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January  7, 2002
OLYMPUS REORGANIZES IMAGING BUSINESS OPERATIONS
Sales subsidiary's Imaging & Information Area moves to head office
Strategic integration of manufacturing operations in China and Japan to improve profitability
Olympus Optical Co., Ltd. (President: Tsuyoshi Kikukawa) will reorganize its imaging business operations effective April 1, 2002. The reorganization, which centers on digital camera products, seeks to improve the company's profit structure in two ways. First, by integrating four domestic production centers prior to the startup of full-fledged production in China; and second, by integrating the Imaging & Information Area of the domestic sales subsidiary into Imaging Systems Group at Olympus Optical Co., Ltd.
The reorganization will put in place a new business model that integrates the entire process of development, manufacture and sales. Olympus is seeking faster decision-making, greater accuracy in grasping market requirements, more timely product launches, and more significant cost reductions. In this way, Olympus aims to achieve greater profitability by responding quickly to ever-changing trends in the area of consumer products business such as digital cameras, compact cameras and magneto-optical drives.
The consumer products businesses, which are overseen by the Imaging Systems Group, are subject to fierce competition, which causes prices to weaken. Profitability hinges on how accurately we are able to pinpoint market needs and how quickly we can deliver products that meet these needs at low cost. In light of this situation, Olympus has been working to create a stable profit structure for this area and its mainline digital camera products, as one of the firm's most important management challenge. The fundamental corporate reorganizations planned are projected to make the Imaging Systems Group profitable on a consolidated accounting basis during the year to March 2003.
1.  Improved production system

Olympus will be enhancing its cost competitiveness as a manufacturer by shifting its production base to China and strengthening ties with development and production centers in Japan. This model has already proved successful in the company's conventional film camera business. The "CREATIVE aspects" of the overall production process-e.g. development of production technologies that will allow the quick startup of new production lines--will remain in Japan, while the "PRODUCTIVE aspects"--high-quality, low-cost manufacturing centers--will move to China.
To create the infrastructure for this new initiative, four key domestic production centers for imaging system products--the Olympus Optical Co., Ltd. Tatsuno Plant, the Olympus Opto-Electronics Co. Ltd. Tokyo Plant, Ohmachi Olympus Co. Ltd., and Sakaki Olympus Co. Ltd.--will be integrated into one organization. The new entity will also incorporate the functions of both optical and production technologies. This integration of domestic production and development functions will enable the company to provide more effective support as Chinese production expands at the Shenzhen Plant in Guangdong. The result will be stronger overall production structure both in Japan and China.
2.  Integration of domestic production and sales functions

Olympus will transfer the Imaging & Information Area of its domestic sales subsidiary, Olympus ProMarketing, Inc. to Imaging Systems Group at Olympus Optical Co., Ltd. This area is responsible for consumer products, and the transfer of the business will enhance Olympus' ability to respond quickly to rapidly changing market needs. The integration of production and sales functions will create a new dynamism and faster decision-making, resulting in an organization that is capable of responding more flexibly to rapid changes in consumer preferences, hot-selling merchandise and other market trends.
*Olympus Optical Co., Ltd. was changed to OLYMPUS CORPORATION as of October 1, 2003.
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