JS Group to Close Some Domestic Plants for Streamlining

JS Group studies potential shutdown of some domestic plants. The firm apparently considers shutdown of LIXIL’s shutter plant in Fukuoka and kitchen plant in Ibaraki. The firm could close the plants in second half of fiscal 2012 started April. The firm tries to reduce the output capacity to shrinking domestic demand for better productivity and lower cost.

The firm could close other plants at home and abroad. Sanwa Shutter covers the shutter production after LIXIL’s plant closure for LIXIL group. LIXIL signed original equipment manufacturing agreement with Sanwa Shutter in January 2012. Sanwa Shutter provides the products for LIXIL group. Japanese shutter demand in fiscal 2011 was estimated to be around 40% of the peak of 2.7 billion yen level.

LIXIL reduces kitchen plants from current 5 to 4 through closure of plant in Ibaraki. The domestic leading kitchen maker is losing domestic share since the start of LIXIL group.

JS Group targets 110 billion yen of lower cost for domestic business by fiscal 2013 compared with fiscal 2010 level under the mid-term business plan. The firm targets 10% of operating profit on the sales. The plant closure is a part of the strategy for better domestic business. The firm already announced closure of old aluminium sash plant in Toyama.