Fuji Photo sees 05/06 digital camera sales up 21Percent

Japan's Fuji Photo Film Co. said on Wednesday it expects its global digital camera sales to grow 21 percent in the next business year, and unveiled plans to cut production costs by 10-15 percent by using more common parts.

Fuji Photo, the world's fifth-largest vendor of digital cameras, is struggling to maintain profit margins along with other players in the industry due to sharp price falls and slowing growth rates in more mature markets like Japan.

Confirming plans first unveiled by the company in an interview with Jiji news agency, a Fuji Photo spokesman said it would aim to sell 8.5 million digital cameras in the business year starting April 1.

If met, the target would represent a rise of 21.4 percent compared with Fuji Photo's goal of selling 7 million digital cameras in the current year to March 31. It lowered that forecast from 8.5 million units in October due to sluggish demand.

To boost profit margins, Fuji Photo said it would use more common parts to lower procurement costs and would also reduce the number of models in its product line-up to about 10 in 2005/06 from 16 in the current year.

It will try to produce models that can be outfitted with its own charge coupled devices (CCD), image sensor chips that capture light and convert it into electronic signals.

Currently some of Fuji Photo's compact digital cameras use CCD's produced by other firms, slicing into margins.

Fuji Photo also said it was planning to boost production in China to be closer to the country's fast-growing market. It currently makes about one-third of its digital cameras in China but will raise that to 40 percent in 2005/06.

Shares of Fuji Photo were up 1.36 percent at 3,740 yen as of 0524 GMT, outperforming the Nikkei average's 0.08 percent rise.