TOKYO -- Ricoh intends to put two subsidiaries on the market in an attempt to raise money for restructuring its operations worldwide, as the Japanese company continues to suffer a slump in its mainstay multifunction printer business.
Ricoh Logistics System is a Tokyo-based unit that handles comprehensive logistics, from warehousing and forwarding to distribution. It draws clients from a range of businesses, such as precision-equipment manufacturing and online sales of office supplies. Consolidated sales exceed 70 billion yen ($636 million).
Ricoh Logistics' roughly 3,000 employees likely would make it an attractive acquisition target for major Japanese distribution companies struggling with labor shortages.
The major office equipment maker also is considering selling Ricoh Electronic Devices, an Osaka subsidiary that was spun off in 2014. This unit develops and fabricates power chips for smartphones and other devices.
The parent wants to sell the two noncore businesses to raise tens of billions of yen for its restructuring efforts, but no deal will proceed unless the price is right.
Weak sales of multifunction printers dropped Ricoh's operating profit margin to 1.7% for the year ended in March, down 2.9 percentage points from a year earlier. To prevent further deterioration in the margin, the company plans to close or suspend operations in one Japanese plant and another in the U.S., as well as lay off workers in North America. Ricoh also looks to reorganize its manufacturing bases, review sales systems and cut jobs worldwide, hoping to slash a total of 100 billion yen in costs.
(Nikkei)