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| Progress update
of the ‘SANYO EVOLUTION PROJECT’
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| Tokyo, January 31, 2006 ----SANYO Electric Co., Ltd. (SANYO), today
announced the progress of the three year structural reform plan called
‘SANYO EVOLUTION PROJECT’ - launched on July 5, 2005,
and ‘Program Alpha’ – launched on September 28,
2005 to speed up streamlining. The progress attained is outlined below: |
| 1. Termination of OLED Business
and Liquidation of SK Display Corporation. |
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| SANYO had been collaborating with Eastman Kodak Company since 1999
on the development and business launch of OLED. However due to greater
selection and focus on SANYO’s core businesses, based on its
Mid-Term Business Plan, in order to further focus on its strengths
in the core businesses, SANYO has decided to terminate its OLED business
and liquidate SK Display Corporation, which manufactures and sells
OLEDs. |
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| SANYO expects by January 31, 2006, to have reduced employment by
approximately 10,500 employees, thus achieving its original goal.
Regarding the breakdown, there is a reduction of about 4,850 employees
in Japan, and 5,650 employees overseas. |
| 3. Strengthening the
HR function |
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| As part of its HR structural reforms aimed to strengthen HR functions
and low cost operations, SANYO examined outsourcing all of its HR
operations. As a result, SANYO and its group companies have reached
a basic agreement with IBM Japan to outsource its HR development,
payroll accounting, and company HR practices functions. And today
SANYO has reached a basic agreement with Recruit Co., Ltd, to transfer
90% of SANYO Human Network Co., Ltd., which conducts a temp staff
business. Moreover in December, SANYO reached a basic agreement with
the world’s leading all-round real estate service, Jones Lang
LaSalle Inc. to tie up with SANYO Associate Support Co., Ltd., for
building maintenance. SANYO plans for the final agreement in March,
as a result of which, approximately 700 employees in related jobs
will be transferred to companies not on SANYO’s consolidated
balance sheet.
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| 4. Liquidation of Fixed Assets |
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| The sale of the former Fukiage plant and Ashikaga plant has been
finalized. SANYO is also looking to sell its 60 sales offices in Japan.
Also, regarding the sale of listed shares SANYO owns, with the current
situation of the stock market, the progress is exceeding the original
plan. |
| 5. Streamlining the Balance Sheet |
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| The stock transfer of SANYO Electric Credit Co., Ltd., which excluded
SANYO Electric Credit Co., Ltd. from SANYO’s consolidated balance
sheet etc. reduced assets by 406.6 billion yen and interest bearing
debt by 378.6 billion yen compared to the end of 1st half fiscal 2005. |
| 6. Announcements already made regarding
Structural Reforms |
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· Dec. 9, 2005, SANYO announced a transfer of a part of its
interest in SANYO Electric Credit Co., Ltd. to The Goldman Sachs Group
Inc.
· Dec. 9, 2005, SANYO announced a basic agreement to form an
alliance with a Leading International IT Products Manufacturer regarding
its TV Business.
· Jan. 13, 2006, SANYO announced a basic agreement to transfer
shares of SANYO Mavic Media Co. Ltd. to BMB Corp.
· Jan. 25, 2006, SANYO Finalizes Terms for a 300 billion yen
increase in Share Capital
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