CEO Message

Constant Reassessment of Value Proposition

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• I am always asking myself what constitutes our value proposition and what functions we can supply.

  Working at a general trading company requires one to continually be looking forward, predicting future changes in order to act in advance of these changes. If we wait until we are pressed to act by the market or by our partners, we cannot claim to be independently creating value. This is why our people need to be able to think proactively to reassess their own strengths and functions in order to create new value. Today, we are seeing rapid progress in AI and other technologies. These technologies mean that there is no need for people to perform routine work that is an extension of the status quo at a general trading company like Sojitz.

  Sojitz’s mission as a general trading company is to deliver goods and services where there is a need. Fulfilling this mission does not mean continuing to depend on a specific business. Rather, it is imperative that we constantly create new businesses. Sojitz can trace its roots back to its three predecessor companies established more than a century ago. Our DNA is defined by the future forecasting, the innovative transformation, and the challenge-taking spirit fostered over our long history. This DNA inspires us to be self-directed and to think proactively in order to predict diverse social needs through foresight, to seize change as an opportunity, and to transform. We will create new businesses through ambitious challenge-taking initiatives. This is how we will craft the Sojitz Growth Story.

Commitment Toward People

If one wants to become the type of person capable of thinking independently and creating value through preemptive action, it is essential to adopt a self-directed and proactive mindset. This is not a practice that can be mastered in a day. When I was COO of the Chemicals Division, I poured a great deal of time and energy into fostering this mindset. Initially, members of the division spent each day delivering product orders as requested by customers and taking a passive approach by visiting customers to inquire about their needs. This cultural practice was deeply ingrained in the organization. However, I soon came to realize that this was not a sustainable growth strategy and that insistence on this approach would see diminishing returns. I sought to rectify this situation by making ongoing efforts to train members of the division through one-on-one meetings. These meetings were not just your run-of-the-mill sit-downs, but rather forums for self-directed thought and new discoveries. I continued to hold these meetings for two years. It is easy to say we need to adopt the habit of thinking proactively, but putting it into practice is more difficult. At first, only a handful of people were implementing this proactive mindset. Nevertheless, I kept arranging these one-on-one meetings. And as a result of this effort, the number of self-directed thinkers in the Chemicals Division steadily grew, as did our earnings power. People are the driving force behind all business activities, and a company cannot hope to grow if its people do not. I am currently moving forward with dedicated efforts to extend the successes I had with the Chemicals Division throughout the entirety of Sojitz.

• The time spent at work represents a significant portion of our lives, and this is why I want everyone to find motivation and job fulfillment. This raises the question of what makes people feel empowered. I believe that a feeling of empowerment comes, not when we are just doing what we are told to do, but when we are thinking and acting on our own accord. Such feelings of empowerment have a way of energizing people and inspiring them to think even more about what they can do in their work. Encouraging independent thinking and increasing the number of employees who feel empowered on the job will no doubt create a cycle that is beneficial for employees, customers, partners, and Sojitz alike. I want to ensure that as many people as possible feel excited to start their day at Sojitz. This is my commitment toward people.

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Progress in First Year of Medium-term Management Plan 2026

We have completed the first year of Medium-term Management Plan 2026. While certain measures prescribed by the plan are behind schedule, I believe I can say that we are generally on track to accomplish the plan’s goals. In quantitative terms, return on equity (ROE) came to 11.7% while profit for the year (attributable to owners of the Company) amounted to ¥110.6 billion. Both of these figures represented strong progress toward the plan’s targets of ROE of 12% or above and profit for the year (attributable to owners of the Company) of ¥120.0 billion or above, on a three-year average basis.

The basic concept for our advancement toward the next stage can be expressed in the following vision: “We will realize the Sojitz Growth Story by leveraging our unique strengths and competitive edge.” I feel that this approach has been embraced throughout the Company and that we have been successful in getting everyone on the same page over the past year. When we first launched Medium-term Management Plan 2026 and started incorporating it into our actual operations, we found that there was some disparity regarding the approach we should be taking between management and the business divisions responsible for implementing the plan. If we were to move forward with strategies without addressing this disparity in understanding, we would be at risk of wasting resources and time due to the misalignment in how we prioritize funds, people, and businesses. Fortunately, we were able to develop a clear and shared vision for Sojitz going forward through an ongoing process of communication and discussion that spanned the year. This shared vision has enabled us to more effectively allocate people and funds to the areas warranting strategic attention. It took a bit longer than I had expected, but I still feel that we made strong progress in the first year of the plan.

