Happy New Year, everyone.

The New Year’s holiday in Japan this time was comparatively shorter, but I hope you were able to refresh your minds and bodies over the break. Although I spent most of my vacation at home, greeting the New Year together with my family, I had the opportunity to watch the first sunrise of the year from an airplane on the morning of New Year’s Day. I feel that watching the sun rise over Mt. Fuji from the plane renewed my resolve for the coming year.

Looking back at 2017, we see the political landscape dominated by President Trump, with his inauguration precipitating the U.S.A.’s departure from the TPP and the Paris Agreement, as well as problems with North Korea. On the economic front, however, it was a comparatively strong year. The U.S. saw healthy growth, China’s economy stayed buoyant, and Europe gradually regained its positive economic outlook. Japan shored up its political foundation with the Abe administration’s overwhelming victory in the general election and saw its stock prices rise, bolstered by higher stock prices in the U.S. Our company also made healthy progress towards our financial closing, thanks to our Sojitz members around the world.

Today marks the start of 2018. While prevailing opinion is that economically speaking, 2018 will continue the kind of healthy growth we saw last year, the first few days have already seen the U.S. and North Korea arguing over who has “the bigger nuclear button,” placing us in a situation that requires continued vigilance.

There are only three months left to meet the targets of Medium-term Management Plan 2017. I believe that for me, the most important thing this year will be to work together with all of you to ensure we successfully meet the goals of the current Medium-term Management Plan and fully link our work during these three years to the next Medium-term Management Plan, scheduled for announcement in May.

Since becoming president last June, I have often taken the opportunity to mention three important concepts for our company: 1) stronger genba-ryoku^(*1); 2) speed; and 3) innovation. These words have come up time and time again in my daily talks with employees. I would like to take this opportunity to reiterate these three points which we will continue to pursue in the new year.

First, with regards to strengthening genba-ryoku: remember that both successes and failures are vital to shosha businesspeople. These become genba-ryoku—that is, the kind of genba-ryoku that comes from greater shared knowledge at the work site, passed down through OJT and created anew by allocating work to those with motivation and ability regardless of age. At training seminars for employees at the general manager or manager level, I ask them to give their organizations a little breathing room. I say that in terms of meeting targets, I understand that you might feel it is difficult to take fresh graduates under your wing as new employees, but the kind of organizations which are able to grow are those with the flexibility to accept new talent. I believe that organizations increase their genba-ryoku by passing work on to the next generation, themselves learning through the process of teaching. The new generation then masters that work before teaching it to their successors—and so on and so forth. I think that given some leeway, it is this kind of organization which gives rise to new opportunities. Increased genba-ryoku is extremely important to making that kind of organization a reality.

The second point I mention is speed. There have been more meetings of the Finance & Investment Deliberation Council recently with regards to approval for new investments and loans, and I feel that these deliberations are proceeding faster. However, I heard that in drafting the ringi documents for these deliberations, there is still much needless back and forth. I think it is vital we raise the speed both at which we draft documentation and hold these meetings. We mustn’t endlessly presume on the part of the approver; rather, we should submit it to them for approval as soon as possible. In this way, I believe we will gradually save time and raise our speed each day, increasing the speed of the entire company.

Last is innovation. I recently heard from a Waseda University professor about a model which graphs the search for knowledge against the depth of that knowledge, showing how innovation never starts at the intersection of these axes. I think that innovation is created through the evolution of the work we are already doing. For example, instead of looking solely at your product, try looking at the customer and where the customer is headed in the future. You may generate new ideas, and these ideas may lead to innovation. I want us to hold on to that open-mindedness, to create growth as we demonstrate who we are as a company—our “Sojitz Identity.”

One last thing I would like to mention is the initiatives we started last year to improve our working culture. At the end of last year, I walked throughout the head office, visiting each department. From what I heard from employees, we seem to be keeping overtime hours under the maximum 80 hours per month for the most part. And while there is still room for improvement in employees taking their paid leave, I heard that the average is around 3-4 days for departments that take fewer days, with an average 6-7 days for departments that take more^(*2). I feel that this change in working culture is gradually beginning to take root. While it is true that at the time I joined the company, we were taught working long hours was good for you professionally, this perspective has changed; people understand how going home earlier can actually improve your work capacity. This is what I tell managers today. I think we need to judge staff abilities not by how long they work, but by their achievements. Although I just praised our limiting overtime and our success in using paid leave, I think that we can further reduce overtime, far below 80 hours a month. Take inventory of your work, consider what really needs to be done, and assign priority in completing your duties over the next year.

This year is the Year of the Dog. I will be celebrating my 60 birthday this year, beginning my second trip around the 60-year sexegenary cycle of the Chinese zodiac^(*3). In fact, in the sexegenary cycle, 2018 is actually the year of “Yang Earth Dog.” This year is said to follow a time of devastation, when new buds bursting with life have finally bloomed and start to extend their stalks upward. For a company like ours, now in its 15^th year and poised for further growth under our new Medium-term Management Plan starting in April, this will be an extremely important year. Let us work together as I myself also pursue greater genba-ryoku and speed.

I pray that all Sojitz Group members and their families, in Japan and around the world, enjoy good health in the New Year. Thank you.