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14
A.We at the Omron Group stated that we will lift
sales in Greater China to US$1,330 million in fis-
cal 2007 and we undertook strategic investment
accordingly. In fiscal 2006, net sales for Greater China includ-
ing the contribution of ECB, which acquired Omron Precision
Technology Co., Ltd. (formerly Pioneer Precision Machinery
Corporation), increased about 1.8-fold to US$726 million
from the previous fiscal year. This surpassed our initial pro-
jection of US$676 million for fiscal 2006, but is falling far
short of our medium-term plan target. However, in our exist-
ing businesses at present, we believe that we can expect
growth of about 30%, and we are still planning on sales of
just over US$1,000 million for fiscal 2007.
Sales aren’t growing as planned at IAB, which is posi-
tioned as our engine of growth. This is the main factor that
is keeping us from achieving our sales plan in Greater China.
IAB’s business in Greater China consists largely of the com-
ponent business, which is conducted through local distrib-
utors. We have been working on developing sales chan-
nels over the past several years and although we have
been able to retain a number of sales distributors and sales
staff above levels called for in our initial plan, the skill level of
distributors and sales staff who provide support for distrib-
utors is still an issue that requires attention. On the other
hand, skills which can be honed through experience are
improving on a daily basis, and now we are beginning to
see results from this improvement. Our customer base is
expanding and we are deepening our business relations
with them. Therefore, although we are trailing behind our ini-
tial sales plan by about one year, we believe that we can
top US$1,000 million in sales during fiscal 2007 and we will
be able to reach US$1,330 million in fiscal 2008.
Q.3Sales for Greater China are trailing behind initial projections noticeably.
Can you please comment on the current situation there and your forecast
for the future?