{"id":55195,"date":"2023-05-18T09:03:36","date_gmt":"2023-05-18T16:03:36","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=55195"},"modified":"2023-05-19T10:45:44","modified_gmt":"2023-05-19T17:45:44","slug":"breaking-news-toshiba-and-ricoh-reportedly-to-combine-office-production-operations","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2023\/05\/breaking-news-toshiba-and-ricoh-reportedly-to-combine-office-production-operations\/","title":{"rendered":"Toshiba Announces Joint Manufacturing Venture with Ricoh"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

The board of directors for both Toshiba Tec and Ricoh have given the green light to a joint venture (JV) between the companies that will consolidate their manufacturing operations, with an estimated start time of mid-2024. Its formation will create the world\u2019s largest MFP producer, with a 22.2% share of the global market.<\/p>\n\n\n\n

The two companies announced the agreement late Thursday, and Toshiba America Business Solutions President and CEO Larry White provided an overview of the agreement Friday morning during a webinar for industry press and analysts, with subsequent meetings planned for Toshiba dealers and employees. White emphasized that the agreement is not a precursor to a sale, and that both entities aim to maintain their competitive advantages while reaping the economies of scale in manufacturing and future research and development inherent in the JV.<\/p>\n\n\n\n

While White wouldn\u2019t provide specifics as to how long the two companies had been in negotiations, he did note that talks had been ongoing for \u201ca while.\u201d The two companies have partnered on various initiatives through the years: for example, Ricoh manufactures some of the accessories employed by Toshiba, and TABS is a leading reseller of DocuWare, a company purchased by Ricoh in 2019.<\/p>\n\n\n\n

\"\"
Larry White, Toshiba<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cIn the due course of that relationship, conversations began in earnest about forming a joint venture such as this,\u201d noted White, who added that the JV could theoretically include other partners in the future.<\/p>\n\n\n\n

Thursday\u2019s news was prematurely made public following a timely disclosure to Japan\u2019s Nikkei, but the board of directors for both companies quickly approved the measure for JV, which covers the development and manufacture of MFPs, aftermarket toner and barcode products. The deal is pending regulatory approval in multiple countries.<\/p>\n\n\n\n

The why behind the deal was fairly straightforward. White noted estimates that show total MFP placements are expected to decline 3%-7% per year. With skyrocketing manufacturing costs, White felt this measure was the optimal way to address the trend and gain efficiencies and cost savings that would enable both firms to continue aggressive development of new products and software moving forward that would benefit the resellers of both lines.<\/p>\n\n\n\n

What it entails<\/strong><\/p>\n\n\n\n

The following is an overview of the agreement:<\/p>\n\n\n\n

  • By about the second quarter of 2024, the manufacturing of both companies will be combined into a single JV, which will produce products for the respective lines. Products mutually developed under the JV will not be available until 2026 at the earliest. The JV will be managed by representatives from each company and will have a separate board of directors.<\/li>
  • The companies will purchase their products individually from the JV. Both Toshiba and Ricoh will maintain their own software, go-to-market strategies and distribution channels.<\/li>
  • As part of the agreement, Ricoh will have access to Toshiba\u2019s thermal barcode products. The timeline for that offering to Ricoh has yet to be determined. As to resellers having availability to the respective lines, White noted that was still to be determined, but he did expect the JV to expand product offerings in the long term.<\/li>
  • While MFP R&D will be merged, the companies will also maintain separate R&D; for TABS, that relates to IT, UI interfaces and other elements.<\/li>
  • Both companies\u2019 toner manufacturing is included in the JV.<\/li>
  • The deal will not include Ricoh\u2019s scanning technology that it acquired from Fujitsu.<\/li>
  • White doesn\u2019t foresee any issues with other industry partners such as Lexmark, HP, Brother and KIP, nor will it impact TABS\u2019 distribution model.<\/li>
  • The Toshiba Tec point of sale business is not included in the JV.<\/li><\/ul>\n\n\n\n

    \u201cAlthough the basic components of the product will be similar, how we go to market and the differentiation of the product will be key,\u201d White said.<\/p>\n\n\n\n

