New Year’s Remarks from the President & COO

January 4, 2023

On 4 January, Keita Ishii, President & COO of ITOCHU Corporation delivered his New Year’s message online to employees.

Happy new year

In the past few years, we have not had a New Year’s holiday without restrictions due to the COVID-19 pandemic and other factors, but due to the progress in vaccination and the endemic COVID-19 environment in various regions, I believe that your year-end and New Year’s vacation with your family and friends was relaxing without reservation or you enjoyed your vacation in a meaningful way, so that you welcome today with a fully refreshed and renewed mindset. As we start the new year, I would like to say a few words to all members of the ITOCHU Group in Japan and around the world.

As you all know, last year was turbulent. In particular, the Russian invasion of Ukraine on February 24, which shook the world, disrupted the global economy which was recovering from COVID-19, and it continues to have a significant negative impact on the world order. The sudden disruption of supply chains caused by the invasion has led to extraordinary price increases not only in energy, but also in fertilizers, grains, lumber and other commodities, and global inflation is rapidly accelerating. In the United States, the gradual increase in interest rates aimed at curbing inflation has affected the financial and foreign exchange markets, resulting in fears of a continued economic slowdown. Meanwhile, even in China, which had been the driving force of the global economy until recently, economic activity has stagnated due to the sluggish real estate market and new waves of COVID-19 infections caused by the easing of the zero-COVID policy, and the economies of the world’s two largest countries are slowing down.
In addition, rapid changes in the energy supply balance have set back the progress toward carbon neutrality, which was increasing globally.

On the political front, it is very difficult to predict the future because of China’s Xi Jinping beginning a third term of office, the US mid-term elections resulting in a divided Congress, and the destabilization of relationships between Middle Eastern countries. In addition, Russia’s actions may create division and distrust among nations, representing their own security crises, and further accelerate the rethinking of globalization, nationalism and the closing of their own economic spheres. In the area of security, we need to pay closer attention than ever before to the environment surrounding us, as the environment highlights the importance of not only energy and food, but also defense issues.  Although the path we are on is more chaotic and uncertain than ever, as just described, we must all make a concerted effort to continue growing as a company in this, the final year of our Brand-new Deal 2023 Medium-term Management Plan, no matter what the environment is.

Now, I would like to share two things with you today.  The first is that we should reaffirm and go back to the basics, aiming to build an earnings base of 800 billion yen even in this difficult climate. Do you know that since the end of last year there has been a series of events for experiencing ITOCHU and looking back on its history?
First, an extravagant memorial service for the Chubei Itoh I and Chubei Itoh II was held at the end of November last year, attended by Chairman and CEO Okafuji. On December 13, ITOCHU: Zaibatsu-kei O Koeta Saikyo Shonin (ITOCHU: The Strongest Merchant Outside the Zaibatsu Group), a compilation of the history that created ITOCHU that had been serialized by Diamond Inc., was published. Then on December 21, The Nikkei carried a full-page advertisement titled ITOCHU Wa Kokokara Hajimatta (ITOCHU began here), which stated that 150 years ago in 1872, Benichu, the drapery shop that later became ITOCHU Corporation and Marubeni Corporation, opened a new store in Honmachi, Osaka.
I felt that this event at the end of last year reminded us to look back on our predecessors’ business is a message from the Chubei Itoh I, and I am bracing my nerves. I feel that this message tells us that now is the time to remember the sampo yoshi business principle of the Omi merchants, the origin of ITOCHU, and the I am One with Infinite Missions conduct guidelines to continue to make progress, remember the unyielding spirit of ITOCHU, which has overcome many trials and tribulations, and work hard at our trade by going back to our original intent. ITOCHU’s profits are the accumulation of the business of each merchant.
In other words, I would like you to once again return to the basics, the fundamentals of business.
Second, to steadily increase the fundamental earning power that will lead to an earnings base of 800 billion yen, I would like everyone to once again reevaluate the goals for the future set by each organization, the measures to be taken, and the progress being made, and for everyone to reaffirm their own mission and significance in the achievement of these goals.
I watched a FIFA World Cup qualification match between the Japanese national team and Spain on TV. I believe that Mitoma chasing the ball down to the last millimeter of the goal line, Tanaka believing in his pass and scoring the goal, and the success of the Samurai Blue team last year was the result of all the players doing what they had to do for the team, not cutting corners, and sticking to the basics. I think that this also leads to the achievement of our organization’s goals, with each of us acting with an understanding of our mission and the significance of the things that we should do, without cutting corners.

The possibility of ITOCHU’s scale of earnings exceeding 800 billion yen for the second consecutive year has come into sight, but this is a result of including the positive impact of the weaker yen and resource premiums, and we have not yet reached our true potential. It is important to go back to basics, rethink what customers and society are looking for, and confirm our mission and the significance of what we must do now. The seeds of business are not found in the office, but on the front lines. If we leave the front lines, we will be left behind by other companies in a matter of seconds. The front lines we are engaged with are evolving daily as transactions diversify and diverge, and we collaborate with different industries in succession. On the front lines, I feel that there are more and more business opportunities for cross-industry collaboration that cannot be handled with a vertically-divided mindset. There is a limit to how far we can go when we always think in the same world, from the same direction, with only the same colleagues. We should always take on new challenges, never lagging behind the evolution of the world, and each one of us should take on the role of a leader with the determination to lead our own businesses to fully demonstrate our fundamental strengths this year.

This year’s Chinese zodiac sign is the rabbit. The year of the rabbit is popularly known as a symbol of leaping forward and improvement because of the jumping figure of the rabbit.  Once again, the business environment surrounding us continues to be uncertain this year, but without overconfidence or complacency, I would like to make it a year that will lead to ITOCHU continuing to leap forward and improve by building an earnings platform that is resilient to economic fluctuations toward the stage of it having 800 billion yen in revenue. I would like to conclude my new year’s message by wishing ITOCHU Group employees across the world and their families good health and happiness in the coming year.