The President's New Year Message for 2013

Happy New Year to all of you! As we start 2013, I extend New Year's greetings from headquarters here in Tokyo to all the members of the Sumitomo Corporation Group around the world. How did you spend your New Year's holiday? I enjoyed a relaxing break with my family at a hot spring and feel physically and mentally refreshed. On the New Year's Day, I was able to see the first sunrise of the year over the ocean. As the sun peeped above the horizon, a ray of light appeared on the surface of the sea extending toward me, as if to say, "You can move straight to your goal." I felt that it had given me great energy and courage.

The environment for our company

Last year was a year of elections and changes of government. Here in Japan the Liberal Democratic Party took power after three years of rule by the Democratic Party of Japan. In China, the top leadership of the Communist Party was replaced for the first time in 10 years. And presidential elections were held in major countries like France, Russia, the United States, and South Korea. It was also a year in which we could not avoid being aware of geopolitical risks, not just in the Middle East, but also here in East Asia, where the touchy issues include strain over the situation in North Korea. On the economic front, it was a year in which the tardiness of the recovery in China, coming on top of sluggishness in Europe, contributed to an increased sense of deceleration in the global economy and a rising level of uncertainty.

What sort of year will 2013 be? Sumitomo Shoji Research Institute expects it to be a year of "getting on track to recovery through resetting and rebalancing." Following the resetting of the political scene in major countries last year, the institute predicts that this year will bring a process of seeking new balance in various areas of policy under the new administrations. In Europe, the single-minded pursuit of austerity should give way to a growth-oriented stance. In China, the focus should shift to pursuit of steady growth. And in the United States and Japan, the institute expects to see renewed consideration of energy policies and fiscal policies that will be sustainable over the medium to long term.

The institute takes the view that these developments will lessen the uncertainty about government policy and that this will serve as the backdrop for the world economy to get on track to recovery. But the expectations of recovery based on policy shifts may also be said to be evidence that economies and politics have become even more interdependent than before.

In the face of such changes in the environment, I believe that the Sumitomo Corporation Group must not respond passively but rather must always take the initiative and move preemptively. Achieving ongoing growth under conditions of any sort, regardless of changes in the environment and policy-related risks, is the way for our company to survive for another 50 years, 100 years, and on without end.

What we aim to be in our centennial year

In order for our company to grow stably and continuously for another 50 years and 100 years, first we must look ahead at the seven years through 2019, when our company will mark the centennial of its founding, and realize the vision of "What We Aim to Be in 2019, Our Centennial Year". And in order to build a more solid foundation for the next 100 years, I want all the employees of the SC Group to work as one under our motto "Be the Best, Be the One," striving to become a corporate group that is recognized by society as meeting and exceeding the high expectations directed toward us, creating value that nobody else can match in ways befitting our distinctive identity.

Achieving the vision of what we aim to be

In order to achieve our vision of what we aim to be in our centennial year, I believe we must achieve not only profit growth but also a higher level of growth in every area, including strategy, operations, compliance, and human resources development.

What is most important in my view is for each one of us to grow as individuals. I think it is crucial above all for each individual not just to enhance his or her knowledge and skills but also to work with spirit and a lofty sense of ethics, taking a more elevated gaze and a broader perspective than before. Our growth as individuals leads to the growth of our organizations, and the growth of our organizations leads to the growth of our company, thereby making it possible for the SC Group to "Be the Best, Be the One." I would like to share with you once again my thoughts about what is important for us as we seek to achieve this vision:

First is to consider matters from a medium-to-long-term perspective and to have an axis of judgment based on the big picture.

The business environment in which we are operating has become more uncertain. This makes it even more important for us to grasp the big trends by taking a bird's-eye view of the whole scene from a medium-to-long-term perspective.

I want us to firmly establish the habit of considering what sort of changes may occur as major trends by looking ahead to the future using a set of medium-to-long term assumptions and determining what moves we should make to deal with these changes.

Second is to take a view toward building up our existing strengths.

In order to be an organization that constantly stays a step ahead in dealing with change and creates new value, we must first recognize our own strengths and capabilities. Based on that recognition, I want to join with you in discussing what sorts of strengths we should built up and what sort of capabilities we should tap for the future so as to create value that nobody else can match, and how we can draw on our integrated corporate strength to enhance our strengths further.

The environment in which we operate is constantly changing, and new fields of business are opening up one after another, extending across the traditional dividing lines between industries, countries, and regions. This broadens the opportunities for the SC Group to create new value by drawing on our integrated corporate strength, making full use of resources and know-how from both inside and outside the company. The power to take changes as chances and to transcend boundaries is, I believe, a strength we have that nobody else can match, providing the driving force for our creation of new value.

Third is to take the perspective of creating value that will contribute to society.

As population growth and urbanization progress in the emerging countries, the world faces problems that are greater than before on various fronts, including the issues of energy, food, and the environment. What I think the world expects of us in this context, as a corporate group with deep ties to virtually every region and industrial sector, is the power to find new needs arising from social problems and to supply solutions. I believe that active involvement in efforts to solve social problems of global scale will offer growth opportunities for the SC Group.

The idea of being useful for society and contributing to it is part of our corporate genetic makeup, as expressed in the phrase "Benefit for self and others, private and public interests are one and the same" (from Sumitomo's business philosophy), and it forms the backbone of the Sumitomo Corporation Group's Corporate Mission Statement.

I believe that, alongside our own growth, contributing broadly to society through our business activities is the way for us to win recognition and respect from society--in other words, to achieve our vision of being "a corporate group that is recognized by society as meeting and exceeding the high expectations directed toward us."

A year for making a new start

I think the year ahead will extremely important as the start of our campaign to achieve "What We Aim to Be in 2019, Our Centennial Year." I want us to approach the year ahead with the sort of determination required for blazing the trail to a new era.

This is the first in the seven years from now through our centennial. To use the analogy of a car, we will be driving in the first of seven gears. First gear refers to the gear that provides the greatest power when starting to move. During this year I want each of us to recognize our respective roles and fulfill them so that we can get off to a strong, sure start. and to take a strong, solid first step forward.

First, let's make sure that our footing is solid so that we can wrap up f(x), our current medium-term management plan, with the steady implementation of our initial objectives, and so that we can start moving toward achievement of our vision.

Next, it is crucial for us to formulate our next medium-term management plan, which will embody the medium-to-long-term strategies that will be our concrete path toward achievement of the visions that each organizational unit aims for, based on our centennial vision, and that will serve as our action plan for the first two years of our pursuit. Then I want us to steadily implement our plan for the first year so as to vigorously trace a growth curve leading to achievement of our vision for fiscal 2019.

Today, as we start the new year, I would like all of us to join in reconfirming the commitment of the SC Group to the new challenge of achieving the vision of what we want to be. Let's all show spirit and enthusiasm in taking a solid first step toward our goal.

To conclude my New Year's greeting for 2013, I extend my best wishes to you, hoping this will be a year of good health and successful activities for all of you in the SC Group around the world and for your families.