Scandal-hit Olympus Corp. will reduce its lineup of digital camera products in an effort to return its loss-making camera division to profitability, said Hiroyuki Sasa, who is expected to become the firm’s next president.
The 56-year-old executive, who is the firm’s pick to succeed President Shuichi Takayama after an extraordinary shareholders’ meeting scheduled for April 20, said Monday he aims to unveil a restructuring plan before a regular shareholders’ meeting in June.
Sasa said that while several firms have made proposals for tieups with Olympus to reconstruct its financial base weakened by the loss coverup scandal, it has not ruled out moving forward on its own.
Fujifilm Holdings Corp. has said it proposed a capital and business tieup with Olympus, while Sony Corp. was reported to have a plan to take a stake in the camera and medical equipment maker.
“We are in the midst of studying various possibilities and scenarios,” Sasa said, indicating a decision will not be made until the firm gauges what kind of risks it faces as well as a time frame for possible alliances.
Last year, Olympus was the subject of a scandal after management admitted to hiding ¥117.7 billion in investment losses dating back to the 1990s. Afterward, the company’s consolidated capital-to-asset ratio dropped to 4.4 percent by Dec. 31 from 11.0 percent at the end of March 2011.
Sasa also touched on the need to reform the product portfolio for the company’s imaging business, which consists mainly of digital camera operations. The division is expected to post an operating loss for the second straight year for the past business year to March 31.
“We would like to narrow down our portfolio,” he said, suggesting the possibility of withdrawing some types of inexpensive compact digital cameras amid intense price competition.
Sasa said that by reforming the product lineup, “we can make the business fully profitable.”
However, the company also intends to strengthen its popular mirrorless interchangeable lens camera and value-added products with additional functions such as waterproofing, he said.
Sasa declined to comment on the possibility of forming alliances with others regarding its digital camera business.
But he did say whether Olympus is considering exiting from new operations that are unprofitable and consolidating overlapping businesses among medical and camera operations.
In an effort to prevent any repetition of the investment loss coverup, Olympus will also set up a compliance committee headed by an outside director as early as possible, Sasa said.
The loss coverup scandal came to light after former President and Chief Executive Officer Michael C. Woodford exposed dubious acquisitions by Olympus after his dismissal in October.