In a desperate restructuring move, major oil refiner and distributor Japan Energy Corp. said Tuesday it will nearly halve its workforce by 2003 to survive ever-intensifying competition.
The firm also announced that it is negotiating with Showa Shell Sekiyu K.K., the nation's sixth-largest oil wholesaler, to integrate parts of their logistics units. Sources said that Japan Energy is also considering capital participation in a Showa Shell subsidiary.
Japan Energy, the nation's fifth-largest distributor, had 3,200 workers as of April 1998. Officials said it aims to reduce that number to 1,900 by April 2001.
In addition, the firm said it plans on implementing further personnel cuts through streamlining measures that would spin off its electronics devices unit into a subsidiary company. The move, it said, would help reduce the number of employees to less than 1,500 by 2003.
The oil industry was recently shaken up by a megamerger agreement between Nippon Oil Co. and Mitsubishi Oil Co. to create Japan's largest oil company on April 1. Domestic oil companies have been suffering from falling gasoline prices, a service station glut and the overproduction of oil.
As part of its restructuring, Japan Energy plans to raise more than 50 billion yen through public stock issues of its profitable subsidiaries, including Central Computer Service Corp., according to Japan Energy officials.
The firm is also considering going public with AM/PM Japan Co., a major convenience store chain operator 68-percent owned by Japan Energy.