Ricoh Company Ltd, the $17 billion Japanese office automation giant, could well make Kolkata its assembling hub for south-Asia.
Ricoh India, the subsidiary, may locate the production and assembling facility of Gestetner India at Salt Lake in Kolkata following the merger of Gestetner with Ricoh.
The shareholders of Gestetner India on Friday okayed the merger of Gestetner with Ricoh at an extraordinary general meeting convened by Gestetner India at Kolkata.
Gestetner shareholders will get six equity shares of Ricoh against one share of Gestetner. Gestetner is also a subsidiary of Ricoh Company Ltd, which now caters to Indian market from its manufacturing base at China.
The company is eyeing the top slot in the office automation industry in India, now held by Xerox, within three years after the merger. Ricoh will invest heavily on brand building in next couple of years to achieve the target.
Norifumi Fukuda, head of Asia Pacific at Ricoh Company, said the company will continue with the facility of Gestetner at Kolkata after the merger.
"Ricoh is not going to sell the facility. Rather after 3-4 years if the volume of our business in South Asia becomes big then we shall use it as our assembly line in this part of the world. This could be an ideal location for us," he said.
The managing director of Gestetner, K Swetharanyan endorsed his views by saying that Gestetner facility at Salt Lake is now engaged in manufacturing of duplicator, which still has good market in Africa.
It will continue to make duplicator as there is a demand from Africa.
"After that it may be converted into the regional assembling hub," he said.
However, Fukuda made it clear that Ricoh does not have any immediate plan to set up any manufacturing or assembling facility here as the volume does not permit such facility.
"The south Asian market, including India, is not big enough at present to justify such move. But in three-four years we might get the required volume," he said.
On the merger of Gestetner with Ricoh, he said the combined entity will have better operational efficiencies as both are engaged in same lines of business.
"There is no point wasting resources for building two brands. The proposed merger will help combine technology and innovation and expand the product range of the merged entity," he added.
Incidentally, the combined revenue of Ricoh India and Gestetner is Rs 140 crore (Rs 1.4 billion), which is only 0.2 per cent of the global revenue of Ricoh group.
The Gestetner MD said Ricoh will soon start spending in brand building to increase the visibility of Ricoh in India.