Glory Targets China, India as Demand for Cash Machines Shifts to Asia

Glory Ltd., Japan’s biggest maker of money-handling machines, plans to expand in India and increase its sales offices in China as demand for the equipment shifts from the U.S. and Europe to Asia.

“The momentum in Asia is completely different,” President Hideto Nishino said last week in an interview at the company’s headquarters in Himeji, west of Osaka. “Economically speaking, the U.S. and Europe still haven’t got back on their feet.”

Glory, which now manages Indian operations from Singapore, plans to establish sales offices in New Delhi or Mumbai as early as next year to meet demand for automatic-teller machines and banknote-counting equipment, Nishino said. Its offices in China will increase to about 40 from 35 this fiscal year, he said.

Asia is compensating for slumping sales in Europe and the U.S., and the region will surpass Europe as Glory’s biggest market in two or three years, Nishino said. Glory is seeking sales abroad after revenue from cigarette-vending machines, of which it is Japan’s biggest supplier, fell about 30 percent in the two years ended March 2010.

The company, whose customers include Bank of America Corp. and Mitsubishi UFJ Financial Group Inc., targets a rebound in annual sales to 170 billion yen ($2 billion) in fiscal 2011 as part of its mid-term plan. Revenue fell 27 percent to 135.1 billion yen over the past two years on lower vending-machine sales and as steps to privatize Japan’s postal-savings banks reduced demand for cash-dispensers.

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Nishino said the company is forecasting sales of 3.5 billion yen in China this fiscal year and expects its annual revenue in the world’s fastest-growing major economy to almost triple within the next two or three years.

Glory, which has fallen 1.9 percent this year, dropped 0.2 percent to 2,021 yen as of the close on the Osaka Securities Exchange on Dec. 10.

Founded in 1918 as Kokuei Machinery Manufacturing, Glory developed Japan’s first coin counter for the Japan Mint in 1950 and later began production of automatic-teller equipment and vending machines, according to the company’s website.

Glory on Nov. 5 reported net income rose 32 percent to 2.94 billion yen for the first half of this fiscal year as sales rose in China and it cut costs by shifting production abroad. China, home to the world’s two largest banks by market value, has a financial market more than three times the size of Japan’s, Nishino said.

“The timing of when companies invest in infrastructure has a big effect on our earnings, and investment in the U.S. and Europe is still being reined in,” Nishino said. “The subprime mortgage loan crisis and problems in Greece and Ireland make the U.S. and Europe difficult markets.”