Nippon Meat Packers has announced plans to dissolve its Premier Deli Co subsidiary as it looks to cut costs by JPY3.5bn (US$32m) per annum.

The unit manufactures premium deli meats. Production will be transferred to Nippon Ham Shokuhin Co, the company said.

"The company estimates a special loss on the dissolution of the subsidiary at approximately JPY900m, which has been taken into account in the forecast of its business results for the current fiscal year," Nippon said in a statement.

The move comes as Nippon is looking to overhaul its business in order to cut costs and meet profit forecasts despite rising costs.

Currently, the company produces around 2,000 meat products. It has said that it will discontinue as many as 600 items, or between 10% and 15% of the total product line-up.

Nippon also intends to improve productivity by concentrating production at two of its facilities.

Nippon has targeted a 4.1% increase in sales and 37.2% increase in operating profit for the full year.