[Intl-tobacco] Japan Tobacco Unveils a New Plan To Revamp Former RJR Operations

[Robert Weissman]

Japan Tobacco Unveils a New Plan To Revamp Former RJR Operations
by Dow Jones Newswires
Source: The Wall Street Journal Interactive Edition, Tuesday, 2/1/00

TOKYO -- Japan Tobacco Inc. unveiled a new management plan Tuesday to
revamp the international tobacco operations recently purchased from RJR
Nabisco Holdings Corp., in an effort to improve the operations' efficiency
and profitability.

                             RJR Nabisco Holdings is now called Nabisco
Holdings
                             Corp. Japan Tobacco said it will cut overseas
staff by 2,000 by
                             the end of the fiscal year through March
2003. After this, the
                             company will further slash the work force "as
needed," it said in
                             a statement.

                             Domestically, the tobacco and foodstuffs
maker said it will
                             continue reducing its head count, cutting the
number of
                             employees over the next five years by a total
of 2,500. This
                             includes 1,200 jobs cut through an early
retirement program and
                             the remaining 1,300 by natural attrition.

                             The measures aim for group annual costs
savings of $237
                             million in the business year starting in
April 2004, to be achieved mostly through the restructuring and
integrating factories and branches and by reducing staff.

Japan Tobacco sees its group net profit rising to 35 billion yen ($326.2
million) in the fiscal year starting in April and 140 billion yen in the
fiscal year starting in April 2004. This compares with an estimated 48
billion yen in net profit for the current fiscal year ending in March
2000.

The company aims for group sales of 4.58 trillion yen for this fiscal year
and 4.8 trillion yen for the fiscal year beginning April 2004. It expects
group sales of 4.33 trillion yen for the current business year to March.

The early retirement of 1,200 staff, all employed in manufacturing, will
result in special losses of 12 billion yen, which company is considering
reporting in the fiscal year ending March 31, said Takao Seki, executive
director of the JT planning group.

In May, the Japanese tobacco company acquired the non-U.S. tobacco
business of RJR Nabisco, which it has merged with its own international
tobacco business and renamed JT International S.A.

Sales in East Europe and the former Soviet Union, which the company sees
as major overseas markets, unexpectedly slumped. Because of this, sales
from overseas operations fell short of the company's projections for the
first year.

http://interactive.wsj.com/archive/retrieve.cgi?id=SB949394767510220610.djm