-- Daido Steel Co. said Thursday it will consolidate its 40 affiliates that are subject to group earnings to less than 40 by the end of March 2003.
The steelmaker will implement the consolidation plan in an effort to make itself more competitive and survive cost-cutting pressure from carmakers, which are its major customers.
Under a three-year business plan covering fiscal 2000 through fiscal 2002, the largest specialty steel manufacturer in Japan hopes to raise its return on assets to more than 5 percent from the 3.9 percent estimated for the current fiscal year, which ends March 31.
ROA, a key gauge of profitability, is tallied by dividing net income by total assets.
The company said it also plans to slash its workforce by 1,300 to 9,400 under the business plan.
Along with cutting costs on its core specialty steel products, Daido Steel plans to develop its business in other areas in which growth can be expected, including information, electronics and the environment, it said.
The company said it aims to attain a consolidated pretax profit of 21 billion yen on sales of 400 billion yen for fiscal 2002, against an estimated pretax profit of 16 billion yen in fiscal 2000 on sales of 374 billion yen.