Restructuring trading house Nissho Iwai Corp. is hoping to increase its annual group pretax profit to 100 billion yen in five years, more than a fivefold increase from the 18.2 billion yen it registered in fiscal 1999, company sources said Wednesday.
On an after-tax basis, it will be equivalent to an annual profit of roughly 50 billion yen, far greater than the 23 billion yen projected for the year through March 2001, which would be a record profit for the Osaka-based company.
The firm expects around 25 percent of the projected profit to come from gains on asset sales. The forecast also assumes it will become a competitive player in the information-technology sector, where it is planning to invest heavily, the sources said.
The company will work out specific plans for generating these sales and profits in its next management program covering the period after March 2002, when the current midterm business plan ends, the sources said.
Nissho Iwai is also planning to consolidate its nine operation divisions into the five category groups of machinery, metals, energy, life and electronic business, the sources said.
It will also establish a division to oversee major investment and loan projects that would cover more than one of those five groups, the sources said.
The company is also considering establishing a holding company, they added.
Nissho Iwai has been restructuring its operations by pulling out of money-losing businesses such as overseas property trade and textiles.
Marubeni in Taiwan
Marubeni Corp. said Wednesday it has signed an accord with a Taiwan maker to set up a joint venture for production and sale of back lights used in thin-film transistor liquid crystal displays (TFT LCDs).
The deal is aimed at slashing personnel and transport costs through local production of the product, which has been mostly supplied and exported by Japanese makers, Marubeni said.
Taiwanese demand for TFT LCDs is expected to expand to about 20 million displays by the beginning of 2003, given a string of announcements of plans to build new TFT LCD plants on the island using Japanese technology, the major Japanese trading house said.
The venture, named Glory Optics Technologies Ltd., will be owned 70 percent by Taiwan’s Hua Eng Wire & Cable Co., 20 percent by the Marubeni group and 10 percent by Japan’s major back light maker Fujitsu Kasei Ltd. It will be capitalized at NT$430 million (1.46 billion yen).
The new company will aim to assemble 3,300 back light units and post sales of NT$3.3 billion in three to five years. It will start operations in October, it said.