Sanyo to opt for leaner corporate structure and cut in ad budget

Sanyo Gulf plans to introduce a leaner corporate structure and reduce its advertising budget to cut costs in response to the global economic crisis, say officials.

The company is a subsidiary of Japan's Sanyo Electric, which was recently acquired by electronics giant Panasonic. Globally Sanyo has laid off 1,000 employees from its semiconductor division and also faces a reduction in sales in its components business, which includes electronic devices and semiconductors.

The company has forecast lower full-year sales of $190 million (Dh697m) compared to 2007's $201.8m. The operating profit forecast is $3m while the 2007 figure was $7.6m.

Mitsuru Homma, Executive Vice-President of Sanyo Electric and General Manager of the international sales and marketing head office, visited Dubai to launch the company's latest range of dual mode cameras.

"There has been cutting down of staff in the semiconductor division and contracted employees of business units have been terminated on a global level," he told Emirates Business. "But, in the Middle East, there are no such plans to cut staff."

Homma said the Middle East and Africa will be key markets in 2009.

"The sales in the region are expected to increase by 130 per cent in 2008 and 110 per cent in 2009. In 2010 we plan to increase sales by 125 per cent.

"In fact, according to our strategy for 2010 we aim to increase sales on a global level from $220m to $400m, an increase of 182 per cent."

He said Sanyo planned to focus on product lines such as digital movie cameras, environmental technologies such as commercial air-conditioning systems and photovoltaic products and biomedical products.

The company also plans to strengthen its digital projector business in both the B2C and B2B areas.

In terms of sales, it plans to focus on customer relationship management functions in the UAE, Saudi Arabia and Turkey.

In African markets, it plans to collaborate with existing distributors and establish new distribution channels such as trading firms.

Takashi Hirao, Chief Regional Officer, Middle East, Africa and India, said: "There has been a paradigm shift towards hypermarket and power retailer sales in the Gulf Co-operation Council. Dealer market sales contribute to 20 per cent of total sales, while the UAE electronic market is estimated to be worth $3.2 billion annually.

"The MEA market, including Turkey, is estimated to be around $14bn annually. Therefore, the region is definitely growing and contributes at least 10 per cent of global sales. The market situation is getting tough but in spite of this crisis we plan to hit our bottom lines by the end of our quarter ending in March.

"From the Gulf office we manage 79 countries and it becomes a challenging situation, but we are surviving. We plan to cut our advertising expenses and be careful when taking key decisions in regards to expenses."

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