November 29, 2007 / 2:30 AM / 11 years ago

UPDATE 2-Canon to spend $1.3 bln on toner cartridge capacity

(Adds details, latest share price)

TOKYO, Nov 29 (Reuters) - Canon Inc (7751.T), a leading printer and copier maker, said on Thursday it would spend 140 billion yen ($1.3 billion) to boost its capacity to make toner cartridges in light of robust demand for laser printers.

Consumable items such as toner and related services are an important source of profit for office equipment makers as they generally fetch high margins and provide a constant revenue stream.

Canon does not disclose sales of its toner cartridges, but its laser printer-related revenues, which include toner cartridge sales, totalled 1 trillion yen in calendar 2006, accounting for roughly one quarter of its total sales.

The Tokyo-based company, which competes with Xerox Corp (XRX.N) and Ricoh Co Ltd (7752.T) in copiers and printers, said it would invest 80 billion yen to build a new plant in Hita in Oita prefecture on the southern island of Kyushu by September 2009.

Canon plans to spend another 60 billion yen to lift output capacity at an existing factory in Oita city.

Canon, also the world’s largest digital camera maker whose rivals include Sony Corp (6758.T) and Olympus Corp (7733.T), declined to comment on the specific output capacity of each plant.

Shares in Canon were up 3 percent at 5,850 yen in early afternoon trade, in line with the Tokyo stock market’s electrical machinery index .IELEC.T. ($1=110.01 Yen) (Reporting by Kiyoshi Takenaka and Edwina Gibbs; Editing by Malcolm Whittaker)

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