GROWTH PIVOT
Forbes Indonesia|October 2021
CEO YASUO TAKEUCHI IS LEADING OLYMPUS’ TRANSFORMATION INTO A MEDICAL TECHNOLOGY COMPANY AFTER SELLING OFF ITS LAUDED, BUT MONEY-LOSING, CAMERA BUSINESS.
JAMES SIMMS

Japan’s Olympus Corp. is synonymous with cameras.

From its earliest camera in 1936, Olympus built a reputation for quality and innovation, such as its 1971 model 35DC, the world’s first camera with an automatic flash. Yet that storied legacy came to an end in January, when Olympus finalized the sale of its camera and voice recorder businesses to Tokyo-based private equity firm Japan Industrial Partners for an undisclosed amount. “I have [had] a longtime ambition to really change this company,” says president and CEO Yasuo Takeuchi in an interview at the company’s Tokyo headquarters.

It was a bold shedding of a signature business built up over eight decades. Without cameras, what’s next for Olympus? Takeuchi’s answer: “We have a very good business on the medical side.” Takeuchi is now overseeing Olympus’ most extensive corporate makeover in its 102-year history, with the aim to create a pure-play medical technology (medtech) giant.

This pivot takes Olympus back to its roots. While renowned for its cameras, Olympus has a long and parallel history in medical technology, using its optical expertise to make microscopes and endoscopes. In fact, the first product released by Olympus was a microscope, launched just six months after the company’s founding in 1919. Then came endoscopes—Olympus created in 1950 what it dubbed a “gastrocamera,” a device, while rudimentary, laid the basis for modern endoscopes.

Olympus says it is the world’s largest maker of gastrointestinal end scopes, commanding 70% of the $3.3 billion global market.

Building on that expertise, Olympus says it is the world’s largest maker of gastrointestinal endoscopes, commanding 70% of the $3.3 billion global market for this technology. In the last fiscal year that included cameras (ended March 2020), the company’s two medtech divisions contributed 80% of ¥797 billion ($7.3 billion) in total revenues. The imaging division, which holds cameras, represented just 6% in sales and lost over $1 billion over the previous decade. Now that Takeuchi has jettisoned cameras, the microscope division may be next—as it will be transferred into a wholly owned subsidiary in 2022. All told, Takeuchi is on track to complete Olympus’ realignment to a company focused on endoscopes, therapeutic treatments and surgical technologies by the end of next year.

The reason for this transformation is simple—smartphone cameras have decimated the consumer camera market, negating demand for stand-alone cameras. As for microscopes, now that imaging is gone, this division has become the company’s smallest business, representing 13% of total ¥731 billion in revenues in the latest fiscal year (ended March 31).

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