Innotek

Innotek: Reuters reported that Innotek’s key customers such as Panasonic (14% of sales in 2Q 12) has temporarily closed plants in Qingdao, Suzhou, Zhuhai and are currently checking on damages sustained at their facilities as a result of the protests by Chinese nationals in China over heightened tensions between Japan and China in the South China Sea. Another of Innotek’s customer Canon which accounts for 9% of sales was also reported to have closed 2 plants in Guangdong and one plant in Jiangsu while another smaller customer Honda has reported damage to their dealership from fire set-off by protesters and have also closed several of their plants in the past few days. Innotek’s other major Japanese customers include Ricoh (22%), Sharp (4%), Konica (8%), Kyocera (4%), Toshiba (3%), Faurecia (3%) and Imasen (4%) may also have been negatively impacted although the actual impact may not be known for a while. Innotek was negatively impacted last year by the Japanese earthquake and supply chain disruptions by the flooding in Thailand and swung into a loss of $1m from profit of $14.5m. And this year its key Japanese customers have been losing market share to competitors from US, China, and Korea partly on the back of the strong JapaneseYen as well as losing competitiveness. The latest tensions between China and Japan will add to problems for Innotek.