2015 New Year’s Address
Jan. 5, 2015
Sojitz Corporation would like to wish all its stakeholders a happy new year. We hope 2015 proves to be a wonderful year for each of you.
The following is a summary of the New Year’s address given by President Sato before Group employees at the Company’s head office on January 5, 2015.
Greetings, I am happy to usher in the new year of 2015 with this address.
I hope that all members of the Sojitz Group contributing to our development in Japan and overseas were able to start this new year with a refreshed mindset.
Looking back at 2014, we witnessed the accelerated transition toward an era characterized by Asia being a central world force. Major developments on this front included the appointment of several revolutionary new leaders in principal Asian nations, such as Prime Minister Narendra Damodardas Modi of India and President Joko Widodo of Indonesia. Turning to the economy, conditions were less than favorable in both developed and emerging countries. In Japan as well, the economy suffered as private investment and consumer spending trends lacked the anticipated levels of strength, counteracting the benefits of the depreciation of yen and rise in stock prices that continued throughout the year.
In 2015, the United States will continue to institute strategies targeting a return to the growth track and a departure from monetary easing followed by a rise in interest rates. The global economy is anticipated to experience year-on-year growth on the back of the improving U.S. economy as well as brisk economies in certain emerging countries. China, however, is not included among these countries. In fact, the global economy is expected to grow even in the face of concerns such as the possibility of economic slowdown resulting from a drop in resource prices as well as issues revolving around the Ukraine. At the same time, it is expected that there will be an accelerated race to take advantage of economic growth in countries rich in natural resources and blessed with growing work forces. Of particular note with this regard is the group of four countries that has come to be known as “MINT,” which consists of Mexico, Indonesia, Nigeria, and Turkey. These countries are viewed as new, promising emerging countries in the same vein as the BRICs countries, by which I mean Brazil, Russia, India, and China.
In Japan, meanwhile, there is a need for the Abe administration, which remained in power following the most recent general election, to institute concrete measures for combating deflation and realizing robust economic growth going forward. In particular, a great deal of anticipation is being directed toward growth strategies for stimulating private investment. In 2015, we expect to see steady progress in deregulation as well as the promotion of free-trade agreements, such as the Trans-Pacific Partnership and Economic Partnership Agreements. I thus believe that 2015 will be a year in which private-sector companies, aided by this unconventional “government support,” play a major part in recovering the domestic economy.
As a general trading company, Sojitz is charged with the responsibility of contributing to the recovery of the Japanese economy. As one facet of our efforts to accomplish this task, we will cultivate new export businesses both in Japan and overseas. We should use these businesses as an opportunity to give rise to new initiatives by reaffirming the value that can be offered by Japan and its people and by creating new value originating from these sources. I am confident that these efforts will end in success if we are able to find new ways of combining Sojitz’s strengths as a general trading company, which include its robust overseas network and specialties in market development. At the same time, we must continue to respond to the needs present on domestic shores, including the need for securing, procuring, and supplying the various resources required for the future. Through these efforts, I believe we will be able to help guarantee that the Japanese economy can maintain its vigor for years to come.
March 31, 2015, will mark the end of our current management plan, Medium-term Management Plan 2014 – Change for Challenge, and April 1 will thus signal the start of a new medium-term management plan. I understand you are all currently in the process of discussing, in your respective divisions, the growth strategies that will form the central pillars of the new plan.
In selecting the areas in which you will conduct business, it is important that you have a clear vision of how you will proceed together with concrete strategies and focus points. If you are unable to comprehensively review the markets with which you have connections, breaking away from preexisting conventions to flexibly create new innovations, you will fail to expand the scope of your business and advance into new fields. You must consider what functions you can provide in order to create new value. At the same time, you need think about what you lack in this pursuit as well as the amount of time that will be required to remedy these deficiencies. Once these plans have been developed, they should be quickly advanced while coordinating with management. If this approach is adopted, it is only natural that Sojitz’s business speed will increase.
Throughout Sojitz’s entire history, our predecessors have continued to strengthen the functions that can be seen as the very heart of the Company’s business as a general trading company. By utilizing these functions to create new value, our predecessors have weathered the various ups and downs of the economy and constantly adapted to the ever-changing operating environment. Always maintaining a fresh perspective to give rise to new ideas in order to forge a quality asset portfolio from which Sojitz can benefit into the future, this is the conviction that should guide us as we move forward.
I may be repeating myself and this may not even need to be said, but the operating environment varies for each division based on their region and products as well as the needs of their business partners. Of course, the functions required vary as well. For this reason, I encourage you to make a rational evaluation of these factors in order to develop the business and growth strategies that best match your division.
Sojitz celebrated the 10th anniversary of its birth in 2014. In light of this momentous event, we revised the Sojitz Group Statement and developed new guiding principles. Over these 10 years, we integrated Sojitz’s predecessors, different companies with different histories and cultures, and moved forward to overcome the various trials that were placed before us. I am quite confident that the foundations for supporting Sojitz’s future growth are being steadily formed.
Today, more than a decade since the birth of Sojitz, we stand united as one. The year of 2015 is year of the sheep under the Chinese Zodiac.
As symbolized by the Chinese character for the year of the sheep, I want Sojitz to advance into the future with a vigorous spirit, tapping the unmeasurable potential to be found through new initiatives and in unexplored regions*.
In closing, I hope that this new year is a year of health and strong performance for each and every one of you.
* The Chinese character for the year of the sheep under the Chinese Zodiac is modeled after a tree in its youth whose branches have yet to grow to their full length. Drawing upon this origin as a metaphor, this sentence suggests that Sojitz should use this year as a time for reaching out and realizing its potential, much like the young tree extends its branches to reach its full glory.