Jan 25th - Ricoh To Pour 25% Of R&D Funds Into New Businesses

President Shiro Kondo speaks at a media briefing in New York.

Ricoh Co. plans to channel roughly a quarter of its research and development budget into new areas, such as business-use image projectors, starting with the fiscal year ending March 2012.

This investment will likely come to about 30 billion yen. Ricoh's overall R&D budget is seen rising as high as 120 billion yen, near the level before the global financial crisis, from the 112 billion yen planned for the current fiscal year.

Ricoh also plans to increase the proportion of R&D personnel working in new businesses to about 25%, or more than 900, from the current level of several percent.

Ricoh plans to cultivate new businesses to replace copiers and printers as its key source of revenue. The firm has set a goal of earning about 25% of its overall sales from new businesses by fiscal 2014, up from 15% today.

By focusing on the development of image projectors, Ricoh aims to raise sales in its projector business section to around 150 billion yen in fiscal 2015.

Ricoh projects higher sales in the future.

The company also plans to bolster consulting operations. It hopes to earn annual sales of roughly 8 billion yen in this area by fiscal 2013 by exploiting know-how gleaned from manufacturing office equipment.

The office equipment section generated 99% of overall operating profit for the April-September period. This dependence on a single segment lends support to the view that the firm will be hard-pressed to grow its profit. By nurturing new businesses, Ricoh aims to boost its group operating profit margin to around 10% by fiscal 2014 from the 4% projected for fiscal 2010.