July 16, 2009
Kyocera Mita Corporation (Kyocera Mita, Osaka Japan, President : Katsumi Komaguchi) entered into a share purchase agreement today with Chungho Comnet Co., Ltd (Chungho, Seoul Korea, President: Dai Young Kang). Kyocera Mita will acquire all outstanding shares of the two document equipment distribution subsidiaries of Chungho.
Kyocera Mita will acquire all shares of Chungho OAsys Co., Ltd and Chungho Document Solution Co., Ltd. By acquiring these two companies as its own sales subsidiaries, Kyocera Mita will be able to drastically enhance its sales activities in Korea which Kyocera Mita has placed as one of its strategic countries in Asia and also strengthen its sales capabilities in Asia together with the Chinese and Indian markets.
Kyocera Mita will have acquired the shares of these two companies by the end of July and will start their operations as its own Korean sales companies.
Kyocera Mita is highly appreciated by the market globally as a manufacturer of information devices that are environmental and cost friendly. With its long-lasting technology, Kyocera Mita keeps replacement parts to a minimum and lessens the impact on the environment in terms of waste disposals. Kyocera Mita has developed its business network mainly in Europe, the US and Japan, but for its further growth, it is essential to develop business in countries with high potentials and in emerging countries, as well as to strengthen the current main markets. Since, Korea is one of the ten largest markets in the world, it is especially vital to develop business further in this country.
Kyocera Mita has supplied OEM document equipments to the Korean market since 1999 only under the brand name of Chungho. In order to expand its document business in Korea in the future, Kyocera Mita decided to strengthen its business base in this country by acquiring the subsidiaries of Chungho. Kyocera Mita intends to market Kyocera brand equipments from October 1, 2009.
The penetration level of internet in Korea is the highest in Asia, and Korea is one of the most advanced nations in terms of network connectivity of document equipments. Therefore, it is important to establish a company structure that can provide not only equipments alone, but also provide solution proposals for improving customers' business efficiencies.
With this acquisition, Kyocera Mita will be able to utilize the nationwide sales and service network which consist of more than 200 dealers, and succeed Chungho's customer base of public sectors and large corporations that have been cultivated by them in the past 10 years.
Kyocera Mita will improve its service quality by serving customers closely and provide them with document solutions effectively.
Recently, MFP sales in the Asian region are growing drastically. Especially in China, India and Korea, their annual growth rates in recent years have been above 10% in sales revenue and 20% in units sold.
Kyocera Mita established sales offices in China and India in January 2003 and March 2008 respectively in order to strengthen its sales forces in the Asian region which is making remarkable growth. These sales offices enable Kyocera Mita to improve service to local customers as well as various supports, including technical support to local dealers. This acquisition is part of its sales strengthening strategy to have a Korean partner joining Kyocera Mita group.
With the new Korean sales company, Kyocera Mita aims to roughly double its sales to 75 billion won (approximately 6 billion yen) by 2012.
Chungho is a Korean listed company established in 1977 with its head office in Seoul, Korea. It now has approximately 600 employees and its consolidated sales amount for the year 2008 was around 123 billion won (approximately 10 billion yen). Chungho is engaged in the "Financial Automation Equipment" business selling mainly ATM and the "Information Device" business selling OEM products under Chungho brand supplied by Kyocera Mita. Chungho markets only Kyocera Mita's OEM products in their Information Device business. Chungho and Kyocera Mita started business in 1999 and have developed a good relationship since then.
The total sales amount of the two companies. Chungho OAsys Co., Ltd and Chungho Document Solution Co., Ltd., in 2008 was more than 25 billion won (approximately 2.8 billion yen) and their number of employees around 100 (sales: 45, service: 35). Please see below for their company profiles.
|Chungho OAsys Co., Ltd||Chungho Document Solution Co., Ltd|
|President||Chi, Chang Bae||Chi, Chang Bae|
|Distribution||mainly to metropolitan area||mainly to provincial cities|