Retail & Lifestyle Business Division– Main Businesses & Vision –
Engaged in a wide variety of businesses both in Japan and overseas, including the food logistics business, operation of commercial facilities, brand business, consumer goods distribution logistics, textile business, and forest products business.
|●||Food logistics: Logistics and wholesale foods business in Japan and overseas, overseas retail business|
|●||Operation of commercial facilities: Operation of commercial facilities in Japan and overseas|
|●||Brand business: Apparel, shoes|
|●||Consumer goods distribution logistics business|
|●||Textile business: OEM apparel, textile sales|
|●||Forest products: Wood products, plywood imports, import and sale of raw materials for papermaking, overseas afforestation, woodchip production|
Meet the needs of the Asian market, which continues to show remarkable growth thanks to the modernization of distribution channels.
|●||[Major Business Activities] Food Distribution Business in Vietnam|
Operation of Commercial Facilities
|・||Contributing to the local economy by operating shopping centers in the region|
|●||[Project Story] Shopping Center Project|
|・||Contributing to the global expansion of the ‘NIKE’ brand since the company’s founding|
|●||[Major Business Activities] Nike Business|
|・||Providing timely, affordable products which match a variety of consumer needs.|
|●||[Major Business Activities] Textiles Business|
|・||Developing woodchip businesses in Asia and Australia|
|●||[Major Business Activities] Afforestation and Woodchip Business|
|●||[Major Business Activities] Production and Sale of Domestic Lumber and Products|
|●||[Major Business Activities] Wholesale Distribution of General Building Materials|
Business Overview and Vision
We aim to raise the standard of living by building retail platforms centered in Asia and operating a wide variety of businesses that accommodate diverse lifestyles
The Retail & Lifestyle Business Division engages in the retail and logistics businesses, primarily in Japan and Asia, with the aim of developing local infrastructure that supports daily life in each region. We are engaged in a wide variety of businesses, including food products, commercial facilities, fashion brands, consumer goods, textiles, and forest products. In all of these sectors, we are striving to create function-oriented businesses as opposed to product-oriented businesses by quickly grasping the continually changing needs of the consumer.
Against the backdrop of the rapid rise in living standards as well as structural changes in consumption and industry, we are contributing to industrial development and job creation through the expansion and modernization of retail distribution networks.
The Division is endeavoring to build an Asian retail platform by bringing Japanese expertise in tenant management and logistics management, as well as food culture to Asia. These efforts aim to establish logistics infrastructure in Asia and add to regional revitalization in Japan, thus promoting the flow of both people and goods.
General commodities business: As Nike’s business partner since the company’s founding in 1972, we provide trade financing and distribution settlement services that support Nike’s global operations, which focus on emerging countries.
Textile business: We support production at leading domestic specialty retailers in the apparel OEM business and help companies expand production bases and secure sources for procurement in Indonesia and throughout Asia.
Lumber business: We mainly handle plywood, lumber and building materials, and have established a solid base of customers in the building materials market as the industry’s leading seller of plywood in Japan. In lumber-related businesses such as forest products, we are working to create a forward-thinking, environmentally conscious business model. In addition to communicating a clear policy on procurement, we are conducting environmental surveys of our suppliers, among other measures.
Moreover, we have a regional advantage in Vietnam, where we have long been involved in afforestation and producing woodchips for papermaking. As a result, we have created jobs for farmers—many of whom are members of ethnic minorities—and raised the standard of living in the country.
Strengths That Drive Value Creation
Long-established influential connections in Asia help boost value
Our retail platform that ties Japan with Asia derives its strength from the regional networks and customer base that Sojitz has built over many years across Asia. As exemplified by our relationship with Vietnam, with whom we have had dealings since the Doi Moi policy was first implemented in 1986, our personal connections in the political world and networks of business partners in each country are tremendous advantages that have improved the quality and quantity of information available to us and greatly accelerated business progress. Moreover, as we are also acquainted with each country’s domestic demand, the conditions affecting both production and distribution companies, the labor situation and other factors, we play an important role in building value chains in Asia and offering solutions to Japanese companies establishing bases in Asian countries.