    The cost-savings benefits are numerous, according to White. The JV\u2019s aim is to increase manufacturing efficiencies and scale; enhance supply chain agility; continuity and cost compliance. It will also streamline global environmental compliance\u2014which has been a factor in increasing costs\u2014and reduce the respective firms\u2019 geopolitical risk. On the latter count, White pointed to how the shutdown in China impacted the activities of component suppliers. The JV also enables TABS to focus on growth areas including its thermal product line, managed print and software solutions, among others, while expanding future product offerings.<\/p>\n\n\n\n

    White believes the possibilities provided by the JV can offer a substantial upside. He pointed to a Deloitte study that noted the average JV participants\u2019 return on equity increased from 1% to 7% above the industry average during a period of four to five years. In terms of success stories, he pointed to a JV (ULA) between Lockheed Martin and Boeing that has enabled it to be more successful in capturing contracts in competition against SpaceX.<\/p>\n\n\n\n

    \u201cThis allows us, if we execute, to have greater flexibility to invest in other areas of future growth for both of our companies,\u201d he noted.<\/p>\n\n\n\n

    White pointed out that, at a combined 22.2% of the global market share (per IDC\u2019s 2022 calendar year estimates), the JV has a 28% volume advantage over second-place Canon. \u201cIt\u2019s going to be interesting to see how everybody else in the marketplace reacts to these types of joint ventures that we form,\u201d White said. \u201cIt\u2019s going to be very important for our business moving forward, and we\u2019re going to see some tremendous economies of scale from this.\u201d<\/p>\n\n\n\n

    White also emphasized the differentiation between the products moving forward, from different sets of solutions and apps to the Elevate Sky suite of products and services embedded into the products. Likewise, Ricoh will maintain its unique solutions within its portfolio of products.<\/p>\n\n\n\n

    Big Picture<\/strong><\/p>\n\n\n\n

    The possibilities the JV has to offer are what excites White the most. While it reaffirms the company\u2019s commitment to the sector while increasing manufacturing efficiencies and synergies, the JV has also shed light on possible joint innovations where the expertise and knowledge of both organizations can be leveraged. The JV should also provide a layer of insulation from future market\/business disruptions. Moreover, the cost savings will enable both organizations to invest in future projects.<\/p>\n\n\n\n

