Camera and printer giant Canon Inc said it will buy back more shares this year if the price falls, in keeping with its strategy of having treasury stock on hand in case an attractive acquisition target comes along.
It will also build a new cartridge plant in Europe and boost its sales force in Asia to more than 10,000 as quickly as possible from the current 3,000, to take advantage of the region's rapid economic growth, Chairman Fujio Mitarai said in an interview.
He also said there were no plans to change the company's 25 percent stake in Hitachi unit Hitachi Displays. Media have reported that Foxconn subsidiary, Hon Hai Precision Industry Co, was planning to invest more than $1 billion in the unit, reducing Hitachi's holding.
Canon already holds about 100 million of its 1.3 billion shares and adding to this only makes financial sense, Mitarai said. "Looking at interest rates rather than keeping money in a bank, it is more profitable to buy back shares so that you don't have to pay dividends."
When asked about specific plans for the financial year that began in January, he declined to give a target percentage, but said: "If the share price goes down, of course we will buy them."
Canon is keen on possible acquisitions, particularly in medical and industrial equipment, as it works towards an ambitious target of returning profits to their 2007 peak of 757 billion yen ($9.1 billion) in 2012. It expects to have made 390 billion yen in the year just ended.
Canon executives nailed down the specifics of a 5-year corporate strategy earlier this month and Mitarai said capital investment would be at least 1 trillion yen over the five-year period, at a pace of about 200-300 billion yen annually.