Toshiba Corp. said Friday it will spin off some of its operations so it can concentrate its resources on semiconductor and digital products.

Under its three-year business plan, the electronics maker will create a new company Oct. 1 that will oversee medical systems and home appliances.

Hitachi Ltd. made a similar move last year.

Toshiba’s home appliances segment is expected to see sales of 680 billion yen in fiscal 2002, accounting for 12 percent of group sales, on an operating profit of 13 billion yen. However, the firm has been suffering from a decline in this segment, which has been crippled by downward price pressure.

Toshiba logged an operational loss of 300 million yen in the third quarter through December.

Toshiba said it hopes to expand group sales to 6.6 trillion yen and lift operating profit to 270 billion yen in fiscal 2005 by investing heavily in digital products and electronics devices.

It said it will work to reduce its group interest-bearing debt to 1.3 trillion yen, down some 390 billion yen, through fiscal 2005, the final year of the plan.

By shifting its focus to digital products and electronic devices, the firm expects to see an average 8 percent growth in annual sales, attaining a group operating profit of 180 billion yen in fiscal 2005.

It said it will invest 75 percent of its 840 billion yen capital investment budget and 75 percent of its 1.1 trillion yen research and development budget for the three year period into these two segments.

Toshiba said it expects the overseas sales ratio of the two segments to grow by up to 50 percent in three-year period.

The firm logged a massive group net loss of 254 billion yen in fiscal 2001 but expects a sharp turnaround in the current year, forecasting 23 billion yen in consolidated net profit on revenue of 5.65 billion yen.

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