Mitsubishi Corp. said Friday it and five food wholesalers will establish a joint venture this month to strengthen their bargaining power in dealing with food makers.
The move is intended to fend off intensifying competition with major supermarket chains and giant foreign retailers breaking into the Japanese market, Mitsubishi officials said. Retailers are stepping up moves to procure goods directly from makers.
The joint venture, Alliance Network, will be owned 51 percent by Mitsubishi and 29 percent by national wholesaler Meidi-Ya Co., with the remaining four wholesalers putting up 5 percent each, they said. It will be capitalized at 30 million yen.
The four are Asahi Shokuhin Co. in Kochi Prefecture, Kanakan in Ishikawa Prefecture, Sato in Fukushima Prefecture, and Marudai Horiuchi in Aomori Prefecture, officials said.
The new company will be charged with assembling order lots from wholesalers to sharpen its collective bargaining edge, while sharing distribution centers and developing an information system to facilitate the new business structure, they said.
Net profit up 32.4%
Trading house Mitsubishi Corp. reaped a group net profit of 92.46 billion yen for the nine months to Dec. 31, up 32.4 percent from a year earlier.
Mitsubishi Corp. on Friday attributed the solid earnings to brisk auto sales in Asia and strong performance in its energy-related business. The rise in net profit was partly due to smaller evaluation losses on equity holdings amid a recovery in stock prices. Net profit per share was 59.05 yen, up from 44.56 yen a year earlier.
Group pretax profit rose 72.4 percent to 123.18 billion yen on a 16 percent gain in revenues to 11.23 trillion yen.
Mitsubishi credited the increased revenues in part to the inclusion of Metal One Corp. as a group company. Metal One was created through the January 2003 merger of Mitsubishi's steel businesses with those of Nissho Iwai Corp.