Tag: Japan

Japan Post business plan to create giants

Posted by | May 1, 2007 | |

The Japan Post group, to be born via privatization in October, will consist of five companies that will dwarf or equal private-sector rivals, according to a business plan submitted to the government.

The plan, sent for approval Friday to internal affairs minister Yoshihide Suga by Japan Post Corp., a privatization preparatory firm, expects the Japan Post group’s net profit to hit 587 billion yen in fiscal 2011, exceeding the 500 million yen of the NTT group–one of Japan’s largest corporate entities.

The group’s five companies will have a total 241,400 employees, compared with NTT’s 200,000.

The Japan Post group will consist of a holding company and four operating firms, each of which will be in charge of mail delivery, post office management, postal savings and postal life insurance.

The four operating companies will exceed, or at least equal, the biggest players in the private sector in their respective fields.

The postal savings bank, for example, is expected to manage 164 trillion yen in deposits in fiscal 2011. The balance will nearly equal the combined deposits at two of the nation’s three largest financial groups–Mitsubishi UFJ, with 100 trillion yen, and Mizuho, with 70 trillion yen.

The postal bank will be the Japan Post group’s key money maker, projecting 304 billion yen in net profits in fiscal 2011.

To stem the decline in profits, the postal bank plans to offer new businesses, such as housing loans and credit cards as early as next year, a move that is likely to heat up competition with private-sector rivals.

The postal life insurer plans to boost profits from its fund management amid rising interest rates.

By contrast, the mail delivery company and the post office management company, which have more than 100,000 employees each, expect modest profits.

The mail delivery company plans to enter the direct mail service sector, which is the turf of private home delivery companies.

To attract customers to its outlets, the post office management company will sell life and nonlife insurance products offered by private insurers

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China Postal Group plans to set up insurance company

Posted by | Apr 25, 2007 | |

China Postal Group (CPG) plans to set up an insurance company which will be the country’s first insurer with sole investment from the postal sector, Wu Dingfu, chairman of China Insurance Regulatory Commission (CIRC), said yesterday.
Wu said the commission is currently dealing with the application submitted by the CPG for establishing an insurance company.

The company would be set up by the CPG and its plentiful subsidiaries across the country, and would provide insurance services involving relatively small amount of money as some Japanese insurers do, according to Wu.

About 20,000 insurance companies operating in Japan are mainly engaged in one-year life and medicare insurance and two-year property insurance, which usually set an upper limit to the compensation amount.

China’s postal sector, boasting 36,000 outlets nationwide, simply serves as the sales agent of insurance products for the moment, but was urged to explore further cooperation with the insurance sector.

Statistics show that nearly 14 percent of the country’s insurance agents came from the postal sector by the end of March.

The CPG has earlier made a step toward the financial reform in establishing the China Postal Savings Bank with total registered capital of 20 billion yuan (USD2.6 billion), which becomes the country’s fifth largest bank.

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Net profit estimate lowered for Japan Post group after privatization

Posted by | Apr 25, 2007 | |

A faster-than-expected drop in postal savings has prompted Japan Post Corp to lower a net profit estimate to 508 billion yen for its group in fiscal 2008 after the postal system’s privatization this October, informed sources said Wednesday.

For fiscal 2011, which ends in March 2012, the net profit is estimated at 587 billion yen for the group that will consist of Yucho (postal savings) Bank, Kampo Life Insurance Co, a mail service company, a post office over-the-counter services firm and their holding company. The number of employees the group will take on from the postal system as of the privatization is estimated at 241,400, down some 10,000 from the previous estimate given in July 2006, as some 10,000 workers voluntarily left the system at the end of March.

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The bill with wrong address

Posted by | Apr 24, 2007 | |

One wonders why the India Post Amendment Bill has been mooted. It is just not worth the effort. And it doesn’t matter if the bill gives monopoly rights to the government carrier in a certain weight category, or if it forces private courier companies to charge many times more than India Post. In the first place, this is simply a restrictive trade practice. From a business perspective India Post is simply picking a lemon.

Consider their argument for seeking a monopoly right to carry letters and documents that weigh less than 150 grammes. DoP believes that it alone services the universal service obligation (USO) because it has thousands of branch offices in the rural areas where there are no courier services. It loses Rs 700 crore annually to run these branch offices. In doing so, DoP incurs extensive losses on almost every product that it delivers. So why is it hankering to do more of the loss-making business? If DoP actually gets to implement what it is looking at then its losses will compound.

The situation might actually be worse. This segment has been growing at a slower pace when compared with the express parcels and logistics segment. According to the latest survey conducted by the universal postal union (UPU), almost two thirds of public operators across the globe are anticipating a drop in the proportion of income generated by the letter post, with the proportion of income generated by parcels & logistics and to a lesser extent by postal financial services set to increase accordingly. Compared to express parcels and logistics, projected to grow at almost 25% over the next three years, the letters and post segment is projected to grow at only 8% to 10%. It is intriguing, then, why India Post still wants to create a strong foothold in this segment while its cousins abroad—Deutsche Post and US Postal Service—are focussing largely on parcels & logistics services.

DoP has cited international examples to strengthen its case for retaining exclusive privilege. While most countries allow the official postal department to reserve certain segments of the postal business, the international trend is toward opening up the postal sector. The European Union has made it mandatory for its members to open up the postal sector by 2009. Japan also plans to completely privatise Japan Post, a state-owned entity, by 2007.

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Japan Post spinoff to take over mail-order sales business

Posted by | Apr 16, 2007 | |

The new firm that will manage the post office network of privatized Japan Post will take over mail-order sales operations handling local specialties, informed sources said Monday.

The new company, which will control some 24,000 post offices nationwide, will take over mail-order sales operations from Postal Service Center, an affiliate of Japan Post, the sources told Jiji Press.

Postal Service Center currently sells local specialties by mail order across Japan, a service known as “furusato kozutsumi,” with deliveries to customers made via Japan Post’s “Yu-Pack” parcel service.

The center receives some 7 pct of the prices of local specialty goods handled as fees under the service, launched in 1983.

In fiscal 2005 ended in March last year, the number of parcels handled under the service totaled 12.45 million, accounting for some 5 pct of overall Yu-Pack parcels. The service has 610,000 members.

The takeover is designed to smooth the way for the post office managing company to start broader catalog-based sales operations handling local specialty goods.

The post office company is one of the four firms which will be created when Japan Post is split up in October under its 10-year privatization process. The three other spinoffs are a savings bank, an insurance firm and a mail delivery service firm.

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