    What the JV looks like today as opposed to three years from now, when R&D-spurred innovations reach the market, is a matter of evolution that will go a long way toward enabling the line carriers of TABS and Ricoh to be better armed in serving the needs of end-users. As White suggested, it could also be a triggering event among the balance of the industry\u2019s technology providers. Savings on manufacturing costs are not insignificant, but the real impact could be in how the JV takes shape over the next five years.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The board of directors for both Toshiba Tec and Ricoh have given the green light to a joint venture (JV) between the companies that will consolidate their manufacturing operations, with an estimated start time of mid-2024. Its formation will create the world\u2019s largest MFP producer, with a 22.2% share of the global market. The two companies announced the agreement late Thursday, and Toshiba America Business Solutions President and CEO Larry White provided an overview of the agreement Friday morning during a webinar for industry press and analysts, with subsequent meetings planned for Toshiba dealers and employees. White emphasized that the agreement is not a precursor to a sale, and that both entities aim to maintain their competitive advantages while reaping the economies of scale in manufacturing and future research and development inherent in the JV. While White wouldn\u2019t provide specifics as to how long the two companies had been in negotiations, he did note that talks had been ongoing for \u201ca while.\u201d The two companies have partnered on various initiatives through the years: for example, Ricoh manufactures some of the accessories employed by Toshiba, and TABS is a leading reseller of DocuWare, a company purchased by Ricoh in 2019. \u201cIn the due course of that relationship, conversations began in earnest about forming a joint venture such as this,\u201d noted White, who added that the JV could theoretically include other partners in the future. Thursday\u2019s news was prematurely made public following a timely disclosure to Japan\u2019s Nikkei, but the board of directors for both companies quickly approved the measure for JV, which covers the development and manufacture of MFPs, aftermarket toner and barcode products. The deal is pending regulatory approval in multiple countries. The why behind the deal was fairly straightforward. White noted estimates that show total MFP placements are expected to decline 3%-7% per year. With skyrocketing manufacturing costs, White felt this measure was the optimal way to address the trend and gain efficiencies and cost savings that would enable both firms to continue aggressive development of new products and software moving forward that would benefit the resellers of both lines. What it entails The following is an overview of the agreement: By about the second quarter of 2024, the manufacturing of both companies will be combined into a single JV, which will produce products for the respective lines. Products mutually developed under the JV will not be available until 2026 at the earliest. The JV will be managed by representatives from each company and will have a separate board of directors. The companies will purchase their products individually from the JV. Both Toshiba and Ricoh will maintain their own software, go-to-market strategies and distribution channels. As part of the agreement, Ricoh will have access to Toshiba\u2019s thermal barcode products. The timeline for that offering to Ricoh has yet to be determined. As to resellers having availability to the respective lines, White noted that was still to be determined, but he did expect the JV to expand product offerings in the long term. While MFP R&D will be merged, the companies will also maintain separate R&D; for TABS, that relates to IT, UI interfaces and other elements. Both companies\u2019 toner manufacturing is included in the JV. The deal will not include Ricoh\u2019s scanning technology that it acquired from Fujitsu. White doesn\u2019t foresee any issues with other industry partners such as Lexmark, HP, Brother and KIP, nor will it impact TABS\u2019 distribution model. The Toshiba Tec point of sale business is not included in the JV. \u201cAlthough the basic components of the product will be similar, how we go to market and the differentiation of the product will be key,\u201d White said. The cost-savings benefits are numerous, according to White. The JV\u2019s aim is to increase manufacturing efficiencies and scale; enhance supply chain agility; continuity and cost compliance. It will also streamline global environmental compliance\u2014which has been a factor in increasing costs\u2014and reduce the respective firms\u2019 geopolitical risk. On the latter count, White pointed to how the shutdown in China impacted the activities of component suppliers. The JV also enables TABS to focus on growth areas including its thermal product line, managed print and software solutions, among others, while expanding future product offerings. White believes the possibilities provided by the JV can offer a substantial upside. He pointed to a Deloitte study that noted the average JV participants\u2019 return on equity increased from 1% to 7% above the industry average during a period of four to five years. In terms of success stories, he pointed to a JV (ULA) between Lockheed Martin and Boeing that has enabled it to be more successful in capturing contracts in competition against SpaceX. \u201cThis allows us, if we execute, to have greater flexibility to invest in other areas of future growth for both of our companies,\u201d he noted. White pointed out that, at a combined 22.2% of the global market share (per IDC\u2019s 2022 calendar year estimates), the JV has a 28% volume advantage over second-place Canon. \u201cIt\u2019s going to be interesting to see how everybody else in the marketplace reacts to these types of joint ventures that we form,\u201d White said. \u201cIt\u2019s going to be very important for our business moving forward, and we\u2019re going to see some tremendous economies of scale from this.\u201d White also emphasized the differentiation between the products moving forward, from different sets of solutions and apps to the Elevate Sky suite of products and services embedded into the products. Likewise, Ricoh will maintain its unique solutions within its portfolio of products. Big Picture The possibilities the JV has to offer are what excites White the most. While it reaffirms the company\u2019s commitment to the sector while increasing manufacturing efficiencies and synergies, the JV has also shed light on possible joint innovations where the expertise and knowledge of both organizations can be leveraged. The JV should also provide a layer of insulation from future market\/business disruptions. Moreover, the cost savings will enable both organizations to invest in future projects. What […]<\/p>\n","protected":false},"author":166,"featured_media":55196,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1650,82,87,1638],"tags":[312,348],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/55195"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=55195"}],"version-history":[{"count":4,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/55195\/revisions"}],"predecessor-version":[{"id":55223,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/55195\/revisions\/55223"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/55196"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=55195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=55195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=55195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}