Tag: Japan

Newly inaugurated Japan Post President Yoshifumi Nishikawa told a news conference April 2 that he will focus on improving operational efficiency and cutting costs as the public postal entity prepares for the start of privatization this October.

As part of the efforts to promote change, Nishikawa said that Japan Post plans to establish a special in-house committee. The panel will be charged with exploring various topics, such as effective ways to use specially designated post offices run by independent contractors and introducing private-sector investment methods.

“These post offices have strong ties to their local areas and are a powerful force, particularly in financial businesses,” Nishikawa noted. Of the nation’s roughly 24,000 post offices, around 19,000 are run by independent contractors. More than 70% are said to be in the red, and in addition, nepotism and other counterproductive practices tend to run rampant at these specially designated facilities.

Nishikawa is seeking to introduce a more contractor-friendly structure, consolidating the post offices into large regional groups while allowing them to retain their decision-making powers.

Nishikawa said during another press interview on April 6 that Japan Post intends to enter the mortgage market, targeting single women and others who are considered too risky by banks.

As part of its privatization efforts, Japan Post is preparing to launch new businesses, including home loan operations, to build profit sources. But since it does not have experience in the mortgage business, it is considering teaming up with the Japan Housing Finance Agency, formerly known as the Housing Loan Corp.

Japan Post will also use its assets more effectively, Nishikawa said. It plans to expand the main post offices in Tokyo, Osaka and Nagoya, converting the five- and six-story structures into at least 20-story high-rises by 2011. Located in front of major train stations, these properties will be able to generate sizable rental income.

With six months left before the privatization of Japan Post on Oct. 1, there are many hurdles to clear, such as the purchase of government-commissioned special postal offices privately owned by individuals across the country.

Japan Post Corp., a company established in January 2006 by Japan Post in preparation for postal privatization, will submit to the government a detailed business plan at the end of this month in a move to enter the final stage of preparations for postal privatization.

Japan Post Corp. President Yoshifumi Nishikawa, who has doubled as president of Japan Post since Sunday, said at a news conference Monday, “A host of issues read to be resolved before realizing postal privatization.”

The task to be tackled for the moment is the purchase of special post offices owned by postmasters. Of about 17,500 special post offices, Japan Post Corp. plans to purchase 2,400 of them engaged only in delivery and mail collection at a total cost of 100 billion yen.

Currently, Japan Post pays about 80 billion yen a year in rental fees to the 17,500 special post offices. Rental fees to 2,400 post offices on the purchase list amount to 16 billion yen.

In many cases, the rent is set at higher levels than going rates, according to a source who asked not to be identified.

The national association of postmasters of special post offices, for its part, is resisting the plan to purchase special post offices. About 900 special post offices, or nearly 40 percent of those on the purchase list, have refused to sell, saying the purchase offer is too low.

Japan Post is making strenuous efforts to persuade them to sell their post offices by extending the deadline for negotiations earlier set for the end of March until early April.

Japan Post plans to adopt a computer system now in use at a major Japanese bank for its new “Yucho” savings bank operations, which will be created through the privatization of postal services, it was learned Tuesday.

Japan Post will invite proposals for the new system, probably from Hitachi Ltd. , Fujitsu Ltd. and IBM Japan Ltd., and make a final decision in late May at the earliest, informed sources told Jiji Press.

The state-owned postal service corporation intends to launch the new Yucho bank system in January 2009, according to the sources.

Upon government approval, the Yucho bank plans to offer new services such as mortgages, foreign currency deposits, and loans to small and medium-sized companies. The services will be launched after the breakup and privatization of Japan Post in October.

However, Japan Post’s current computer system for Yucho savings is not equipped to handle such services.

Instead of creating a totally new system, it plans to introduce a system used at a major Japanese bank and connect it to the current Yucho system, the sources said. This, it hopes, will allow a smooth changeover to the new Yucho bank system in a short period of time.

According to Japan Post’s criteria, the new system needs to be already in use at 400 or more manned bank branches in Japan and capable of covering operations at 600 or more such offices, the sources said.

Only three bank systems are believed to satisfy such criteria–the Hitachi-made system for the former UFJ Bank, the IBM Japan system for the former Bank of Tokyo-Mitsubishi, and the Fujitsu system for the former Dai-Ichi Kangyo Bank, now Mizuho Bank. UFJ Bank and Bank of Tokyo-Mitsubishi merged into Bank of Tokyo-Mitsubishi UFJ in 2006.

The Yucho bank is one of four offshoots to be created in October at the start of Japan Post’s 10-year privatization process.