History of Sumitomo Corporation
Origins of Sumitomo Corporation
Sumitomo Corporation's history dates back to the 17th century, when Masatomo Sumitomo opened a book and medicine shop in Kyoto. Masatomo wrote and left for posterity a document entitled "Monjuin Shiigaki (Founder's Precepts)," describing how a merchant should conduct business. Forming the basis of Sumitomo's Business Philosophy of pursuing integrity and sound management rather than easy gains, these teachings have been passed down and adhered to across the Sumitomo Group for 400 years, right up until today.
After Masatomo's time, the Sumitomo business grew and flourished in the copper mining and refining industry and other related sectors. Embracing the credos of "Benefit for self and others, private and public interests are one and the same" and "Grand Design," which, respectively, emphasize the importance of social contribution and an enterprising spirit, the Sumitomo Group has gone on to become one of Japan's leading corporate groups, with interests in finance, insurance, steel, real estate and others. Sumitomo Corporation is a major player within the group.
Launch of Sumitomo Corporation and advance into trading business
Sumitomo Corporation was originally founded as The Osaka North Harbour Company Limited in December 1919. The company engaged in real estate management, conducting land reclamation in the Hokko (North Port of Osaka) area and the development of the surrounding areas, along with other activities. In 1944, the company merged with The Sumitomo Building Co., Ltd. and was renamed Sumitomo Real Estate Building Co., Ltd. In November 1945, the company was renamed Nippon Engineering Co., Ltd. and advanced into the trading business, handling products from Japan's major manufacturers as well as products manufactured by its own group companies. From then on, the company focused on trade, looking to expand both the range of products it traded and the industrial segments it operated within. In 1949, the company listed its shares for public trading on the Tokyo, Osaka and Nagoya stock exchanges.
Early period - Solidification of the management foundation (1950s)
The biggest challenge during the early period was the need to solidify the company's management foundation. Shunya Toji, who was the president of Nippon Engineering at the time and later became the first president of Sumitomo Corporation, encouraged his "amateur" employees, who were not well versed in the trading business, by telling them that "enthusiastic amateurs outperform professionals" every time, and strove to establish sound management through strict credit control and other means. The company also steadily expanded its presence abroad, posting an employee to Bombay (now Mumbai) for the first time in 1950 and establishing a U.S. subsidiary in New York in 1952. The company's name was changed to Sumitomo Shoji Kaisha, Ltd. in 1952, and its shares were listed on the Fukuoka Stock Exchange in 1955.
Reorganization for expansion (1960s)
The company set itself the goal of boosting its sales to become the third-largest trading company under the slogan of "Big Three," at the same time looking to increase its sales per capita. In 1962, the Osaka and Tokyo sales offices were consolidated and a product division structure was adopted to establish nine product divisions: Iron & Steel, Nonferrous Metals, Electric, Machinery, Agriculture & Fishery, Chemicals, Textiles, General Products & Fuel and Real Estate. In 1967, a project team was formed to promote large-scale projects, resource development and cultivation of new industries from a cross-divisional, medium- to long-term perspective.
Establishment of management foundation as an integrated trading company (1970s)
In 1970, a new Sumitomo Shoji Building was completed to house the Tokyo Head Office. This marked the establishment of a dual head office structure, with one in Tokyo and the other in Osaka. In the same year, the company merged with Sogo Boeki Co., Ltd. In 1977, the company set the goal of becoming the No. 1 company in terms of overall evaluation against financial and business criteria, as well as winning public support, under the slogan of "Big Three & The Best." In the mid 1970s, the number of overseas offices exceeded 100. In 1978, the English name of the company was changed from Sumitomo Shoji Kaisha, Ltd. to Sumitomo Corporation. Then, in 1979, a sales division system was introduced to establish four sales divisions - Iron & Steel; Machinery & Electric; Nonferrous Metals, Chemical & Fuel; and Consumer Products - and the empowerment of each was promoted. To celebrate the 60th anniversary of the company's founding, measures such as the strengthening of overseas business activities and the cultivation of new areas, among others, were vigorously promoted under the new slogan of "Open Eyes on All."
Vision of Integrated Business Enterprise (1980s)
In 1988, the company set out its vision of becoming an Integrated Business Enterprise, aimed at promoting business activities in addition to the existing trading activities in order to expand its earnings base by having two major revenue sources. A new slogan, "Seeing Tomorrow, Innovating Today," was adopted. Consolidated financial results were published in the fiscal 1989 financial report.
Reinforcement of global consolidated management - Establishment of Corporate Mission Statement (1990s)
In 1991, the medium-term management plan "Strategy 95" was formulated with the aim of realizing the Integrated Business Enterprise vision. In 1994, the development of a new earnings structure designed to respond to globalization was promoted under the slogan "Global Mind, Global Reach." Based on lessons learnt from an unlawful copper trading episode that came to light in 1996, a strict internal control system was put in place to prevent the recurrence of similar acts. In 1998, the Corporate Mission Statement was established, and the risk-adjusted return ratio was introduced as a new management indicator.
Implementation of Reform Package - Heading for a new stage of growth (2000s)
After the Reform Package was adopted in 1999, the company focused on strengthening its financial standing through the prioritization of businesses and improvement of profitability, as well as on reinforcing its business foundation by adding and enhancing the quality of prime assets, under a series of two-year medium-term management plans (Step Up Plan, AA Plan, AG Plan, GG Plan, "FOCUS '10," "f(x)"). In 2001, the Head Office was relocated to Chuo-ku, Tokyo (present location). In 2003, the Sumitomo Corporation Corporate Governance Principles were established.
Toward the Centennial (2010s)
In 2012, the company set forth "What We Aim to Be in 2019, Our Centennial Year" and adopted "Be the Best, Be the One" as its new slogan. In fiscal 2014 the company recognized substantial impairment losses on several large-scale projects, forcing it to record an overall loss. However, with the medium-term management plan "Be the Best, Be the One 2017" being launched in April 2015, the company has made a recovery to the growth track by promoting managerial reforms and growth strategies as well as securing financial soundness. In April 2017, “Six Material Issues to Achieve Sustainable Growth with Society” was identified to satisfy both of our growth and solving social issues. Taking an opportunity of the Head Office relocation to Otemachi, Chiyoda-ku, Tokyo in Autumn 2018, the company promotes work style reforms.