Lexmark to close inkjet factory in Philippines

Published:  29 Aug at 9 AM

A fall in sales of inkjet printers has led to US firm Lexmark announcing that it is to close its factory in the Philippines by 2015, which produces inkjet supplies, as well as ceasing to develop inkjet technology by 2013. The moves are being made as the company seeks ways to improve profitability and will cost around 1,700 jobs.

Paul Rooke, Lexmark’s chief executive and chairman, said although the decision had been a difficult one, it had been necessary in order to cut costs and make savings. For the three months ending in June the firm saw its net profit drop 61 per cent compared to the same period last year to $39.2 million.

It is hoped that by closing the Cebu factory and initiating a range of other cost cutting processes the firm will be able to make savings of around $95 million per year. The company has also confirmed that it plans to sell off a number of inkjet-related patents.

Lexmark will continue to concentrate on developing imaging software and laser printers. The inkjet printing business has fallen into decline as more people use social media sites to display their photographs rather than printing them out. The remaining demand will now be catered to by Epson, Canon and HP.

Although Lexmark said it will be taking a restructuring cost hit of some $160 million, its shares are currently trading at $21.62, a rise of 13.73 per cent.