TOKYO -- Suntory Beverage & Food targets synergies of at least 5 billion yen ($44.4 million) in two to three years from its 2015 purchase of beverage vending machine operations from Japan Tobacco, new President Saburo Kogo told The Nikkei.
The company will meet the target by relocating machines to eliminate overlap, as well as cutting costs and curbing investment, he said. Kogo took the helm Wednesday.
Suntory Beverage acquired Japan Beverage Holdings and other businesses from JT for roughly 150 billion yen last July. This increased Suntory's machines in operation by 140,000 to 610,000 -- still about 200,000 short of the industry-leading Coca-Cola group. But "we will not seek a larger scale, since the Japanese vending machine market is already saturated," Kogo said.
The company will go on the offensive in such hot spots as new buildings and tap the marketing power of Japan Beverage, strong in tea-dispensing machines, to shift its vending machines to more profitable sites, the president said.
Vending machine operators in Japan are increasingly teaming up. Kirin Beverage and DyDo Drinco start cross-supplying key products in April, for example. "We could think about joint development and collaborating in logistics operations," Kogo said, expressing an eagerness to work with others to further strengthen its earnings power.