Jan. 04, 2016
New Year’s Message for 2016
Happy New Year to you all! As we start 2016, I would like to extend everyone in the Sumitomo Corporation Group around the world best wishes for the New Year from the Tokyo Head Office.
This year will be the second year of our new three-year medium-term management plan BBBO2017. To illustrate a course toward achieving What We Aim to Be, we will need to pick up the pace in advancing our growth strategy and managerial reform, the two-pronged approach presented in our medium-term management plan.
The external environment will likely remain uncertain this year as well
Starting with the financial markets, the liberal flow of money supplied by central banks thus far based on a zero interest rate policy has begun to ebb in the wake of the US’ interest rate hike. The slump in crude oil prices has countries across the Middle East running current account deficits, while at the same time China has begun depleting its foreign currency reserves.
The flow of the three types of money that have been running flush around the world since 2009 – excess money stemming from quantitative easing, oil money and China money – is on the verge of great changes as it seeks out a new order.
The real economy continues to undergo correction. China’s excess steel capacity and overproduction, which by itself surpasses Japan’s entire production volume, has become an issue. The US shale revolution has begun undermining the order sustained by OPEC in the crude oil market for more than half a century, and excess supply and inventory continue to constrain price rises for nickel, aluminum and other mineral resources.
We are heading into a milestone year on the political front, with Japan holding Upper House elections in July and the US a presidential election in November. The EU will require some very delicate steering, as they take a large influx of refugees. Some emerging countries heretofore enjoying growth have been hit hard by the surge in the dollar’s value and the drop in resource prices, making their political as well as economic courses unpredictable.
In view of these developments around the world, Sumitomo Corporation Global Research has identified this year as one that will see “crumbling world order & oversupply economy.”
In such an external environment, we will further accelerate our growth strategy. In order for our Group to succeed amidst tough global competition, and for us to grow stably and continuously, we must realize both the bolstering of our earning power and enhancement of our financial structure. We must continue replacing our assets as we seek to make our balance sheet more solid.
At the same time, “crumbling world order” is not entirely negative. On the positive side, it means the birth of a new order, which we must face resolutely.
Signs of this new order include the formation of new extensive economic zones such as the AEC and TPP and the birth of new markets as Iran, Cuba and other countries rejoin the international community. In addition, IoT, which has been garnering attention as a change in industrial structure, as well as the environmental targets agreed upon at COP21, will help broaden our business opportunities. We must actively adapt to these moves toward the formation of a new order from a medium- to long-term perspective.
The keys to making progress in these efforts will be our integrated corporate strength and cross-organizational collaboration. With respect to cross-organizational collaboration, a variety of efforts have gotten underway since last year.
Transcending organizational boundaries and breaking down stereotypes will generate new business, and tying organizations together to combine their differing functions will create new value in a way unique to the Sumitomo Corporation Group.
In implementing the other prong of BBBO2017, namely managerial reform, we implemented a number of measures last year, and I would like to work with you this year to make further progress in two areas.
The first is that of ensuring that individuals are more firmly committed than ever to take on active roles. The second is that of incorporating cross-organizational and multi-faceted discussions into better decision-making. I am convinced that fully implementing these measures will prove helpful in strengthening our earning power.
If each and every one of our Group’s 75,000 members, exhibiting enthusiasm, hunger and persistence, were to respect each other’s knowledge and experience, disseminate information to each other and engage in discussions about the changes that are likely to occur in the external environment, I have no doubt that we could successfully overcome these changes.
Our goal is to realize BBBO2017 step by step and reach What We Aim to Be.
What we need to do has not changed: we must build a firm foundation on which we can steadily and continually grow for the next 50 or 100 years.
Let’s come together to form a 75,000-strong scrum spanning the world and push forward, and then forward again to achieve What We Aim to Be.
In closing, let me express my hopes that this year will be a very prosperous one for you and your families. Thank you.
Corporate Communications Department,