Mitsui & Co. and Sumitomo Corp. plan to streamline their operations by merging their wholly owned fertilizer sales subsidiaries by around April, officials of the two trading companies said Monday.
The move is in response to the shrinking fertilizer market as farmers reduce rice production, analysts said.
The combined sales of the Tokyo-based companies -- Mitsui Bussan Agro-Business Co. and Sumisho Nosan Co. -- are around 36 billion yen.
After the merger, the new company will have the second-biggest share of the domestic fertilizer market, which turns over around 500 billion yen annually.
The National Federation of Agricultural Cooperative Associations (Zenno) holds the largest market share. Details about the new company, such as the ratio of investment and its new name, have yet to be decided, the officials said.
Trading units merger
Itochu Corp. and Marubeni Corp. said they will merge their trading subsidiaries dealing in steel construction materials on equal terms on Oct. 1, simultaneous to the integration of their steel businesses.
The merger of Itochu Technometal Co., No. 1 in the domestic industry, and Marubeni Steel Structural Materials Inc., currently No. 3, will create the largest firm selling and exporting steel construction materials in Japan, they said Friday.
The new company, to be named Marubeni-Itochu Techno Steel Inc., will be capitalized at 870 million yen and employ around 370 staffers.
It is expected to post sales of about 290 billion yen in fiscal 2002, they said.
Itochu and Marubeni plan to strengthen their sales force, increase cost competitiveness, and improve management efficiency.
In a bid to boost their steel trading volume, Itochu and Marubeni are preparing to merge their steel operations on Oct. 1 under a 50-50 joint venture.
Marubeni-Itochu Techno Steel, to be used by the two firms as their core subsidiary, will be a wholly owned subsidiary of Marubeni-Itochu Steel, the companies said.