October 27, 2011: While the picture is still as murky as the waters of Bangkok’s Chao Praya River, the devastating floods in Thailand seem certain to have an impact on supply of popular digital camera models from several leading brands in the lead-up to Christmas.
Nikon and Sony are most severely and directly effected, but locally neither Canon nor Olympus were fully confident in their supply chain this week.
Nikon has been hardest hit by the flooding, with its factory at Ayutthaya, where it makes most of its interchangeable lens cameras, closed since October 6.
Nikon reports that ‘the 1st floor of all buildings at the premises are presently submerged and the water level is as high as around 2 metres.’
Nikon says there is no immediate prospects of re-starting operations.
‘We still have difficulty to grasp the overall damages of our equipment and facility since access to the premises continues to be prohibited,’ said a Nikon statement.
‘We are unable to define how soon operation will be resumed. It will take a certain time before the situation normalises including completion of water pumping out from the Rojana Industrial Park,’ the statement continued.
Nikon is considering the purchase of new manufacturing equipment as a means of resuming camera production – and indication of the severity of the problem for the company.
There is no current estimated time at which full production will recommence, and Nikon Australia declined to make any comments on supply for the Australian and New Zealand markets.
One bright spot for Nikon and its supporting retailers is that the new Nikon 1 range of mirrorless interchangeable cameras is manufactured in China, so shouldn’t be effected.
Sony Corp manufactures all of its digital SLR cameras as well as the interchangeable lens NEX series in the same industrial district. .
‘Operations of our factory in Thailand have been temporarily suspended due to flooding, supply chain and transportation difficulties,’ a Sony spokesman said in a statement last Friday.
‘The affected factory, Sony Technology Thailand – Ayutthaya (STT-A), manufactures Alpha/NEX camera bodies and interchangeable lenses. As a temporary emergency operation, Sony is planning to move production to another facility in Thailand that was unaffected by the flood. We’re currently investigating the overall impact on supply chain and future product shipping.’
The release of the new NEX 7 and NEX5n cameras, scheduled for November 11, has been postponed indefinitely.
Sony also said the (Alpha) A65 DSLR camera body, zoom lens kit (SLT-A65VK), and double zoom lens kit (SLT-A65VY) have an unknown release date.
Sony also manufactures some Cyber-shot cameras in Ayutthaya, with reports that it is considering moving production e to Sony’s China and/or Japanese facilities.
Sony Australia told Photo Counter: ‘Our digital imaging marketing teams from both Australia and New Zealand are currently in Japan and are being briefed on the situation and the impact of the disaster.
‘Undoubtedly, there will be some impact; however at this point in time, we can’t be any more specific.
‘At this point in time, the restart date has not been confirmed.’
Canon head office in Tokyo has dispatched a ‘recovery task force’ to Bangkok in a bid to alleviate the impact of flooding, which led to the closure of two inkjet printer factories.
‘Canon has established a recovery task force in Bangkok to take prompt action and consider options such as the temporary transfer of production with the aim of preventing any impact on the market,’ Canon told UK enthusiast magazine Amateur Photographer.
The statement did not indicate where production would be transferred to while the factories, also located in the Ayutthaya Province, are closed.
Camera supply could be also impacted due to camera parts suppliers being flooded. The company has cut its financial outlook below expectations, citing the impact of the Thai floods and a strong yen.
Canon said that it was trying to obtain parts from other suppliers, year-end sales were bound to be affected. It said the floods will bite into annual sales by 50 billion yen and operating profit by 20 billion yen.
Estimated sales of compact camera have been reduced from 20 million to 19 million, while DSLR sales have been revised down by 100,000 units.
Estimates about Thailand ‘include the worst possible impact’ from the floods, and Canon will make efforts to reduce such impact, a Canon executive vice president, Toshizo Tanaka told reporters in Tokyo.
‘It may take more than several months’ to resume production in factories in Thailand,’ he said.
Locally, a Canon Australia spokesperson told Photo Counter: ‘It’s too early to know the impact on supply for our market.
‘As it stands, we have stock to cover our near-term requirements. Beyond this, a dedicated task force is working to quickly understand the situation in Thailand and minimise any disruptions to Canon’s production.
‘As we did with the tsunami disaster, we are working with our retail partners to keep them up to date with developments as they come to hand.’
Olympus Imaging Australia managing director, Marc Raddatt, told Photo Counter that the company was ‘less effected but still waiting for final confirmation on all components.’
He noted that even if the Olympus supply chain was not troubled by the Thai flooding, it would be challenging to source any extra stock for the local market, with some popular models already on back order.
‘I am in Tokyo now, so my goal today is to secure stock from the global allocation.,’ he said.