Sankyo-Tateyama Holdings to Cut Job, Close Plants

Sankyo-Tateyama Holdings announced on Monday restructuring plan including 1,000 jobs cut. The firm tries to improve the profitability through consolidation and shutdown of 5 plants of all 12 plants. The firm expects to post profit in the year to May 2010 through 13 billion yen of annual gain in the year to May 2010 and 15.5 billion yen of impacts in the year to May 2011.

The firm tries to restructure the business structure to survive under severe business condition for construction materials. The firm cuts 1,000 jobs including permanent employees while the firm cuts payment for employees. The firm reduces 600 jobs with more than 10 years carrier and more than 43 years old age by June end for the major operating subsidiary, Sankyo Tateyama Aluminium. The firm also reduces 270 jobs including temporally workers while the firm cuts compensation for directors by 25-50% and employees’ basic salary by averaged 10%.

The firm shuts down or consolidates 5 plants in total 12 plants in the group to improve the operations. The firm keeps studying the scheme and announces the actual plan later. The firm renews top management of Sankyo Tateyama Aluminium as a part of the restructuring.

The firm expects 7.7 billion yen and 8.1 billion yen of gain from job cut and pay cut in the year ending May 2010 and May 2011 respectively. The firm also expects 200 million yen and 300 million yen for plants consolidation, 2.7 billion yen and 3.8 billion yen for production cost cut, 1.2 billion yen and 1.9 billion yen for procurement cost cut and 1.2 billion yen and 1.4 billion yen for administration and other cost during the period.

The firm expects the gain could be 10.2 billion yen for Sankyo Tateyama Aluminium and 900 million yen for other subsidiary, Tateyama Advance in the year ending May 2010 and the 2 subsidiaries could post recurring profit. The firm expects other subsidiary, Sankyo Material could post recurring profit for the year ending May 2011 with 1.9 billion yen of gain.