COO Message

By honing our front-line capability and ability
to make timely corrections through
“cultivating human power and sensitivity,”
we will carve out the future of ITOCHU.

Keita Ishii
President & Chief Operating Officer; CSO

Cultivating Human Power and Sensitivity

This phrase was one of the key messages I shared with new employees at welcome ceremony in April 2025. Each year, I reflect deeply on what I should convey in my own words to the next generation of “to-be merchants” who will help carve out the future of ITOCHU. Looking back on my career of over 40 years, from delivering chemicals and negotiating prices with overseas suppliers to managing organizations, I am reminded that regardless of position or geography, the foundation of all business is “human power”: integrity and character. Looking back at my younger days, there are many times when I wish I had done more, and with this in mind, I have reflected on myself and believe that this is something that we should acquire above all else as a merchant.

I must also mention another important thing: “sensitivity.” As the saying goes, “Merchants need to be like water,” in business, it is crucial to read the tides and winds of society and be adaptable to ever-changing customer needs. Refining one’s sensitivity enables one to discern the true nature of customer demands. Sensitivity is an indispensable quality for any merchant, and it cannot be acquired solely by sitting at a desk or through AI; it must be honed in real-world front-line settings. For example, when visiting a customer, if we observe the office before beginning business negotiations, we can often get a sense of the atmosphere at the reception desk and the behavior of the other visitors. This doesn’t happen as much anymore, but in the past, we would sometimes meet customers at their desks, where a single photograph might reveal much about a person’s character, such as their family or hobbies. In other words, there is an abundance of information at the site, and the information that can be obtained from there is limitless. The basis of being a merchant is to be highly sensitive to the information obtained from the site, to digest it, and then to wholeheartedly engage with customers and the world of business.

Actions rooted in customer perspectives, derived from refined sensitivity, combined with the humanity that attracts others, together form the foundation for building trust with customers. Building a chain of trust such as “The new person in charge at ITOCHU is punctual, seems honest, and considerate,” “They understand our company’s situation well, and come up with good proposals in a timely manner,” and “I’ll consult with ITOCHU again next time” leads to personal connections and business opportunities. This philosophy serves as the foundation for not only new employees but also ITOCHU’s Companywide commitment to a market-oriented perspective.

Demonstrating the Ability to Make Timely Corrections

In fact, in my message to all employees, I talked about another skill that needs to be honed in addition to human power and sensitivity: the ability to make timely corrections. Recently, with the tariff policies implemented by the Trump administration in the United States and rising geopolitical risks around the world, unpredictable changes in the external environment are flooding the forefront of business one after another, and we are living in an era where the ability to make timely corrections is truly critical, and simply relying on an extension of previous thinking is no longer sufficient. The ability to quickly perceive changes in circumstances and move forward by flexibly adjusting plans and strategies is essential. There are different types of information; relatively open information that can be obtained from television, the internet, or SNS, and closed information accessible only through trusted personal networks. We live in an era where open information can be instantly disseminated through digital technology and is accessible to everyone. Meanwhile, live information obtained from closed front-line networks derived from information networks based on relationships of trust with customers is essential for proactive crisis response. In other words, for demonstrating the ability to make timely corrections, which makes the difference in crucial situations.

FYE 2025 was not an easy fiscal year, with falling resource prices and weaker-than-expected operational performance at some projects. Despite the situation, we achieved 10% growth that was in line with our initial plan and achieved record-high profits. This success was driven by the Group’s collective demonstration of the ability to make timely corrections, rooted in the front line. Many Group companies, deeply embedded in their respective fields, leveraged high-quality information networks to respond proactively, resulting in record-high Group company profits, with over 90% of companies reporting profits, and approximately 30% achieving record-high profits. We believe this is a case that truly demonstrates the high level of the ability to make timely corrections of our Group.

Flexibility in responding to external changes is equally necessary for ESG and decarbonization initiatives. Recently, we are seeing a reversal in global policies and a change in the timeline for the transition to a decarbonized society. However, the transition toward a sustainable society is an irreversible trend in the long term, and when we look closely, we can see that the impact on individual businesses varies. It is essential that various ESG-related initiatives be adjusted to reflect reality and, move forward based on actual consumer needs. With the advancement of AI, there is an increase in global demand for electricity, and even in the current situation, there are areas where demand is growing, such as renewable energy and storage batteries that stabilize power supplies. Taking advantage of our sensitivity and flexible ability to make timely corrections we have honed in the field, we will continue to pursue sustainable initiatives in ESG and the decarbonization business with a grounded and realistic perspective. （→ Initiatives for Steadily Promoting Sustainability）

Creating New Businesses by Breaking Down Product Silos

Since the welcome ceremony in April 2025, I have also assumed the additional role of Chief Strategy Officer (CSO). Until April 2025, my responsibility was President & Chief Operating Officer (COO), which is the head of the front line. I now also lead the planning and strategic functions as CSO. To accommodate the additional responsibilities, my workplace has also been moved to a location closer to the site. A lot of information flows constantly on the floor every day, where many departments, including the Corporate Planning & Administration Division are located. Until last fiscal year, as COO, I was in a position to make decisions together with the Chairman & CEO on the plans and strategies drafted by the CSO and Corporate Planning & Administration Division. Now, I am able to feel the tone and passion of the Corporate Planning & Administration Division members’ discussions firsthand, and we work together to consider measures and strategies to respond to issues that arise every day. This new perspective has offered many insights. For example, the Corporate Planning & Administration Division gathers a vast amount of information from all over the world. However, due to the nature of the Corporate Planning & Administration Division, there is an inherent tendency for it to become distant from the front line, and as a result, I was concerned that it would become a tally-up business that only pursues figures on business performance trends. I have many opportunities to visit front lines around the world, and it is my responsibility to communicate the changes in the business environment I have noticed there, and to further strengthen the sense of unity between business sites and management.

