Sanyo to sell two idle plants in Japan

TOKYO - Struggling electronics maker Sanyo Electric Co. has said it plans to sell two idle factories in Japan as part of a restructuring plan aimed at shrinking its assets and cutting debt.

Sanyo unveiled the plan in July, vowing to cut 15 per cent of its global workforce, close or sell 20 per cent of its factory floor space in Japan, and halve its 1.2 trillion yen of interest-bearing debt by March 2008.

A Sanyo spokesman said the company planned to sell a plant in Tochigi Prefecture that used to make commercial air conditioners and another factory in Saitama Prefecture that once produced vending machines.

The Tochigi factory closed in 2003 while the plant in Saitama has been idle since Sanyo sold its vending machine business to Fuji Electric Holdings Co in 2002.

"There really is no point to us having (these factories) anymore," the spokesman said. He added, however, that no further details had been decided such as the buyer or the selling price.

Sanyo has earmarked 90 billion yen for restructuring in the year to March 2006. It had a net loss of 171.5 billion yen in 2004/05, hammered by earthquake damage to a chip factory and sluggish sales of digital cameras and mobile phones.

The formidable challenge of reorganising Sanyo's vast business interests falls on two executives, Chief Executive Tomoyo Nonaka and President Toshimasa Iue, appointed in June.

Iue, the grandson of Sanyo's late founder Toshio Iue, has said the company planned to detail its restructuring plan by late October when its first-half earnings report is due.

* $1 = 78 yen