Leading market share in domestic lumber-related and textiles businesses
We have extensive knowledge regarding customer/business bases, products, and industry in Japan as a result of many years of business dealings. We have established a stable earnings foundation as a leader in the domestic markets for forest products, imported plywood, woodchips for papermaking, production controls for OEM apparel manufacturing and textile sales.
Operating Environment and Value Creation Strategy
Being at the forefront of changing needs in Asia and constructing wide-reaching value chains
We anticipate firm growth in Asia’s overall population, centered on the working-age population of those 15 and older. Consequently, we expect brisk consumption and strong economic growth to outstrip population growth. We therefore view Asia as an attractive region from two perspectives: as a consumer market and as a production base.
Under these conditions, the Retail Division’s basic strategy for value creation is to be on the forefront of changing needs in Asia and to construct wide-reaching and strong value chains in cooperation with its excellent partners, in order to establish a retail platform.
Creating value in Asia as a consumer market
Under the Medium-term Management Plan 2017, we are pursuing initiatives that embody this strategy. Focusing our attention on growth in demand for food products in consumer markets, we are accelerating the development of food and retail-related value chains in step with advancements in each Asian country. In Vietnam, where we have regional advantages in these industries, our food wholesale subsidiary Huong Thuy Manufacture Service Trading Corporation aims to capture the number-one position by (1) enhancing its logistics infrastructure to accommodate market growth and (2) by strengthening its merchandising capabilities, among other measures. In 2015, we partnered with Ministop Co., Ltd. in the convenience store business. In addition to expanding the store network, in 2016 we constructed and began operating a factory for producing precooked dishes in an industrial park as an initiative in the upstream food product manufacturing business. In Myanmar, we have partnered with the City Mart Group, the leading retail logistics group in the country, to operate a wholesale and logistics business that employs a three-temperature logistics system and to begin operations of the food court business from March 2017. In addition, we are constructing the foundation for supplying the eating out business. In Cambodia, we formed a business tie-up with the Goodhill Group, which has a nationwide wholesale network. Our aim here is to jointly develop a wholesale business centered on frozen, refrigerated and commercial-use food products to meet growing market demand in these sectors, strengthen the cold supply chain and establish operations for the food service industry wholesale business.
We are also pursuing business development in direct marketing. In April 2016, we established a capital and business tie-up with Tri-Stage Inc. to enhance the functions we provide in the ASEAN region through a TV shopping channel business and entered omnichannel retailing, which combines brick-and-mortar stores with TV and online sales.
Having secured stable earnings sources, we will focus on creating new businesses
In terms of the speed at which we create new businesses as a Division, there is still room for improvement. We aim to have in place an earnings foundation that can generate stable profit.
Sources of funds to take on greater challenges have also increased, so we intend to focus on creating new businesses to build an overall business portfolio with a high level of stability and growth potential. When developing new businesses, it is important to optimize risk-return tradeoff and swiftly and decisively capture a market. As a division, we are moving forward with our initiatives at a fast pace, placing an emphasis on information sharing and communication.
The Retail & Lifestyle Business Division’s networks within Japan and throughout Asia are the strength that drives its value creation. However, we believe the existence of these networks should be attributed to the unique capabilities of our employees, in whom we have fostered a challenge-taking spirit. As the division closest to consumers, we can easily grasp their demands/ needs and serve as a central force in strengthening coordination with other Sojitz divisions to create businesses that generate synergy. We thus contribute greatly to increasing Sojitz’s corporate value. Looking ahead, we intend to build on these strengths and unique functions by nurturing our employees to become a group of high-performance businesses known for their trustworthiness and high aspirations. That is how we will accelerate value creation.
|▶||Diversification of consumer tastes due to growing internal demand from the expansion of the middle class as a result of economic development in Asia|
|▶||Lifestyle-related changes in Japan and emerging countries|
|▶||More opportunities to introduce Japanese products and services due to increasing tourist and business traffic to Japan|
|▶||Greater opportunities for new investment due to an increase in demand for environmentally-sustainable products and high value-added products|
|▶||Risks associated with revisions to legal and other regulatory systems in Asian countries|
|▶||Higher costs due to tightening of quality control regulations in response to heightened attention to food safety in Asia|
|▶||Revenue-related concerns stemming from rapid fluctuations in exchange rates|
|▶||Rising social risks (human rights and environmental issues) in manufacturing countries|