President’s New Year Greeting 2018
Jan. 05. 2018
The New Year greeting delivered by Fumiya Kokubu, President & CEO at the Marubeni Tokyo Head Office on January 4 is posted below.
I would first like to wish everyone a happy New Year. Together, we are ringing in the new year with a fresh mindset, and it is with that mindset that we are beginning our first workday of 2018.
I hope to make this year the first year in which Marubeni becomes a company that surpasses the conventional boundaries of the Sōgō Shōsha.
2. The business environment surrounding the global economy and Marubeni
Let’s start with an overview of the economic and business environment. In terms of the global economy, last year was for the most part a positive and bright year for many countries around the world. Developed countries in general saw favorable progress, with the United States, Europe, Japan, and other prominent countries all maintaining strong economies. Emerging economy countries like China grew, and resource-rich countries have begun to recover.
At the same time, a considerable tide of change is taking shape, driven by three powerful “currents”.
The first of these currents is a shift in the global balance of power. In recent years, we have seen an expansion in the Chinese model of globalism as China’s presence on the world stage has rapidly grown. As the United States pursues a policy of “America First,” China is promoting its “One Belt, One Road” initiative and is attempting to gain the upper hand by using its own domestic market as a large-scale testing ground for next-generation technologies such as electric and self-driving vehicles, not to mention IoT and AI. Changes to this U.S.-China centered dynamic will have numerous effects on the course of world events, and consequently on our business.
The second current is the normalization of the financial environment. The tide is clearly turning for ultra-monetary easing as financial normalization led by the United States progresses. This year, the trend towards normalization is expected to progress even further, with the continuation of last year’s interest rate hikes in the United States in addition to the Federal Reserve Board (FRB) beginning to shrink its assets. Furthermore, regulations on financial institutions are becoming increasingly stringent, as exemplified by the Basel III framework. Given these developments, rises in the cost of procuring funds and an increasingly tight financial climate are both possibilities. Sooner or later, the era of easily accessible cheap capital will come to an end. Therefore, it is paramount that we create high added-value business models that can survive in more difficult financial circumstances.
The third current involves changes to the industrial structure and the competitive environment. “Digital Transformation” is not only sweeping over developed countries but emerging economies and the rest of the world as well, leaving major changes to society and industry in its wake. The nature of those changes is disruptive and creative destruction. I am sure that you are all well aware of the accelerated reform in the traditional industrial structure that is occurring across all fields.
We can therefore conclude that this new societal transformation with which we are confronted will be one in which “opportunities” arrive hand-in-hand with “threats”. For Marubeni, which has invested no small amount of management resources in an array of industries around the globe, these mega-trends will mean great opportunities － opportunities to create new business models and to transform businesses into enterprises that add explosive value. On the other hand, if we are unable to take advantage of these opportunities, they will quickly slip through our fingers. Is it possible for us to pioneer a new future for our company if we are limited to working within the confines of the current Sōgō Shōsha structure? This is a question that each of us must take seriously and answer earnestly. My desire to create a company that surpasses the current boundaries of the Sōgō Shōsha is rooted in this view of the coming era.
3. The Marubeni Group as a solutions provider
This year marks the 160th anniversary of our founding in 1858. Throughout our long history, we have adapted to the ever-changing times and prevailed through many crises. We have built the Marubeni of today precisely because we have reinvented our company time and time again in order to continue to provide solutions to, and meet the ever-changing needs of society, industry, and our clients.
In this tumultuous era of change, can we look back on the work we have done and say that we are providing － truly providing － the best solutions for our clients and society?
In this increasingly digital age, in which the social infrastructure; the industrial structure; and even individual modes of behavior are changing, what is important is how well we are truly able to provide solutions to our clients and to society as a whole. We will no longer be able to address problems and respond with solutions while continuing to take only a single-minded approach. In other words, we must take the traditional functions and business models of the Marubeni Group and raise them to the next level, and the levels beyond that, in order to meet client and societal needs. We must effectively utilize the assets, business models, and networks of the current Marubeni Group to their full potential. But where should we start? The concise answer to that question is that we should start by “knowing the Marubeni Group.”
Despite belonging to the same group of companies, there are many of us who have little knowledge of projects or businesses beyond the ones in which we are personally involved. This year, however, I want each of you to also focus your attention on other units, other business divisions, and other groups. I would like you to develop an interest in the full range of businesses in the Marubeni Group, and to pick up and look at the products we offer. In case you can’t actually visit these other organizations, information on our clients, assets, business models, networks, management frameworks, systems and so forth is made readily available for your viewing, so please take advantage of that. Furthermore, please think about whether or not you can find something innovative to do in conjunction with the job you’re doing now. It doesn’t matter how small you start. By looking for and thinking about combinations or hybrids that transcend conventional business and product lines, you will find that your way of thinking changes. It is important to plant the seeds of new business and to produce chemistry between differing businesses. We will provide you with the infrastructure and systems necessary to do so as we move forward, proactively investing in highly ambitious and strategic plans to carve out the future of the Marubeni Group.
Through efforts such as these, I hope to make this year the beginning of our rebirth as a company; a year in which we overcome the binds of conventional boundaries that focus only on existing product lineups. Moreover, I want us to continue to discuss and debate concepts and ideals for the Marubeni Group for the next 100 years to come, and I want to share that with all of you.
Lastly, I want to continue with “Think & Act MARUBENI” in 2018.
So I ask that you sharpen your senses and use them to physically experience issues facing this company and its clients in the field. Then, I ask that you set your mind towards building and providing solutions to these problems, for that will be how we create new business and carve out the future of the Marubeni Group.
The calligraphy piece that I have shared here on this stage, is one that I have chosen. It is a piece that was made by calligrapher Shoin Iwai who serves as an advisor to the Marubeni calligraphy club. I chose this character, koeru (“surpass”), for this year because it represents our resolution to make this new year the one in which we are reborn as a company. Together, let us “surpass” our preconceived notions and ideas so that we may transform ourselves and create our ideal future.
Please take good care of yourselves this year. I wish all of you and your families a healthy and prosperous new year in 2018. Thank you.