2015 New Year Message from the President and CEO

Jan. 14. 2015
Marubeni Corporation

The following is a message from President and CEO Fumiya Kokubu delivered at 9:00 am on January 5, 2015, at the Tokyo Head Office.


A Happy New Year to you all.

2015 is the year of “乙未 (kinoto hitsuji)” or the “Wood Goat Year” in the Chinese zodiac. The character “乙 (kinoto)” indicates the state of buds which shoot out from the ground and cannot grow directly straight towards the sky, but rather grow upwards by twisting and turning. Just as this Chinese character implies, I believe that 2015 will be a tough year in which we will meet strong resistance, and a year which will be difficult to foresee. Under such a situation, I hope to make 2015 a year in which the Marubeni Group can make solid advancements towards growth in line with the 2015 Chinese zodiac.

As we celebrate the start of 2015, I would like to make a few remarks directed at all members of the Marubeni Group around the world.

1. Economic outlook for 2015
First of all, in Japan, 2015 marks a quarter-century milestone, for exactly 25 years will have passed since the nosedive of stock prices in 1990 that led to the burst of the economic bubble. The Third Abe Cabinet was inaugurated last December, and much attention is being drawn to the question of whether Abenomics, which has been advocated so far, can show great progress in this milestone year. Most of all, many are closely watching to see whether the government can press hard on a structural reform that might bring about serious challenges and centers around the “third arrow” growth strategy and the relaxation of regulations in the agricultural, health care, and employment sectors.

On the other hand, the tide has changed for the global economy and a new phase has started. Let me briefly give you an overall outlook. The United States will be the sole winner and will enjoy a strong economy. Meanwhile, further monetary relaxation can be assumed for the EU due to the economic stagnation. Japan will have no other choice but to continue with monetary relaxation for the time being. The economy will slow down in emerging nations; an aging population and declining birth rates are expected to hinder the economy in China; and, tumbling resource prices are to greatly impact Russia and Brazil.

Based on such forecasts, our capability to adapt to changes will be put to the test.


2. Mid-term management plan “Global Challenge 2015”
2015 is the final year of Global Challenge 2015; and, therefore, a critical one.
Even though we are in the midst of a changing business environment, the things we need to tackle in Global Challenge 2015 remain the same. That is, we still need to grow, and we still need to face challenges. In order to realize growth, I believe we must further promote “improvements of assets” in addition to making “new investments.”

There are two things to keep in mind. First, we must put invested projects on the growth track. M&As do not end with just buying assets. Efforts after the purchase are exceedingly more influential. I want you to take all possible measures to thoroughly analyze projects that are not proceeding as planned and figure out the causes so that we can come as close to realizing the plans as possible. Also, for projects which are proceeding as planned, make strategic movements for further growth by thoroughly thinking of ways to improve them.

The second point in improvements of assets is to change existing businesses for the better. In other words, improve the work you do daily even if only slightly. When undertaking daily tasks, possess the mindset “better today than yesterday” and make changes to your work so that they become a routine.
If each one of you can make such continuous efforts, I am confident we will see a dramatic increase in our profitability.


3. Things to keep in mind in the New Year
Next, I would like to talk about things I’d like you to keep in mind and things I’d like for you to share to create a common vision in the New Year.

(1) Sense of ownership and genba-ryoku (field operational effectiveness)
First, I would like you to embrace a sense of ownership.
A sense of ownership is necessary in order for you to accomplish anything. That is a determination to “do your work” and an awareness that “work is something that you must do”. The origin of genba-ryoku, which I believe is most vital to Marubeni, comes from this sense of ownership. Solutions to problems are generated because all of you at the forefront possess a will and come face to face with the market and customers. Because now we are in a time when changes take place really fast, it is crucial that all of you, in the field, think and act with a sense of ownership.

(2) Trusting relationship with management
Second is on the relationship between you and management.
I have always believed that a trusting relationship between employees and management is established, not in a one-way fashion, but by having both sides commit to their duties. This means that management will promise to create an ideal working place for employees, and employees will demonstrate maximum performance in that environment. Both will be responsible for their results and commitments. I believe that some pressure is essential in a good relationship.

(3) Compliance
Last is compliance. Let me talk to you about the Tarahan project in Indonesia. Starting on March 26, 2014, Marubeni was suspended for nine months from its eligibility for participation in the process of procurement for grant aid and ODA loan projects hosted by JICA and the Ministry of Foreign Affairs of Japan. This suspension term ended on December 25, 2014.
There are many things we lost in this incident. By using the Tarahan project as a lesson, I believe that we must thoroughly meet compliance requirements and work to regain the trust of our stakeholders, including our customers.


4. Closing Remarks
I am going to repeat what I already mentioned. 2015 is the final year of Global Challenge 2015; and, therefore, a critical one. I hope to steadily implement what I must, together with all of you, in order to achieve the goals set in Global Challenge 2015. I perceive change as an opportunity and hope to boldly face challenges.

On this piece of Japanese calligraphy that has been brought up on this stage, you can see the Chinese character “挑 (idomu)”, taken from “Relish great challenge”. It is one of the spirit qualities that form the “Marubeni Spirit”. This was handwritten by the famous calligrapher Iwai Shouin, who has been an advisor to Marubeni’s calligraphy club for many years and who is a good friend of mine. Just like this dynamic calligraphy, let us all not forget the spirit that drives us to take on challenges and aim for higher grounds by working together as one.

Lastly, I wish for all of you to take care of your health and to gain success in many areas. More than anything, let us be cheerful and enjoy work. Great ideas and good performance do not come from a smileless and gloomy workplace. The key phrase is “be cheerful and enjoy”. Let’s create a workplace filled with smiles and vigor, and with a healthy amount of pressure.

I would like to wish you all and your families another healthy and successful year. Thank you.

Fumiya Kokubu President and CEO, Member of the Board