Electronics giant plans to expand in the region and become an ecologically viable, zero-impact company
The vision of Sharp Corporation, the Japanese electronic products giant, is clear from the words of Tomio Isogai, the managing director of Sharp Middle East. "To become a company with zero impact on the global environment by 2010" is our vision and commitment to the society, he tells The Busines Weekly. "We want to become the most advanced company in terms of creating and promoting technologies that help protect the environment and carry out product development and business activities in an environmentally conscious manner," he says.
According to Isogai, there are many articles written on the subject as Gulf States are now giving more emphasis on the environment. "Environment protection has become the buzzword in the GCC and we hope to have a good market for our 'green products' in this region," he says.
"We have solar power generation capacity that can control the consumption and wastage of energy. We are still making a negative impact on the environment. Our aim is to make it zero impact," Isogai said.
Kameyama plant
Sharp's Kameyama plant in Japan is the largest and the most advanced LCD panel and LCD TV factory in the world. "We call this the first 'super green' factory of Sharp. At this plant, the wastewater is completely recycled. It has a co-generation system, which uses only environment-friendly gas. The factory has installed solar panels on the roof, which generates the power for its internal use. It has also installed a super conductivity system to save energy. Moreover, with zero emission of waste and reduction in CO2 emissions through integrated manufacturing, it can be rightly called the 'super green factory," Isogai said.
Sharp Middle East
Sharp Middle East is one of the important regional hubs of Sharp Corporation. From this office, Isogai manages the entire Gulf and Middle East region, Africa, Pakistan, Iran and CIS markets.
Though Middle East has not been a focus area for Sharp Corporation till a few years ago, the company is now concentrating more on this fast-developing market and has ambitious plans for the region.
"Our market share in the Middle East currently is roughly five to seven per cent. But my target is to hit 10 per cent by end of next year and then to grow even faster. We are now chalking out a new business model, with new product line, distribution channels and more manpower, besides making changes to general investment plan and advertising. We are running above $200 million in turnover annually. My target is to hit $500 million as soon as possible. I hope we can achieve this in three years," Isogai said.
Sharp Middle East is now taking a very aggressive approach towards new areas and is considering establishing local assembly plants or entering into joint ventures with local manufacturers of consumer electronics. The areas under consideration for this include Egypt, South Africa, Pakistan, Iran and Saudi Arabia. "We may start with manufacturing CRT TVs, which will be followed by LCD TVs later on," Isogai said.
Solar cells
Sharp is the world's No. 1 supplier of solar cells for the last seven consecutive years. "In solar cells, there is tough competition. But we are able to keep our leadership position by developing a more efficient product, integrating new technology into this field. We are not trying to just expand the production capacity, but are developing new technology to consume less and increase the output of power."
The company is creating 'super green' products, which strictly adhere to conservation norms - low in energy consumption, following safety and resource reduction standards, being recyclable, using recycled materials, having long-life and being easy to disassemble. All Sharp products are to become 'green products' as per the Sharp strategy.
Sharp's history
Sharp Corporation was founded in 1912 by Tokuji Hayakawa, who was a mechanical engineer. He invented a mechanical pencil called the 'Ever-Sharp Pencil' that became very popular the world over. The name of the company today and its trademark are derived from this product.
In May 1935, the structure of the company was modified to make it a joint-stock corporation under the name Hayakawa Metal Works Institute Co. with a market capitalisation of 300,000 yens.
Sharp's spirit comes from its founder Hayakawa, who said, "make products that others want to imitate and create new demand and contribute to the betterment of the society". Isogai says "These two basic spirits are the 'DNA' for Sharp people."
Sharp has developed and commercialised so many world's first, or Japan's first, electronic products. For example, Sharp was the first to mass-produce black and white television sets in Japan.
Sharp Corporation has now a capital stock of 20,4675 billion yens as of June 30, 2007. The number of employees worldwide total around 57,100.
The Middle East division has 55 employees and Isogai says he will increase the manpower as the division expands and new representative offices are added.
Sharp is world's No. 1 in LCD technology, having its own eighth generation plant. "We have more than 34 years of experience in development in this field and have the No. 1 market share in Japan with 50 per cent of the total," Isogai says. "This will be the fastest growing category not only in Middle East, but the world over."
In mobile 3G hand sets also Sharp has the No. 1 market share in Japan. However, the company does not play a big role in the Middle East in mobile phones "because of various reasons".
