President’s New Year’s Address for 2023
Jan. 4, 2023
Happy New Year, everyone.
Did you enjoy your year-end and New Year holiday with friends and family? I hope you are all refreshed and ready to begin this year with renewed energy.
Let us start the new year by first reflecting on the past year. Amidst the impacts from the ongoing waves of the Covid-19 pandemic, Russia’s invasion of Ukraine, accelerating inflation, interest rate hikes by global central banks, and disruptions to the supply chain, future projections have become increasingly difficult. At the same, Japan has reopened its borders and the flow of people and tourism is gradually returning. I sense society is seeking to establish a new normal in order to move forward.
In our financial results for the second quarter of FY2022, Sojitz’s profit for the period totaled JPY 78.9 billion, which is the highest profit recorded to date for the second consecutive year in a row. Additionally, we made an upward revision to our full year forecast to JPY 110 billion, which marks an all-time high. When I was first appointed president, I pledged a goal of JPY 100 billion in profit for the year, and this goal is now within reach. Although in part due to the impacts of foreign exchange and market conditions, our strong performance in this uncertain environment is thanks to the tireless efforts of Sojitz Group employees to reinforce the company’s steady earnings and risk tolerance. For example, business teams primarily engaged in trade have expanded beyond their previous role as tradesmen to gain an overview of the entire supply chain and proactively come up with service proposals geared towards customer needs. This approach has led to tangible results in driving earnings growth. While each individual project may not receive widespread attention, Sojitz’s current results are attributable to this persistence. I would like to express my appreciation to all Sojitz Group employees for their efforts, and I have great admiration for your pride as business professionals. You are all doing a wonderful job. Thank you.
This year marks the final year of Medium-term Management Plan 2023. It will be a critically important year before transitioning to the next medium-term management plan, which is to be drafted in the days ahead. As I mentioned, we soon expect to reach the JPY 100 billion benchmark and embark on the next stage. What actions are necessary to increase this amount to JPY 200 billion, or even 300 billion in the future? To reiterate, we must keep our sights set on raising productivity as there are clear limits to our time and resources. Furthermore, it is not only important to make new investments, but also to consistently monetize existing investment projects. When assessing the merits of a particular investment, one of the determining factors must be whether the project can stand alone. Completing an investment is not the end of the story. How will the project be carried out and completed? The phase after investment is where we can show off our strengths to meticulously oversee a project to completion.
On a separate note, Sojitz will celebrate its 20th anniversary next year in 2024. When Sojitz was first established, market recognition of the company was low. Particularly outside Japan, we struggled at initial meetings with the need to start off with an explanation of Sojitz’s basic profile. Sojitz has since built a track record of achievement, and our name recognition today is much higher. We have not only carried on businesses inherited from our predecessor companies but forged new partnerships as Sojitz in a range of business fields.
In anticipation of Sojitz’s 20th anniversary next year, we are leading an initiative to uncover Sojitz’s unique characteristics as a company.
Please take time to once again consider what type of company you would like Sojitz to become in the future.
I have previously announced Sojitz’s vision for 2030 is to become a general trading company that constantly cultivates new businesses and human capital. I’m often asked how Sojitz differs from other general trading companies or where Sojitz falls in the ranking order of all general trading companies. Even internally, we evaluate ourselves against other general trading companies and use this existing framework for comparative purposes. There are surely many instances in which we have used this framework to make evaluations and decisions. However, in some ways, this system of comparison can be limiting.
While it’s true that Sojitz identifies as a general trading company, how do we define a general trading company in 2023? Is it a business entity primarily engaged in trade? A manufacturer? An operator of esports tournaments? General trading companies can truly do it all. It is possible for us to use any company as a point of comparison. There is no need to limit our frame of reference to other general trading companies. Depending on the field, we might even look to a global company outside Japan or an up-and-coming venture company. As I mentioned in my new year’s address last year, our mission is to provide the necessary goods and services directly to places where there is a need. While this mission remains the same, there are infinite paths for how we achieve this mission. First, remove your preconceptions regarding general trading companies.
My hope is that Sojitz will be recognized as a company undertaking exciting projects in surprisingly ingenious ways. In order to achieve this aim, we must freely come up with new ideas and pursue inventive solutions as we move forward towards becoming a company that constantly cultivates new businesses and human capital. Take this opportunity to hold discussions to explore what sort of culture and core beliefs will serve as a foundation to promote our goals. Let us gather a group of the most exceptional individuals and business professionals to build a foundation that will enable Sojitz to become a 100-year company that continues to thrive into the future.
To conclude, please take extra precautions to remain healthy, prioritize your physical and mental health, and bring confidence and a readiness to succeed each day. I wish all our Sojitz Group members around the world and the families who support them good health in the new year.