 155 employees.
But the formula that has enabled C. Itoh Electronics to prosper--marketing computer printers and terminals manufactured by other Japanese companies--apparently is not working quite as well as in the past. Shoogo Homma, who was named president of the U.S. unit in January, said profits last year were very thin, though he would not disclose an exact figure. The company has begun a major restructuring designed to trim money-losing businesses and tighten relationships with key Japanese manufacturers.
As of March 1, what was once C. Itoh Electronics Inc. became three separate companies: C-Tech Electronics Inc., CIE America Inc. and Image Systems Inc. C-Tech, a joint venture between C. Itoh & Co. and Tokyo Electric Corp. (TEC), will market personal computer and office printers manufactured by TEC. CIE America will focus on heavy-duty printers built by Citizen Watch Co. and handle sales and licensing of disk drives, terminals and other products. Image Systems will concentrate on high-resolution printers made by Olympic Optical Co.
The major goal of the reorganization, according to Marc Liebesman, vice president of sales, is to create stronger relationships with the manufacturers, which officials hope will result in faster product development and better customer support. The three companies will begin some product engineering in the United States to better respond to the U.S. market. Unprofitable products will be dropped. One example are the firm’s terminals that art compatible with Digital Equipment Corp. computers.
C. Itoh is not looking for an overnight turnaround, Homma said, just gradual progress in making the unit more profitable. And a manufacturing presence in the United States, which could put the firm on a more equal footing with such competitors as Epson Corp., is considered unlikely at present.