In copiers, colour printers and multifunctional devices, Sharp has the second position in the Japanese market.
In the UAE, the company has made a strategic partnership with AMD, the distributors of Bose speakers. In all the Bose showrooms in the country, Sharp's Acquos TVs are displayed and they are sold along with Bose speakers and amplifiers. "This is only a distribution arrangement. We have not made any collaboration in the development of the product. And it is only for the UAE," Isogai said.
"I am thinking of going to other countries also with this kind of an arrangement. But some major distributors are already dealing with other major brands. In such cases, we can not deal with them," he said.
LCD television sets
Isogai estimates the worldwide demand for LCD TVs to be more than 100 million units a year by 2009. This year, the company is estimated to roll out 72 million units.
Plasmacluster is another unique technology from Sharp that is used in air-conditioners, refrigerators and air-purifiers to neutralize viruses and bad odors. It is based on a unique technology whereby the Plasmacluster ioniser will release ions that will neutralize the viruses.
AgPlus ions are also used to eliminate odors from washed cloths.
Steam oven is another unique technology from Sharp that will replace all conventional ovens. It will cook food material by super-heated steam at 350 degrees centigrade.
Ecolution is another Sharp buzzword, which means ecology and solution for B2B businesses. This concept is applied in colour copiers and multifunctional devices to reduce the usage of toner. The cartridges are smaller and the usage of toner is 30 per cent less than that in conventional copiers.
Expansion plans
Sharp Middle East's expansion plans include development of customised products for the local markets. "We used to import whatever Sharp Corporation designed and produced for Japan, US and Europe markets. Now, what I am trying to do is to make some alterations to the products according to the local needs and taste, and market them as customized products; for example, copiers with Arabic display panels, which we have developed with the help of Cosmos, our local distributor. We launched the product at the last Gitex and we have already received many orders," says Isogai.
Sharp's overall share in Middle East is about five per cent now. Isogai says the company is now focusing on the Middle East as the business growth evolves in the region. "Our focus was mainly Japan, the US and Europe. Between Japan and the US, our domestic market is higher in terms of sales, as well as positioning of the market."
Though volume-wise Sharp is number six, in many categories it is the leading brand in Japan. In the Middle East, Saudi, the UAE and Iran are the top three markets volume-wise, Isogai said.
The Middle East office was opened in 1998 and next year the division is celebrating its 10th anniversary. About the growth of the division, Isogai says, "We have been growing modestly, may be around five per cent. But it has been a steady growth. We did not have any aggressively laid out plans in the past."
But things have changed since Isogai took over in last August. "I have set a clear target to become a very prominent player in the region and to be different in strategies, as we care for the environment and health. I have put a lot of emphasis on the local market than the export market now."
Challenges ahead
Isogai admits that Koreans are also concentrating on this region, investing heavily in advertising and marketing. But with the kind of unique products that Sharp has developed, he hopes to significantly increase the market share.
Another challenge is that the technology is getting more and more sophisticated. "Sometimes it's confusing and sometimes it's complicated. The challenge is how we deliver and transfer our technological message to the normal consumers and get the most out of its advancements. Consumers have to be educated. If they don't understand the technology it's a waste of money and effort. If you buy a mobile phone with many features and use it to just make calls, it's a waste of money. We are trying to give more training to the dealers and sales people," Isogai said.
Future prospects
Isogai says the prospects for electronics retailing in the UAE looks very positive and "I think a steady growth of more than 10 per cent is almost promised for the next 10 years. With the increase in population both resident and tourist it is really a market with high potential."
Isogai says the company will aggressively expand its solar cells business in the Middle East. "Now we are talking to Abu Dhabi and Dubai governments and some of the major construction companies to start projects for solar energy generation and the responses have been very positive. In the next couple of years you will see more solar energy-related projects in the region," he said. "All energy-saving and environment-friendly products should be promoted, especially in the construction sector."
Social responsibility
Sharp is in the forefront when it comes to social responsibilities. Sharp Middle East made significant donations to the Omani Charitable Trust after the Gonu disaster. "We have started taking part in many social activities. Recently, I made myself present in the last Dubai Women's Cultural Forum to make a speech on environment and technology. Whenever it comes to certain contributions that we can make, we will not hesitate. That's another mission that I have here," Isogai said.
By Pradeep Palat
© The Business Weekly 2007