After the announcement of Medium-term Management Plan 2026, we received a great number of questions from stakeholders regarding the Sojitz Growth Story. One answer we provided to this question had to do with our approach toward business, specifically how we broaden and build upon businesses to accelerate our growth. However, I am aware that we cannot hope to gain the understanding of our stakeholders if we cannot offer clear examples showing our successes in generating earnings from new business investments or in growing existing businesses. While only a start, I do have some concrete examples I would like to share that illustrate successful efforts to promote the Sojitz Growth Story.

One such example would be our retail businesses in Vietnam. This was an example that we also cited when announcing Medium-term Management Plan 2026. In these businesses, we have been investing in areas in which Sojitz boasts expertise, ranging from wholesale to distribution and retail, with a focus on consumer goods. We have already completed the major investments to be conducted in these businesses. By broadening and building upon these businesses, we aim to form revenue-generating clusters of businesses (Katamari) and thereby bolster our earnings power. These businesses will thus continue to be areas of focus.

Another area where we are developing operations based on Sojitz’s tried-and-true functions is our infrastructure businesses in Australia. Past successes in the country include our investment in the New Footscray Hospital public–private partnership project in Victoria and our development of the Edenvale Solar Park in Queensland. Furthermore, we acquired Victoria-based Ellis Air Group Pty Ltd., which was converted into a consolidated subsidiary in May 2023. The business of this company entails the proposal and implementation of energy-efficient engineering and services at customer buildings. Ellis Air also offers energy-saving services such as air-conditioning equipment design and installation to hospitals, data centers, and other private-sector customers. Leveraging this public–private partnership experience and our network in Australia, we were able to conclude an agreement for the purchase of shares in major Australian infrastructure developer Capella Capital Partnership, located in New South Wales, and in an investment platform managed by Capella in January 2025. Welcoming Capella into the Group has positioned Sojitz to adopt a lead developer role through which it will comprehensively handle infrastructure-related processes spanning from development to asset management. These capabilities will enable us to secure multiple revenue streams after the development of infrastructure projects, thereby contributing to more stable earnings.

The real strength of a general trading company can be found in its integration capabilities. Taking our infrastructure businesses in Australia as an example, there have been many cases of Sojitz being contracted to perform construction together with partners or joining projects midway in the process and taking on key responsibility for operations. However, our involvement has generally excluded the development phase, which is typically handled by established local companies. As the direction of a project is not quite clear at this initial phase, such early involvement requires an integrated approach toward planning, finding funding for, and ultimately developing the project. This is why our involvement in a project has most often followed the development phase with mid-project investment. However, if we can act as the lead developer, as is made possible by our investment in Capella, by getting involved in development at the early phases of a project, we will be able to achieve higher capital efficiency. Sojitz’s ability to invest in such infrastructure businesses is a product of its capacity for large-scale investments made possible by its strong financial base as well as its track record in the Australian market. In other words, we were able to take advantage of these investment opportunities thanks to the foundations we have worked hard to build since Sojitz was founded. Involvement starting from the development phases of projects will certainly give us the opportunity to expand our track record. At the same time, it will grant us access to information and networks previously unavailable to us, which should lead to further value creation opportunities. Going forward, we will look to expand our operations within Australia while also branching out to other regions, such as the Middle East, Central Asia, and developed nations in Europe and the Americas. By broadening the scope of businesses where we have functions for taking advantage of investment opportunities and achieving success in business investments, we will present a clear picture of the Sojitz Growth Story.

“KATI” Model Growth Strategy

In Medium-term Management Plan 2026, we introduced the “KATI” model for guiding the growth strategies we will use to craft the Sojitz Growth Story. Prior to the introduction of the “KATI” model, there was discussion on how we should try to identify our competitive advantages and points of differentiation in focus business areas and then define clear growth strategies. Our first step in this process was to categorize the positioning of our past investments and the approaches to be taken toward investment in the future. This led to the creation of the “KATI” model as a framework for investment decisions. The “K” of the “KATI” model is for Katamari. While simply growing existing businesses does not in itself constitute a “strategy,” we do intend to expand the scale of our existing businesses. At the same time, however, we recognize that excessive focus on growth in existing businesses can lead us to fall into the trap of continuing to pursue the status quo. Building Katamari, meanwhile, also requires expansion into new markets by leveraging our functions, the “A” for “addition” in the “KATI” model, as well as “transformation” based on foresight, the “T” of the model. In this manner, a true strategy charts a course for our business based on an assessment of current conditions and functions and those we look to enhance or acquire moving forward. The last component of the “KATI” model is the “I” for “innovation.” This represents the limitless potential of the future business areas we have yet to discover. To help shape the future through innovation, we will continue to optimize resource allocation from a Companywide perspective in search of new wellsprings of value.

