Japanese camera maker Olympus Corp announced on Tuesday it will transfer the entire equity of Olympus (Shenzhen) Industrial to Shenzhen YL Technology, a provider of point-of-sale (POS) terminals, for 1.83 billion yuan ($264.9 million), according to a news release from Olympus Co.
The proceeds of the transaction are expected to be recorded in the fiscal year ending March 2020, with the date of transfer expected to occur between April and August 2019, the announcement said.
The Olympus Shenzhen factory is owned by Olympus (China) Co, a consolidated subsidiary of Olympus Co.
Olympus "decided to discontinue operations of Olympus (Shenzhen) Industrial Ltd and concentrate the manufacturing of products relating to the digital camera business into Olympus Vietnam Co," the company said in explaining the reason for the transfer, referring to closure of the factory that began on May 7.
Founded in December 1991 with capital of $70.1 million, the factory manufactured digital cameras and lens units for digital cameras as its core business, according to the announcement.
At its height, the Shenzhen plant once hired over 15,000 employees. After the shutdown of the digital camera in May, the company still operates a plant in Guangzhou that produces microscope.
As the digital camera market has shrunk sharply in recent years due to the popularization of smartphones, Olympus confirmed the output of its Shenzhen factory had greatly dropped. The facility found it hard to maintain its competitiveness in the market as its equipment grew outdated.
"The traditional manufacturing industry must be influenced by the fast development of the digital economy and the internet economy. Such sectors need to upgrade their products," said Dong Yan, a research fellow at the Chinese Academy of Social Sciences.
"It is reasonable for Olympus to move its manufacturing to Vietnam, which has a lower cost of production and abundant young labor," Dong told the Global Times.
Shenzhen YL Technology used to be called NEXGO. It's a POS terminal manufacturer as well as e-payment consultant.
Neither Olympus (China) Co or NEXGO replied to the Global Times about the transfer as of press time.
Olympus is not the first company to have closed a digital camera factory in China. In October 2017, Japanese camera maker Nikon shut its digital camera factory in Wuxi, East China's Jiangsu Province.
Few people have used digital cameras since smartphones seized the market.
The People's Daily cited Japan's Camera and Imaging Products Association in May, saying 100 million mini digital cameras were sold in 2010, but the number decreased to 12.58 million in 2016.
