Happy New Year to all our stakeholders.
We at Sojitz pray that 2019 will be a wonderful year for you all.

The following is a summary of President & CEO Masayoshi Fujimoto’s New Year’s address to employees, given at Sojitz Corporation Tokyo HQ this morning.

Today marks the start of the 2019 work year, and the 31^st year of the Heisei era.  ^(*1) This year we will enter a new era as the Heisei period draws to a close, and we wrap up the first fiscal year of the Medium-term Management Plan 2020, and embark on the second year of the Plan. Working alongside Sojitz Group members in Japan and around the world, I would like to make this new era an outstanding one for Sojitz.

Looking back on the past year, while the global economy was relatively stable in the first half, the second half brought back uncertainty in world affairs, with increasing friction over trade between the U.S. and China, currency depreciation in developing countries after the U.S. raised interest rates, fears realized about the deceleration of the Chinese economy, and difficulties in negotiations over the terms of Brexit. On the other hand, this year felt like we were entering a new era characterized by greater efforts to create a sustainable society and greater demands for corporate governance, epitomized by an increasing disdain for micro plastics and coal-fired power generation and a wave of technological advancements and innovation. We must always keep an ear to the ground for signs of changes to the business climate, as it will become increasingly important for us to adapt with speed; although these changes bring risks, they can also represent opportunities.

As we welcome the New Year, I would like to reiterate three important concepts for the company that I spoke of in last year’s New Year’s address: 1) stronger genba-ryoku,  ^(*2) 2) speed, and 3) innovation. Over the past year, I took as much time as I could to pay on-site visits to our businesses both in Japan and overseas. Seeing everyone working so hard really demonstrated to me Sojitz Group’s capacity for continued growth.

As I’ve said before, we need employees young and old to actively work to acquire experience if we are to strengthen our genba-ryoku. By experience, I am not only referring to regular work duties like interacting with clients or managing shipments. Experience is also developing an awareness of day-to-day trends—whether in politics, foreign policy, geopolitical risks, interest rates, or foreign exchange rates—to anticipate future concerns that might arise, and formulate plans to address any potential issues in advance. Fostering this type of awareness is crucial to the people working on-site, as the ones most capable of identifying and managing such risks. I once again ask everyone to strengthen your ability to manage risks at the frontlines of the business, and take due care so that we are not set back by any incidents that could obstruct our otherwise strong efforts.

Second, I would like to talk about “speed.” We’ve taken steps to increase our speed by adopting a 9-division system, holding bi-monthly COO conferences, holding special conferences for the Finance & Investment Deliberation Council, and simplifying ringi documents. However, it appears that for each organization there are persons in charge on-site who end up withholding information, which impedes our speed. The head of each organization must offer clear direction and those below must take this direction into account to offer the optimal, most expedient proposals and promptly discuss any queries with management. In doing so, the parties working on-site will be able to reduce time spent struggling to resolve issues on their own. Please take the time to review your organization’s work style to increase speed. We cannot afford to lose opportunities and take on additional risk by operating at a slower speed.

Last is “innovation.” Innovation does not come about spontaneously. Innovation occurs when each person’s past experience converges with their knowledge and is realized within their business. We started running TV ads last year based on the theme of Sojitz as a company that realizes new business ideas. I would like everyone to use their experience thus far to realize innovative ideas for convenient products and services and worthy new endeavors. As I mentioned earlier, the world is evolving at a rate faster than ever before. The functions expected from our company are also rapidly changing. In order for our company to respond to these changes and continue to grow, we need to create innovation by encouraging everyone’s bold ideas, transforming these ideas into business, and having the grit to see these ideas through to the end.

This is the year of the “Yin Earth Pig,” the 10^th stem of the 12^th branch in the repeating sexagenarian cycle  ^(*3) of the Chinese zodiac. It is said to be a year in which fruit turns to seed, storing energy in preparation for the next generation. At Sojitz, we will demonstrate our ability to carry out our goal for the final year of the Medium-term Management Plan 2020, even without the influence of resource prices. Additionally, we will strive to put ourselves in a position by the end of Medium-term Management Plan 2020 to aim for  JPY 100 billion over the course of the next medium-term management plan. Our success will be contingent upon our performance over this coming year. Whether we can meet these goals will depend on how many productive assets we can develop this year. I would like you to pay attention to day-to-day progress in order to ensure that each division achieves its target for the final year of the Plan and delivers the promised 10% year-on-year growth. Steadily expanding our profits for each division will lead to further growth of Sojitz Group and create a strong, unwavering business foundation. Therefore, I would like you to work with a sense of urgency when it comes to making sure you achieve that which we set out to accomplish. Please consult with others if you have any matters of concern or difficulties with which you are dealing. It is up to us to ascend to the next stage to build the next era of the Sojitz Group together. Let’s come together to take on this challenge and develop businesses that both provide multiple functions and greater meaning for our company.

To conclude, I would like to pray for the good health of all Sojitz Group members in Japan and around the world in the New Year. Thank you.

1* Heisei 31: The final year of the Heisei era, which began in January 1989 when Prince Akihito acceded to the throne following Emperor Hirohito’s death. The Heisei period is expected to end on April 30, 2019 with the abdication of Emperor Akihito.

2* Genba-ryoku: refers to the combined capabilities of Sojitz Group members working on ground—in offices, at project sites, in meetings with customers and clients, and other places of work around the world.

3* 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 the 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.