Idemitsu's 3-Year Biz Plan Includes Y450bn Investment

TOKYO (Nikkei)--Idemitsu Kosan Co. (5019) will earmark 450 billion yen for investment, with the bulk assigned to strategic projects abroad, according to a new medium-term business plan announced Monday.

The plan reflects the oil distributor's intention to streamline domestic refining operations while shifting more know-how overseas, as it aims to generate half of its operating profit abroad in fiscal 2015.

Total planned investment for fiscal years 2013-2015 is 20% more than the preceding three-year period. In the new plan, Idemitsu will allot 340 billion yen for refinery operations in Vietnam and other projects overseas.

Idemitsu hopes to kick-start earnings by developing a presence in the natural resources segment, namely oil and coal development.

Its oil field development project in the North Sea is expected to launch new production in 2014, with daily output expected to reach 44,000 barrels, up 72% from fiscal 2012.

Seeking to revive the profitability of its coal segment, Idemitsu will aim for a 31% increase in production to 12 million tons in fiscal 2015, including increased output of high-grade coal.

In Japan, Idemitsu will shutter its Tokuyama refinery in Yamaguchi Prefecture, a move that will raise capacity utilization at domestic refineries from the current 80% to 90% in fiscal 2015.

"We will strengthen trading functions, and adjust supply-demand conditions in Asia," said Executive Vice President Takashi Tsukioka. In the process, Idemitsu will work on expanding product exports.

It aims to increase fuel oil sales by 2 million kiloliters to 30 million kiloliters.

Idemitsu will target a 150 billion yen operating profit in fiscal 2015, up 50% from the projected figure for the current fiscal year ending March 31. It also seeks to earn 50% of operating profit from abroad, up from 28% now.

(The Nikkei, March 12 morning edition)

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