Enhancement of Resilience to External Factors

It is true that we have been seeing success in crafting the Sojitz Growth Story. Some businesses, however, are not progressing as planned.

When we look at such businesses, it is often the case that the grounds on which we based our investment decision were highly influenced by market growth or other such external factors. However, these grounds for investment can be undermined by unforeseen deterioration in market conditions, resulting in a failure to generate the anticipated earnings. In these cases, blame is often attributed to external factors beyond control. However, if we do not delve further, we will be unable to learn lessons from these experiences to guide us in the future. We should not just invest because a market is growing. Rather, it is crucial for us to base investment decisions on thorough examinations of whether Sojitz can exercise its functions or establish a competitive edge in the field in question. This approach is something we must implement throughout the Company. For businesses that are currently not progressing as planned, we may sometimes need to make the decision to divest due to changes in the operating environment. Before we exercise this last option, though, we must first seek to look at Sojitz’s inherent strengths and decide, on a business-by-business basis, how we can get back on track. We have already begun turning some businesses around to head in the right direction through this approach.

When examining Sojitz’s functions and competitive edge, employees need to be able to think proactively and adopt an objective perspective. To keep such examinations from becoming centered on individual opinions, I encourage people to talk in the third person, as opposed to speaking in the first person. It is only natural for employees on the ground to want to continue to advance the projects they are directly involved in. When thinking about the projects we should be involved in as an organization, however, an objective perspective is of paramount importance. We must therefore work to cultivate this perspective on a Companywide basis.

Raising of Awareness to Accelerate Digital Transformation

Digital transformation has been positioned as one of the strategic focus areas of Medium-term Management Plan 2026. In the plan, we also introduce our “Digital in All” concept, which calls for us to embrace digital technologies in all of our businesses. This decision was made based on the understanding that effective data utilization is imperative to the improvement of profitability in existing businesses and to the creation of new businesses.

Our current frameworks for promoting digital transformation are primarily focused on three approaches: earning with digital technologies, specifically through collaboration with Group companies and other partners; improvement of value with digital technologies, an undertaking to be pursued on an individual-project basis together with business divisions; and development of digital infrastructure, which will be advanced by dedicated internal organizations. While the techniques for utilizing data can usually be found in the hands of dedicated divisions or specialized Group companies, it is the people on the front lines that engage with that data who are thus best able to understand its value. As a general trading company, Sojitz is engaged in various investments and businesses with opportunities to gather massive amounts of diverse data. Effective data utilization requires innovative approaches to determine when data can be used in a different manner to generate value and what types of data can be combined to create new value. While this type of thinking requires time and presents an added responsibility for employees in the course of their everyday activities, it is an important task. Thinking about data is not something we can just leave up to the people in the digital technology division; it is something everyone at Sojitz must do. To ensure that we do not underutilize our digital technology teams and organizations or squander vast amounts of data, it is essential that we raise awareness for accelerating digital transformation by increasing opportunities for exchange between digital technology organizations, Group companies, and frontline organizations.

Advance Toward the Next Stage

Sojitz has defined profit for the year (attributable to owners of the Company) of ¥200.0 billion, ROE of 15%, and market capitalization of ¥2.0 trillion as its targets for the Next Stage. To achieve this rapid growth, we will need to change our approach with regard to strategies, mindsets, and organizations. These changes in approach will be guided by the self-directed and proactive thinking I have discussed thus far, which will be based on the “KATI” model and the basic policies described for the growth strategies of Medium-term Management Plan 2026. If Sojitz can come to function as an organization filled with individuals capable of thinking proactively and acting in advance of change, it is sure to help us create new businesses and thus become a driver of our growth. We have only just finished the first year of our mediumterm management plan, but everyone at Sojitz remains united in the goal of advancing toward our next stage—and I feel that we have made tangible progress toward this goal.

Reflecting on the past year, I see firsthand the importance of continuing to reiterate key points. If you only say something once, it will not spread throughout an organization. If you do not continue to express how you feel, you will not succeed in inspiring change. As president, my role is to lead Sojitz in crafting the Sojitz Growth Story and advancing toward its next stage. I will thus be devoting my efforts to helping Sojitz further hone its strengths and the competitive edge and other tools it uses to succeed in specific businesses while disclosing our successes in this regard in a timely manner. I thereby hope to make you feel excited about the future of Sojitz. As of June 30, 2025, we had still not reached our targeted stock price, and the price-to-book ratio was only 0.77 times. I recognize the management issue this represents, and I am committed to improving corporate value and shareholder value to address it. I hope we can look forward to our stakeholders’ ongoing understanding and support.

July 2025
Kosuke Uemura
Representative Director, President & CEO