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Mitsubishi Rayon & TOLI reorganize carpet operations
08 Nov '06
2 min read
Mitsubishi Rayon Co Ltd has reached a basic agreement with TOLI Corporation under which the carpet production facilities of Mitsubishi Rayon's consolidated subsidiary Mitsubishi Rayon Carpet Co Ltd are to be sold to the TOLI Group.
The sales rights to the carpets manufactured at the said facilities will be held by a company to be newly established, which will be jointly owned by Mitsubishi Rayon and TOLI.
Background to this Agreement
Both TOLI and Mitsubishi Rayon Carpet are principally engaged in the business of manufacturing and marketing carpets, most of which are carpet tiles for office use. The market for carpet tiles in Japan is showing a strong upward trend, supported by vigorous demand for office renovation work, as well as for non-office applications.
On the other hand, the profitability of this business is deteriorating as a result of falling market prices, particularly for standard items, coupled with rising prices of the main raw materials, such as nylon fibers, PVC resin, plasticizers, and others.
In view of this situation, TOLI and Mitsubishi Rayon decided to implement the above-described reorganization of their carpet operations with the aim of raising the efficiency of production and marketing, and achieving improved profitability.
With this amalgamation, TOLI, which does a carpet manufacturer possess a nationwide interior furnishings sales network, will manage and control all the carpet manufacturing facilities. At the same time, this move will reinforce the sales network of TOLI and Mitsubishi Rayon Carpet.
The sales rights to the carpets manufactured at the said facilities will be held by a company to be newly established, which will be jointly owned by Mitsubishi Rayon and TOLI.
Background to this Agreement
Both TOLI and Mitsubishi Rayon Carpet are principally engaged in the business of manufacturing and marketing carpets, most of which are carpet tiles for office use. The market for carpet tiles in Japan is showing a strong upward trend, supported by vigorous demand for office renovation work, as well as for non-office applications.
On the other hand, the profitability of this business is deteriorating as a result of falling market prices, particularly for standard items, coupled with rising prices of the main raw materials, such as nylon fibers, PVC resin, plasticizers, and others.
In view of this situation, TOLI and Mitsubishi Rayon decided to implement the above-described reorganization of their carpet operations with the aim of raising the efficiency of production and marketing, and achieving improved profitability.
With this amalgamation, TOLI, which does a carpet manufacturer possess a nationwide interior furnishings sales network, will manage and control all the carpet manufacturing facilities. At the same time, this move will reinforce the sales network of TOLI and Mitsubishi Rayon Carpet.
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