Pentax 2003 Annual Report Download - page 16

single-focus lenses, for which the technological barriers to entry are low, from manufacturers in China and
Korea, which intensified the competition. In response Hoya strengthened marketing of progressive lenses
and other high-value-added lenses in the seniors eyeglass market, its main target, with the positive result
of strong sales in a domestic eyeglass market that is shrinking overall. The Company won acclaim during
the year under review for new products that balance functionality and price, such as Add Power, progres-
sive lenses that allow the wearer to see objects near at hand, and HOYALUX iD, the world’s first double-
sided aspherical lens. Hoya also developed products designed to increase customer satisfaction,
introducing the SFT Coat, a new kind of coating that offers better smoothness and scratch resistance than
previous coatings.
In the European market, 80% of Hoya’s business is from five major markets, beginning with
Germany and followed by France, U.K., Spain and Italy. Sales were brisk overall, with the exception of
Germany, where the market was sluggish. Sales were particularly strong for progressive lenses and high-
index plastic lenses. During the period under review, Hoya also announced development of SunTech, a
photochromic lens that can be manufactured in the lens processing lab by applying a coating after the pre-
scription has been processed. In October 2002 the Company began a test launch in Europe of Phoenix, an
impact-resistant lens material developed for the U.S. market. Hoya plans to actively market these products
throughout Europe, and expand its lineup of products utilizing double-sided polishing technologies, such
as the HOYALUX iD, which has already been launched in Japan. The Company is also planning to expand
its laboratory in Spain, an area with good market potential.
In the U.S. market, though sales were strong of progressive lenses such as HOYALUX Summit Pro,
sales overall remained on par with the previous fiscal year due to sluggish sales of single-focus lenses,
which command an overwhelming share of the market in terms of volume. The Company is taking steps to
include the U.S. company it purchased in 2000 in its scope of consolidation as quickly as possible, so that
it will contribute to consolidated earnings. New M&A activity included the acquisition of a processing
laboratory in Chicago in February 2003. Hoya is also planning to introduce the SunTech and SFT Coat
products noted above in the United States.
In Asian markets, the impact of low-priced products such as single-focus lenses has been less than
that in other markets, and bolstered by strong growth in progressive lenses and special order items that
require laboratory processing, the overall market was healthy. In the Chinese market particularly, progres-
sive and high-index lenses sold well. Hoya plans to focus more on this market in the future, and taking
into account the nature of the Asian markets, which recognize more fully the value of high-quality lenses,
expand sales of the coated lenses that set Hoya apart from other Asian manufacturers.
In production, Hoya is transferring its mass production facility in Istukaichi, Japan to Thailand.
The Company is also conducting a review of its plants in China and Hungary, with the aim of clarifying
their roles and increasing efficiency.
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Eyeglass Frames
Hoya produces high-quality eyeglass
frames of superior functionality and
design. Hoya’s technical expertise has
allowed it to develop this business inter-
nationally, where it has a loyal following
of customers who recognize its skill with
lenses and appreciate the value Hoya
offers.
Eyeglass Lenses
Hoya produces a wide variety of eyeglass
lenses, chiefly high-value-added products
such as progressive focus and high-index
lenses. The Company has also developed
a range of coating technologies that have
led to wider adoption of its lenses world-
wide, while earning the respect of these
markets through business development
tailored to specific areas.
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