The closures were announced as part of a business plan designed to enable a “substantial” increase in overall group earnings. By 2012 Kirin is aiming to achieve sales of ¥2.13 trillion (excluding liquor tax) and operating income of ¥188bn.

Kirin is already the biggest Japanese food and beverage firm but the targets, especially on the bottom line, are challenging. Estimated sales for 2009 stand at ¥1.93 trillion (excluding liquor tax) and operating income is expected to be ¥125bn.

Profitability focus

This means that Kirin must achieve a 50 per cent increase in operating income over the next three years to meet its 2012 target. Priorities have turned from the top to the bottom line.

“During the term of the previous medium-term business plan, initiatives were focused on expanding the scope and scale of Kirin’s operations to achieve a quantum leap in growth,” said Kirin in a statement. “The new plan focuses on achieving a quantum leap in profitability.”

Kirin plans to generate internal synergies and develop a leaner management structure in order to make this possible.

Japanese breweries

Closure of the Tochigi plant and the Hokuriku plant after the peak period of 2010 is one of the concrete measures put forward under these broad goals.

Plans to close the breweries come as Japanese beer sales struggle. Kirin said the domestic market faces the challenges of an aging population, diversification of tastes, and a defensive consumer mindset in a weak economy.