Finance, Logistics & IT Business Division Strategies and Initiatives
Industry Environment and Fiscal 2010 Results
Business Scale Expansion and Overseas Development Initiatives
The global economy moved on from the worst of the economic slump that lingered after fiscal 2008, and business performance was firm.
In the finance sector, along with a certain level of earnings secured in line with market recovery, the logistics field saw strong baseline performance as shipping rates for containers rose in step with a worldwide rebound in freight movement. Similarly, a rise in maritime insurance income in the insurance field, coupled with efforts by subsidiaries to purchase commercial rights from insurance agencies in Japan, contributed heavily to division earnings.
Turning to the information and communications field, in the ICT outsourcing sector, where the division is mainly engaged in data communication network operations, we successfully covered the impact of pressure from existing customers to lower service prices and contract terminations through new projects and greater operational efficiency. Performance in system solutions was brisk, with sales and earnings up from the previous fiscal year. This outcome reflected a modest recovery in IT investment sentiment across the corporate sector, as well as lower adoption costs due to a stronger yen. The same was true for PC and mobile terminal
sales and the BPO sector, where lower expenses and other factors led to earnings for the division.
In contrast, the overall operating environment remained challenging in the overseas telecom and information sector, where the division’s main thrust is telecom and information system EPC projects. In addition to smaller projects, tough conditions stemmed from the rise of new players in this sector, particularly from China.
While business scale, on the one hand, grew substantially in fiscal 2010 from M&A activity and subsidiary mergers, asset replacement was also carried out to lay the groundwork for earnings expansion in fiscal 2011 and beyond. In parallel, the division pursued aggressive measures to develop markets in the growth markets of China and ASEAN countries, including through establishment of new companies and employee deployments.
All told, segment gross trading profit in fiscal 2010 was ¥42.3 billion and segment net income was ¥3.2 billion.
Initiatives in Fiscal 2011
Addressing Growth Markets and Stabilizing Earnings in New Businesses
In the finance field, we will continue to closely monitor market conditions and expand earnings from our domestic and overseas lease and fund businesses. In tandem, we will move proactively to grow asset management operations launched in fiscal 2010. In logistics, we will continue to bolster business in China and the ASEAN region, with efforts centered on Shanghai Jiaoyun Rihong International Logistics Co., Ltd. and Beijing Wai-Hong International Logistics Co., Ltd. In the information and communications field, meanwhile, our focus will be on lifting the earnings power of existing operating companies, especially Marubeni Access Solutions Inc., formed from the merger of Global Access Ltd. and VECTANT Ltd., and Marubeni Information Systems Co., Ltd. At the same time, we will enhance group synergies with company i2ts, inc., Marubeni OKI Network Solutions Inc, Fusion Communications Corporation, and new operating companies to put our cloud computing services business and other new operations on track.
In addition, we will continue to push ahead in business process outsourcing with strengthening our call center operations, plus the development of new services in the pharmaceutical and health care fields. Elsewhere, we will develop new corporate services utilizing smartphones, which are set to come into even wider use. In the overseas telecom and information sector, we will reorganize and integrate the IT Network Business and IT Solutions Business departments from fiscal 2011 to take better advantage of synergies within the division. We will also continue to increase contracts in focus markets such as South Africa, particularly for security system projects.
As we remain committed to nurturing growth in new businesses in Japan in fiscal 2011, we will pursue more robust initiatives in the rapidly growing China and ASEAN markets.
