A Transport Ministry study group is urging Japan Freight Railway Co. to further improve its management so it can meet conditions for public listing in five years.
In a report released June 13, the study group set a specific goal for JR Freight, asking that it boost annual pretax profits to more than 7.6 billion yen, a condition for public listing, by fiscal 2001. JR Freight is one of seven JR group companies created after the breakup of the Japanese National Railways. It has been in the red for the past four business years due to stiff competition with the trucking industry. In fiscal 1996, JR Freight suffered a pretax loss of 10.6 billion yen.
The study group was formed last October to discuss ways to improve the firm’s management and achieve full privatization in the future. The group consists of scholars and representatives of JR firms, other ground transportation firms and a financial institution.
Among streamlining measures, the study group called on JR Freight to re-examine its inefficient services and develop new fields, such as transporting industrial and household waste and diversifying marketing channels. JR Freight leases tracks from other JR firms and its main customers are transportation firms.