Sojitz Corporation


2016 New Year’s Address (Summary)

Jan. 4, 2016
Sojitz Corporation

Sojitz Corporation would like to wish all its stakeholders a happy new year. We hope 2016 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 all Sojitz Group members at the Company’s head office on January 4, 2016.

Happy New Year, everyone.
It would appear that my New Year is off to a crisp, clean start; I was able to see the whole of Mt. Fuji, down to the base of the mountain, underneath a clear, cloudless blue sky during my vacation. How did you spend your New Year break? I hope that all of us are ready to start 2016 refreshed.

Looking back, 2015 was a year full of global events which will have a lasting impact on our business as a general trading company.

From the beginning of the year to the start of spring, rumors spread that Greece, struggling with debt problems, might secede from the European Union. A sense of anxiety about the country’s uncertain future hung in the air. In the ensuing months, Europe found itself rocked by the influx of refugees developing into a major issue, as well as the tragic terrorist attacks in Paris which yet remain fresh in our minds. Despite the crises of Europe last year, the European countries showed the lengths to which they were willing to go and the sacrifices they were willing to make in order to maintain the EU.

In China, the slowing of the economy coupled with the rise of shale gas and shale oil served to keep commodity prices down. This impacted us in no small measure, given that natural resources like this still constitute a large segment of our company’s business. The events of 2015 drove home how China’s influence continues to grow year on year. I have no doubt that the policies put in place by China as they aim to enter the ranks of the developed nations will continue to have wide-ranging effects on the rest of the world.

The conclusion of TPP negotiations and the establishment of the ASEAN Economic Community (AEC) last year also provoked a discussion about how more advanced nations will respond to emerging economies in the future. It feels as though markets and related parties will need to dynamically transform themselves in order to fit within this new framework.

In this way, I think last year can be summarized as one in which large-scale, global changes forced us to confront how we will respond to those changes as a trading company.

Looking at this year, on the other hand, we see the U.S. is scheduled to hold its presidential election. You could say that this event will have a massive impact on the future of America—practically the sole country responsible for maintaining the current stability of the global economy.

Also this year, the first Olympics in South America will be held in Rio de Janeiro in August.

Many events are planned for Japan which will require our attention as well. For example, Prime Minister Abe Shinzo’s set of fiscal/economic policies (the so-called ―Abenomics‖) will head into its most critical phase, prompting the business/political sectors to implement varied reforms in preparation for future changes to the Japanese economy. We also will need to meet these changes head-on and help boost the Japanese economy throughout all sectors. Also this year, Japan will change its voting age from 20 to 18 alongside several amendments to the Public Offices Election Act—a move designed to bring in more voices from younger generations. Considering Japan’s aging population, I see this as an extremely positive move. Ensuring that younger generations are equally represented starts with fixing these kinds of structural problems, making this a vital piece of reform for Japan.

Trading companies such as ourselves will also be caught up in the various structural reforms and policies happening this year.

As you are aware, 2016 represents the second year of Medium-term Management Plan 2017 – Challenge for Growth –. We must meet our goals for this fiscal year and use the second year to build upon that success. You could say that this period of shoring up our foundations while simultaneously identifying, anticipating, and responding to large-scale changes represents a critical juncture in this plan. Considering the bigger picture and the situation as it stands, it is vital that we fully comprehend the timeframes for projects, the regions in which we conduct business, and our products. Each of these elements exerts its own influence on our business, and it is precisely because we, as a trading company, intersect with the market at so many points that we are susceptible to that influence. Without a doubt, this year will demand we correctly understand the environment in which these elements exist, challenge ourselves while anticipating what’s to come, and make bold decisions.

Essentially, the trading company business model has been able to survive until now by responding to changes in the environment; it’s what we’re good at. Now, as we face this period of great change, it is time to show our worth as a trading company through our adaptability and readiness to challenge new business. As we work to achieve the goals of the Medium-term Management Plan as well, I would like everyone to think back to when you first joined the company, to see the situation with fresh eyes as we respond to these changes.

From time to time in the past, we have felt the acute impact of large-scale changes to the business environment, and we shall surely be subject to similar changes in the years to come. The most effective way to handle this, however, is to keep our eyes focused on the options ahead, choose the road best taken, and exercise good judgment as we boldly try new methods of dealing with these changes, based on the missions held by each of our organizations. We should have pride in the fact that our company has surmounted major changes in the past, ride out the any new turbulence in 2016, stay focused on the path which will allow us to achieve the goals of Medium-term Management Plan 2017, and help the company edge its way into markets where we can build a strong business foundation.

In the Chinese sexagenary cycle*, the stem and branch combination for this year is “fire yang” + the monkey, which we call hinoesaru in Japanese. The 10-stem and 12-branch system is so called due to the way it was originally likened to the growth of a tree, with the “fire yang” (hinoe) of this year taking on the separate meaning of “taking shape” or “visible growth.” Similarly, the monkey (saru) appellation for this year connotes “the point at which the fruit blossoms and becomes firm.”

I believe that 2016, this hinoesaru year, is thus perfectly matched to our mission of “Challenge for Growth.” This year, may our growth have lasting, visible impact which heralds the maturation of our future achievements.

To conclude, allow me to wish all Sojitz Group members around the world health and happiness in the New Year.

*The Chinese sexagenery cycle is a traditional Chinese calendar which repeats every 60 years. Each year is made up of one of 10 “heavenly stems” which is combined with one of 12 earthly branches. Each of the stems corresponds to either yin or yang, as well as one of the five traditional Chinese elements: fire, water, metal, wood, and earth. The 12 branches correspond to the 12 animals of the Chinese zodiac.

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