Another key mission as CSO is to break down product silos. The Corporate Planning & Administration Division is staffed by talented personnel from all the Division Companies, but there is a tendency for their thinking to remain siloed according to their respective origins. However, new value expected by the market cannot be created through such ways of thinking. Today, as seen in partnerships between major telecom carriers and financial institutions, the trend is to combine strengths across industries to create entirely new value and markets. I believe it is precisely the role of a general trading company to lead and pioneer such endeavors. In FYE 2025, we proactively advanced projects such as WECARS Co., Ltd. and PASCO Corporation, which involved combining value across traditional business domains. As we set a flag of ¥1 trillion in growth investments this fiscal year, we will maximize our comprehensive capabilities and downstream perspective to realize growth investments on a large scale. Utilizing my network as the Company’s representative and my oversight position as President, I see it as another key responsibility to facilitate cross-company collaboration and create new businesses beyond existing Division Companies boundaries.（→ Creating and Expanding Businesses by Utilizing FamilyMart’s Business Platform）

We have been steadily growing earnings and are in a position to aim for our second consecutive year of record-high profits in FYE 2026. However, I would like to mention a few concerns I have from my standpoint, as well as some challenges I believe we are facing. These are “strengthening our overseas expansion” and “utilizing digital technology and AI.” In FYE 2025, I visited many Group companies and overseas offices. For example, in Thailand, where I previously served as head of the office, I sensed a decline in Japan’s presence due to the weaker yen and other factors. Furthermore, changes in communication post-COVID-19 have increased direct interaction between headquarters and overseas clients, sometimes weakening cross-functional thinking and networks within local offices. Although we have a robust business foundation, particularly in Japan and the non-resource areas, there is still significant potential for expansion overseas, and capturing business opportunities abroad remains one of our key challenges. In many countries, especially in the Global South, personal relationships are critical to business success. By engaging directly and building a relationship of trust, unexpected business opportunities often open up, and by taking the initiative as President to visit key figures and top executives in various countries who are difficult to reach through employees on front line, I want to open new gateways for overseas business expansion.

Digital utilization is another challenge we face. AI is evolving rapidly and fundamentally transforming our business and society, as everyone is aware. However, compared to countries such as India and the United States, there is a difference in awareness regarding the use of AI, and I feel a great sense of crisis. My message is clear, “First, get in touch with cutting-edge technology and experience it for yourself.” I see digitalization not as a cost, but as an investment for the future. By learning from cutting-edge digital and AI use cases overseas and quickly bringing them to Japan, we have unlimited potential to create higher value-added business for our customers and consumers. Digital utilization also makes it possible to connect businesses that were previously considered separate. We will continue to refine our market-oriented sensitivity, maintain a high level of awareness, and promote digital and AI utilization with agility and an open mindset.（→ Digital Strategy for the Sustainable Enhancement of Corporate Value）

ITOCHU Group’s Underlying Strength

Breaking down product silos, overseas expansion, and digital utilization represent the areas where we strive for the next stage of advance, or in other words our potential. There is another important growth potential that I would like to share with our stakeholders. It is our Group companies that I referred to as “treasures” in my message last year.

In December 2024, we held our first “Prestige Lunch,” inviting outstanding employees from major Group companies. The purpose of the event was to convey gratitude to employees who have achieved outstanding results over multiple years at Group companies that support the ITOCHU Group. I wasn’t sure what kind of atmosphere would be created with people from various Group companies of different industries and scales gathering together, but the conversation flowed so naturally that it was hard to believe it was our first-time meeting. Subsequently, we organized visits to our founding sites, and new connections continue to be formed among the participants. It was a valuable opportunity to keenly feel the strength of the human powers that define our entire Group. What also impressed me deeply was how our management philosophies, such as the “Earn, Cut, Prevent” principles and commitment-based management, have become remarkably ingrained among front-line employees. These concepts, repeatedly communicated across the organization, are now naturally included in conversations, and fully understood and practiced by employees. Over time, the philosophies have permeated the front lines and taken root as part of our Group’s Management Philosophy. I believe that this is precisely where ITOCHU’s strength lies.

Four years have passed since I became President & COO, and through financial results briefings and small meetings, I have built up opportunities for dialogue with market participants. To have our potential for growth understood better, I will continue this fiscal year to take the lead at the front lines to maximize our Group’s underlying strength and further enhance corporate value.