BenQ to sell digital camera business

Brandname Electronics manufacturer BenQ Corp (明基) yesterday announced that it will sell its digital camera business to Ability Enterprise Co (佳能), a leading local contract camera maker.

The announcement came as no surprise to analysts as the industry had speculated last month on the possibility of the acquisition.

"BenQ needs cash to offset its losses," said Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).

Shares of BenQ closed unchanged at NT$12.15 on the Taiwan Stock Exchange yesterday.

BenQ said in a statement yesterday that Ability had agreed to acquire BenQ's digital camera-related assets, including manufacturing equipment and materials at the book value determined on June 30, the day the deal closes.

The electronics maker did not provide any figures about the deal, but said that approximately 70 employees, mostly research and development staff within the digital camera business unit, would be joining Ability starting on June 1.

"Digital cameras are one of our most important and profitable product lines ? Ability will remain as our important strategic suppliers for future BenQ branded digital cameras," BenQ company president Sheaffer Lee (李錫華) said in the statement.

The disposal of its digital camera business came after BenQ sold its optical disk drive unit to local rival Lite-On Technology Corp (建興電子) last June for about NT$6.2 billion in cash and stock, in a move to further separate brand and contract manufacturing businesses.

Ability, which is one of BenQ camera's outsourced makers, also produces cameras for Samsung Electronics Co of South Korea as well as Casio Computer Co and Nikon Corp of Japan.

BenQ -- which has posted five consecutive quarterly losses -- saw a record loss of NT$27.6 billion (US$825 million) last year after failing to turn around the unprofitable handset unit purchased from Siemens AG.

Last month, BenQ also sold shares which it owned in both AU Optronics Corp (友達光電) and Taiwan Fixed Network Co (台灣固網) to raise cash.

According to SinoPac's Yu, digital camera volumes of BenQ are estimated at around 300,000 to 500,000 units a year, therefore the volumes will not be massive enough to serve as a boost to Ability.

Meanwhile, CNA reported last night that BenQ had laid off some 100 employees from its handset making division, mainly marketing and research staffers, without citing sources.

It appeared to come as a surprise to the affected employees who were left with less than 30 minutes to pack up and leave, the report said.