4 February 2010 | Jake Kanter

Electronics giant Sony says it is on track with a plan to cut procurement costs by one-fifth.

Unveiling its third-quarter results today, the Japanese company said that by the end of this financial year it would have made purchasing cutbacks of 20 per cent compared with the last financial year.

It did not reveal the value of this savings aim, but said it would contribute to an overall annual cost target of 330 billion yen (£2.3 billion). Other savings already achieved have resulted from cutting 20,000 jobs and reorganising manufacturing sites.

Sony's chief financial officer Nobuyuki Oneda said much of the procurement cutbacks would be generated from halving its supplier numbers to 1,200 by March 2011, in accordance with plans announced last year.

“Concentrating procurement into a limited number of suppliers increases the amount of business with individual suppliers and this is expected to reduce our costs significantly,” he said.

The savings helped Sony post a net profit of 79.2 billion yen (£551 million) in the third quarter of this financial year, with a profit of 10.4 billion yen (£72 million) in the same period a year earlier.