Aiming to Be No.1 in Each Field in the Age of AI

You became President and CEO in April 2024, and the following month announced the Medium-Term Management Plan 2026 (FY2024–2026). As the new leader of Sumitomo Corporation, what was your perspective on the Company?

The current Medium-Term Management Plan began at exactly the same time as I assumed the role of President. During the previous three-year plan (FY2021–2023), we carried out extensive structural reforms. As a result, I believe we significantly strengthened the resilience of our business portfolio. Having completed that phase, I felt Sumitomo Corporation had reached the point where it was time to set our sights on a new stage of growth.

One phrase that stood out in the current Medium-Term Management Plan was "No.1 in Each Field." What did you hope to convey by placing such emphasis on being "No.1"?

More than anything else, I believed Sumitomo Corporation needed a fundamental shift in the mindset of every employee. That's why we chose "No.1 in Each Field" as the plan's central message. The phrase reflects our commitment as management to ensuring that every business defines its own competitive advantage while pursuing both capital efficiency and growth. At the same time, the concept of becoming “No.1 in Each Field” is intended to foster the conviction that every business has the potential to become a leader in its respective field. The objective is not for Sumitomo Corporation as a whole to become No.1, but for each business to identify where it can lead and how it could achieve that position. Achieving that requires more than ambition alone. To make that possible, it was essential that the people closest to the business shape the strategy themselves, translate it into measurable KPIs, and drive execution.

How did you communicate that message throughout the organization?

We began with a shared understanding that every business should aspire to become No.1 in its own field. We then asked each Strategic Business Unit to consider what "being No.1" meant for its business. Some responded by saying, "There are already dominant players in our industry. Given our current position, becoming No.1 is out of reach."

My response was always the same: "What exactly do you mean by No.1?" Are you referring to profits, revenue, sales volume, growth potential, return on equity (ROE), return on invested capital (ROIC), or risk assets (RA)? In many cases, people had concluded that becoming No.1 was impossible without ever clearly defining what they meant for their business. I encouraged them to think differently. Leadership does not necessarily require competing in the largest market. Even in a niche segment, there should be an area where only Sumitomo Corporation can deliver a unique value.

Once each business had defined its own version of No.1, how did you translate that into execution?

The first step was to have every business clearly articulate what kind of No.1 it was aiming to become. We then identified the approach needed to achieve that goal before establishing both Key Performance Indicators (KPIs) and Key Action Indicators (KAIs). The objective was to ensure that becoming No.1 remained more than an aspiration. By defining both strategy and measurable indicators, we turned the concept into a clear execution plan.

Sumitomo Corporation currently has 41 Strategic Business Units. Each is free to pursue a different definition of No.1 on its own timeline. Some goals may be achieved within three years; others may take 10. If every business succeeds in achieving the No.1 position it has defined for itself, the Company's overall competitiveness will be significantly strengthened. That collective ambition is what we mean by becoming "No.1 in Each Field."

The Medium-Term Management Plan identifies "growth leveraged by strengths" as its guiding principle and describes eight priority business areas as being "at the heart" of the Company's strategy. Why were these eight sectors – agriculture, construction systems, leasing, energy solutions, steel, digital, healthcare and real estate – selected?

The central theme of the Medium-Term Management Plan is "growth leveraged by strengths." Rather than spreading resources across areas where we lack a competitive advantage, we made a deliberate decision to concentrate management resources on business where we already possess – or have the potential to develop – a clear competitive edge.

The planned investment of ¥1.8 trillion is a concrete expression of that strategy. We identified eight priority growth areas – agriculture, construction systems, leasing, energy solutions, steel, digital, healthcare and real estate – as the primary destinations for capital investment. Each of these businesses has an established track record and the capability to adapt flexibly as market conditions change. By investing further in these areas, we intend to expand our competitive advantages. We also expect to deliver growth through inorganic opportunities, including acquisitions.
Other business areas, meanwhile, will continue to pursue organic growth by building on their existing capital base and driving autonomous improvements.

In September 2025, Sumitomo Corporation announced its acquisition of major U.S. aircraft leader Air Lease Corporation, a transaction completed in April 2026. What do you see in the future regarding that acquisition?

In October 2025, Sumitomo Corporation announced that it would acquire full ownership of leading systems integrator SCSK for approximately ¥882 billion. SCSK itself was created in 2011 through the merger of a Sumitomo Corporation IT subsidiary and CSK. Looking back, what were the objectives behind making SCSK a wholly owned subsidiary?

Our commitment to digital transformation has always been unequivocal. We launched a tender offer for SCSK valued at approximately ¥880 billion, which was successfully completed in December 2025. This was the largest single investment in Sumitomo Corporation's history. It meant that, in the same year, we undertook the two largest investments the company has ever made. Sumitomo Corporation already owned 50.6% of SCSK, a company that had achieved record earnings for 13 consecutive years. The question we continually asked ourselves was how we could accelerate its growth even further.

Meanwhile, advances in digital technologies and AI have been gathering pace. Generative AI, evolving almost daily, is rapidly transforming not only everyday life but also the way business itself is conducted. Watching these developments, I realized that the greatest risk facing Sumitomo Corporation was no longer embracing AI, but failing to use it at all.

Regardless of whether we made SCSK a wholly owned subsidiary, the direction we wanted to pursue as a group in digital and AI was already very clear. SCSK had already been making moves in this regard. In March 2025, it acquired leading network infrastructure provider Net One Systems through a tender offer worth approximately ¥360 billion (the two companies are scheduled to merge in April 2027). That acquisition expanded SCSK beyond systems integration into network integration and security services.

You have spoken about accelerating growth through your digital and AI strategy. In practical terms, what does that involve?

For example, we are sometimes briefed by major electronics manufacturers within the Sumitomo Corporation Group on advances in AI development technologies. The technologies themselves are undoubtedly impressive. Yet we also hear that they face a common challenge: they lack opportunities to test and validate those technologies in real operating environments.

Sumitomo Corporation, on the other hand, has approximately 900 operating companies and around 100,000 customers and business partners. That means we have an extraordinary number of real-world settings where digital technologies and AI can be applied. The same is true for SCSK. Expertise only becomes valuable when it can be applied in real business operations, and we have those operating environments. This is why I've said I want them to make full use of our businesses.

Our businesses are full of opportunities for growth and transformation. The important thing is to develop these opportunities together. That is the central idea behind our digital and AI strategy. The industry itself is not what matters. This isn't a question of saying, "We're in the steel business, so digital doesn't concern us." Every business line has reached the point where it must embrace transformation. AI-driven transformation cuts across every business. Even in the steel pipe business – where I spent much of my career – the industry is rapidly moving towards AI to manage global inventories, optimize their utilization and respond more effectively to customer demand.

What other initiatives are underway?