Canon announces expansion on Peninsula, adding 1,000 jobs

NEWPORT NEWS

Canon Inc. said Thursday that it will invest nearly $650 million and create more than 1,000 jobs in Virginia, mainly at its existing operation near the Oyster Point Road exit off Interstate 64.

The expansion by the Japanese manufacturer of cameras, printers and other electronic devices will occur over the next five years. It is one of the largest economic development announcements in recent history in the state, surpassing the $450 million marine cargo facility that APM Terminals opened in Portsmouth last year.

Gov. Timothy M. Kaine joined Canon executives and other local officials in making the announcement in a packed auditorium at Christopher Newport University.

Canon will invest $623 million in three projects in Newport News, where it has had a 23-year presence. The expansion includes:

n Building a 700,000-square-foot facility to make toner cartridges for laser printers;

n Expanding its repair facility for digital consumer products, primarily cameras and ink jet printers;

n Creating a center for researching and developing automated and robotic manufacturing technologies.

Those projects will generate about 1,035 jobs.

Canon also will expand its Industrial Resource Technologies Inc. subsidiary that recycles toner cartridges in Gloucester County. Its $20 million investment there will create about 30 jobs. Canon current ly employs more than 1,500 people in Newport News and Gloucester.

"Canon is leading the way and reversing an industry wide trend by bringing manufacturing back to the United States," said Takayoshi Hanagata, the president and chief executive of Canon Virginia Inc., which oversees the local operations.

Though much manufacturing has left the United States in recent decades for lower-cost locations overseas, Canon's automated production systems lessen the effect of labor costs, said Tsuneji Uchida, president and chief operating officer of parent Canon Inc.

Growing demand for toner cartridges and Canon's recent decision to start repairing its own electronic devices led to the expansion, according to Hanagata and Uchida.

Canon chose Hampton Roads mainly because of its "good relationship" with the local community, said Uchida, speaking through a translator. Virginia, Newport News and Gloucester County have provided support far superior to that of other locations where Canon has facilities, he said.

The state plans to provide about $27 million in grants for the projects. The money is warranted by the size of the investment and number of jobs being created, Kaine said. Canon also will be eligible for benefits through a state "enterprise zone" program, he said.

Environmental factors also played a role in Canon's decision. Canon wanted to put the operation somewhere in North America to keep production close to consumption, reducing air pollution caused by transportation, Uchida said.

The new workers will be paid an average annual wage of $40,000, said Florence Kingston, director of development for Newport News.

To provide Canon with 880 skilled workers, the Virginia Community College System and Thomas Nelson Community College in Hampton have formed a training alliance.

Kaine said the investment by Canon shows that Virginia is a "global player" in economic development. Citing the state's educational system, the port of Hampton Roads and Dulles International Airport in Northern Virginia, Kaine said: "We have the resources to play on the big playing field."

Gregory Richards, (757) 446-2599, gregory.richards@pilotonline.com