Nippon Steel Corp. on Tuesday said it will spin off its urban development division in April 2002 and merge it with its wholly owned real estate subsidiary to improve the group's efficiency in the realty business.
Ahead of the merger, the division's condominium business will be integrated in April with another subsidiary, Nippon Steel Life Planning Co., as both cover the same area, the leading Japanese steelmaker said.
Nippon Steel Life's name will be changed after the integration, but its new English name has not been decided, it said.
Apart from condos, Nippon Steel has been engaged in land development while the subsidiary has been engaged in the rental-property business.
The merged company is projected to earn a pretax profit of 6 billion yen or more on sales of 130 billion yen in its initial year, with some 40 billion yen in sales coming from the operations of what was the parent's urban development division and 90 billion yen from what was Nippon Steel Life.
Yoshio Hyodo, president of Nippon Steel Life, will be president of the new firm, which will have a workforce of 500, the steelmaker said.