February 22, 2014 1:54 am JST

Sumitomo Osaka Cement targets 20% op profit gain by fiscal 2016

TOKYO -- Sumitomo Osaka Cement will generate an annual consolidated operating profit of 25 billion yen ($241.57 million) by fiscal 2016 by tapping construction demand in the run-up to the 2020 Olympics, President Fukuichi Sekine says.

     This would mark a 20% jump from the current fiscal year's expected profit of 21 billion yen.

     Sekine expects overall domestic cement demand of 48 million tons to 50 million tons from next fiscal year on, more than the 47-million-ton forecast made in the first fiscal half. Infrastructure construction ahead of the games is expected to add to existing demand from rebuilding after the March 2011 earthquake and tsunami.

     To keep up with the heavier demand, Sumitomo Osaka Cement will launch Saturday a carrier with a capacity of 8,000 tons. Three more vessels are to be added starting in 2015.

     Although it plans to retire two older ships, its fleet will expand from 19 with a total capacity of 82,000 tons at the end of last year to 21 and nearly 97,000 tons by the end of fiscal 2015.

     Sumitomo Osaka Cement is working to improve its financial health as well. The company plans to reduce interest-bearing debt by up to 30% within three years to prepare for higher interest rates. The balance will go down from an estimated 99 billion yen at the end of this fiscal year to the low 70 billion yen range.

     "We will consider increasing dividends as well if we can ensure stable results over two to three years," Sekine said.

     The president said he sees operating profit next fiscal year "in line with this fiscal year's record profit."