Sojitz Corporation

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Consumer Industry & Agriculture Business Division

With the objectives of contributing to sustainable production and consumption, the Consumer Industry & Agriculture Business Division is developing operations in the fields of agribusiness, foodstuffs, animal feed, livestock, forest products, and regional economic development.

Strengths of the Division

  • Development of a wide range of businesses mainly in Southeast Asia, such as fertilizer production, feed production, grain port operation, flour milling, bakery products, confectioneries, building materials, afforestation, woodchips, and papermaking
  • Establishment of a top-level market share in the production and sale of compound chemical fertilizer in Thailand, Vietnam, and the Philippines
  • Participation in one of the largest biomass power plant projects in Japan, utilizing a stable woody biomass resource procurement network

 

External Environment

Opportunities

  • Diversification of lifestyles in Asia
  • Increase in demand for foodstuffs and essential consumer goods due to population growth and economic development in Southeast Asia
  • Growing need for the safety, security, and sustainability of food
  • Greater emphasis placed on sustainable procurement of lumber resources amid growing environmental awareness

Risks

  • Price fluctuations due to an imbalance between supply and demand caused by climate change and changes in government policies
  • Pressure on business revenue due to sudden fluctuations in exchange rates

Growth Strategy

We are developing new business models that see opportunities in global trends toward local production and consumption, decarbonization, and resource recycling.

Yuji Yuasa

Executive Officer, COO
Consumer Industry & Agriculture Business Division

The Consumer Industry & Agriculture Business Division sees business opportunities in the massively changing operating environment characterized by the trends emerging as the world prepares to move past the COVID-19 pandemic, the turbulent global conditions, and the pursuit of the United Nations Sustainable Development Goals. Maintaining an eye on the Japanese market, we are looking to incorporate market growth in response to megatrends and thereby bolster earnings power with growing Asian markets as our main focus.

In the fertilizer business, where we boast strong market shares in Thailand, Vietnam, and the Philippines, we are applying digital transformation methodologies to our current business model, which is based on our wide-reaching network, to transition to a model for developing agricultural platforms based on a market-oriented perspective.

In the food business, we are branching out from feed production in Vietnam to enter into the livestock industry in order to contribute to a stable supply of proteins in Southeast Asia. Meanwhile, with our value chain stretching from flour milling to bakery products in the Philippines, we are growing businesses that address the needs of this country by enhancing digital and other marketing activities.

As for forest products, initiatives are being ramped up in our traditional woodchip production business as well as in our biomass-related and forest management businesses and our Vietnamese household paper and industrial paper product business. We thereby aim to develop businesses that contribute to the development of local communities while preserving the global environment.

Meanwhile, we are working to promote regional economic development through businesses that contribute to the local production and consumption of items like biomass fuel materials and feed for cattle. Specific examples of initiatives include using idle and other land to plant fast-growing Japanese aspen trees, which can be harvested in a mere five years, and sorghum, a Poaceae plant.

A focus on circular economies as well as market-oriented perspectives will be incorporated into every business in order to ensure that our business models are enduring and contribute to decarbonization.

Businesses

Business Map

Atlas Fertilizer Corporation(Philippines)

Saigon Paper Corporation (Vietnam)

■Strengthening and Expansion of Fertilizer Business

We aim to expand sales by implementing detailed promotion strategies for each region and each type of agri-product in Thailand, Vietnam, and the Philippines, by increasing exports to neighboring regions, and by implementing digital transformation. We will also develop new businesses matched to the needs of agricultural workers, in the areas of agriculture, finance, and information, by capitalizing on the long-standing initiatives of our fertilizer business, which has firmly established roots in local areas.

■Household Paper and Industrial Paper Product Business

In June 2018, Sojitz invested in major Vietnamese papermaker Saigon Paper Corporation, thereby entering into the household paper and industrial paper product business in Vietnam. We have responded to the rising demand in this business through investments in production capacity augmentations and production efficiency improvements. Moreover, Saigon Paper is taking advantage of Sojitz’s varied lifestyle business networks in Vietnam to expand its sales channels.

■Building Material Business

Sojitz supplies plywood, an area of expertise, as well as log housing materials (fiber boards, lumber products, building materials, housing fixtures and equipment, solar panels, LED lighting) while also providing construction and installation services in a wide variety of areas of the domestic market. With an extensive global procurement network, we are able to secure a stable supply while helping preserve the environment.

■Domestic Agriculture Business

Established in June 2022, Sojitz Nogyo Corporation is building systems that enable the year-round supply of GAP-certified agricultural products nationwide. One initiative through this company is the trial production of onions in the Tohoku region. This trial was launched together with producers in Akita Prefecture and the National Agriculture and Food Research Organization with the goal of making the Tohoku region a producer of grown-in-Japan onions that can be supplied year-round.

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Collaboration

Vietnamese Livestock Integration

In September 2021, Sojitz established Japan Vietnam Livestock Co., Ltd., together with Vietnam Livestock Corporation JSC, a member of the Vinamilk Group, a major Vietnamese dairy product manufacturing conglomerate. Half of the investment for establishing this company was made by the Retail & Consumer Service Division, which oversees beef import and sales subsidiary Sojitz Foods. Japan Vietnam Livestock is able to take advantage of the strength of the Vinamilk Group’s local operating foundation in Vietnam, which allows it to use Holstein bulls and cows that have given birth, as well as Sojitz’s Japanese processing technologies and beef marketing capabilities. We are developing a business model that combines these strengths to stimulate beef demand in Vietnam and incorporate the growth potential of this market.
Moreover, a memorandum of understanding for joint development of cattle fattening, processing, and sales businesses was concluded between Vietnam’s Vĩnh Phúc province, the Vinamilk Group, Japan Vietnam Livestock, and Sojitz in November 2021. This massive project, entailing a total investment of more than U.S.$500 million, is set to commence in 2023.

Regional Economic Development

Comprehensive Agreement with Miyazaki Prefecture’s Kawaminami Town

In May 2022, Sojitz signed a comprehensive collaboration agreement with Kawaminami Town, Miyazaki Prefecture, regarding regional economic development activities centered on invigorating the agricultural industry. Under this agreement, Sojitz will work together with Kawaminami Town to invigorate the local economy and thereby contribute to sustainable agriculture and a more energized community. Specific venues for the collaboration will include biomass energy, new high-profit crops, and smart agriculture. As our first step in these efforts, we are teaming up with local agricultural workers to cultivate highprofit crops alongside Sojitz’s fast-growing tree business.

Organization

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