Sanyo aims to become a carbon-neutral group by 2010

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Despite the economic slump, Sanyo is on track to invest $2 billion (Dh7bn) on clean technologies and is banking on sustainability to gain further market share, the company’s local head of operations told Emirates Business.

Takashi Hirao, Chairman of Sanyo Gulf, said the Japanese electronics giant is also looking to boost business opportunities in Africa and the CIS countries to balance the slowing Middle East and Indian markets.

Another strategy to remain competitive is to keep its product portfolio balanced, while keeping its LCD TV business relatively lean. Even though the LCD TV market continues to grow, the company cannot afford to further gamble in a very competitive market. “The LCD TV business is a very competitive market,” said Hirao. “We are trying to manage this business by being a small and lean outfit, so that even if prices come down, we don’t get hit much.”

Your rival South Korean electronics companies are taking advantage of the crisis by increasing their marketing budgets with an aim to gain greater market share. Are you doing the same?

Not to their level, but we are particularly aggressive in the dual camera market. This is a global movement for Sanyo. At the end of 2008, we had a 30 million-set video camera market, whereas the digital still camera market was for about 120 million pieces. In three years’ time we think the dual camera market size will be 30 million. Sanyo aims to capture 10 per cent of this dual camera market in the next three years.

This year, globally we aim to sell one million sets of dual cameras; next year we are shooting for two million sets and in the third year three million sets, which is 10 per cent of the 30 million. Sanyo will support advertising in this technology at the corporate level.

The Middle East, Africa and the Indian Subcontinent is your smallest market, with consolidated sales of $220m in 2007 or about six per cent of your global sales. But with a number of analysts saying this region will be one of the few growth areas in the world, do you think the region is on its way to a bigger role as far as revenue is concerned?

Yes, it is the smallest, but by adding more business in Africa and the CIS countries this year, Sanyo Gulf could be in the top two or three within the Sanyo organisation. Globally, we have some 20 sales companies. Currently we are at the fifth or sixth spot.

The UAE, Saudi Arabia and Turkey used to be your main target markets. Does that strategy remain the same?

We don’t expect much from the current UAE market – it is a small one. The Saudi market is much bigger. Our headquarters will remain here. It is very convenient geographically. Wherever you want to go, you have to go out from Dubai.

Which among your business divisions is the strongest here?

We are balanced. First, we have the energy business, which includes solar and rechargeable batteries. Second, we have electronics, which includes white goods or home appliances, and the brown goods or TVs, audios, camera recorders, etc. Third, we have commercial and consumer air-conditioners and biomedical equipment under the environmental business. Combining all these technologies, we are a solutions provider in the electronics, healthcare and energy sectors.

Which is the most profitable?

White goods. It has traditionally been very profitable and our brand is very strong in this.

How is the demand as well as the competition in the brown goods business?

It is tough, especially the competition in LCD TVs. But there will be no decrease in demand for TVs. Even though there is a global slowdown, there is only one electronics product whose sales keep growing – and that is TV. Each year, unit-wise, there has been a 15 to 20 per cent increase in LCD TV sales.

Given the growing demand, do you plan to increase your business in TVs?

Our business in LCD TVs is small because it is a very competitive market. LCD TVs are very price-sensitive products and we are trying to manage this business by keeping our scale of operations small, so that even when market prices come down, we don’t get hit much.

What about the biomedical business? Is there a big demand for it?

It is a stable market. In African nations, especially, it is going to be a big market.

Turning now to clean energy, you mentioned last year there was a shortage of silicon, a major component in manufacturing solar panels.

Yes, but things have changed. Because of the financial crisis there is now a glut – an excessive inventory in the marketplace – because most projects have been pushed back. So, globally, the solar panel business will be 25 per cent down from last year’s level, mainly because the European business is so bad.

Projects in the renewable energy sector are being held back or cancelled. How is this particular sector in Sanyo holding up?

We are getting lots of enquiries. The Omani Government is keen to develop renewable energy, as is the Saudi Arabian Government. So I think 2010 will be the year we can grow more. The decision to put the Irena headquarters in Abu Dhabi shows how keen the Abu Dhabi Government is in promoting sustainable energy and solar energy is one of them.

Is Sanyo’s plan to invest $2bn on clean technologies still on track?

Yes and by the year 2010, Sanyo will be a carbon-neutral company, meaning that any CO2 that we produce in any business activities will be equal to the CO2 we have reduced by our products. We’ll be carbon neutral by next year and by the year 2020 Sanyo has committed to reduce 20 million tonnes of CO2. By then we will be a carbon minus company.

PROFILE: Takashi Hirao Chairman of Sanyo Gulf

Hirao is also the Chief Regional Officer of Sanyo Electric, Middle East, Africa and India. Previously, he was Vice-President, Sanyo Electric and General Manager for Overseas Sales and Marketing Headquarters.

Hirao, 53, joined Sanyo in 1977. From 1980 to 1993, he worked in sales with the company’s North American subsidiaries. After being promoted as Manager of the AV Division in the Sales Department of Sanyo Electric, he guided and led the unit until May 2005. In June 2005 he was made the President of Sanyo Fisher Company (USA), a division of Sanyo North America Corporation, following the merger of Sanyo Sales and Marketing with Sanyo Electric.

He graduated from the Kinki University in Japan in 1977.