July 30, 2007,09:54 +0900(JST) The Ataka Collection at the Museum of Oriental Ceramics, Osaka (1)

I love visiting art museums. When I was working in the UK, the late Mr. Masao Kamei, former Sumitomo Electric President, used to take me to various museums with him. Mr. Kamei himself had studied painting under the renowned painter Keinosuke Ito, and I remember seeing him standing almost immobilized for a long while in front of his favorite tableaux in the museums we visited together. As for myself, unfortunately I don’t have that kind of aesthetic sense, but I do try to make the most of every opportunity I get to appreciate art objects in the true sense of the term, embodiments of the genius and efforts of people dedicated to their art since ancient times.

Very often, art lovers become collectors, and there are indeed numerous collectors of all sorts in this world. In fact, if we don’t limit the notion of collection to art objects, we are all probably collectors of one kind or another. I’m not into collecting something myself, but when I was a local supervisor I did have the experience of acquiring paintings, after careful examination, as office furnishings for the company before the period of the ‘art bubble,’ so I can’t say I’m a total stranger to the pleasure of art collection.

For those of us who work at Sumitomo, the words ‘collector’ and ‘collection’ inevitably bring to mind two things that we contact visually from time to time and cannot easily forget.

One is the collection of ancient Chinese bronzeware and bronze mirrors acquired from the middle of the Meiji period (1868-1912) to the Taisho period (1912-1926) by Shunsui Sumitomo, the 15th Head of the Sumitomo Family. This collection, known as the Sumitomo Collection, is on display in the Sen-oku Hakuko Kan Museum in Kyoto, as well as in its Tokyo annex. I hope to talk about the beauty of this collection sometime later in this blog.

The other is the collection of Mr. Eiichi Ataka, Japan’s premier art collector, in this case of oriental ceramics, which were acquired as part of the business activity of the former Ataka Co., Ltd. Today, this collection belongs to the Museum of Oriental Ceramics, Osaka, which is located in Nakanoshima in central Osaka, and Sumitomo is very closely linked to the Ataka Collection’s presence in this museum. I hope to write about this in my next entry.

July 27, 2007,13:54 +0900(JST) The Upper House Election

The Upper House election is approaching. The importance of this election, as that of all elections, is too obvious to explain; how the Japanese public will make their judgment on this occasion is extremely important in determining the country’s future. Even so, I have some misgivings. After every election, I can’t help feeling somewhat disappointed by the low level of interest the Japanese public takes in elections in general and, consequently, by the low turnout rates.

As to the upcoming election, it is generally said that people are seriously interested this time, with much momentum gathering toward election day; a heavy turnout is expected. Nevertheless, I can’t help recalling that even in the five most recent Upper House elections, where voting was the only direct political action most people could take to have their say, the turnout rate in some places even fell below 50%!

Those who don’t vote are often those who complain as much as they want, but refuse to take action by fulfilling their duty. Japan’s future seems rather gloomy, if such people should increase in number.

Gu Yanwu (1613-1682), Chinese thinker of the early Qing dynasty, wrote that a country’s rise and fall also depends on one lowly man, meaning that not only political leaders, but also ordinary citizens have a heavy responsibility to fulfill, in accord with their situation, in running the country. As Yanwu’s words suggest, I believe that instead of thrusting the responsibility upon the Prime Minster, the government and the ruling and opposition parties, ordinary people must carefully study each candidate’s position and fulfill their duty and exercise their important right, by going to vote.

July 24, 2007,08:50 +0900(JST) VISION 2012 (4): R&D, capital expenditure and CSR

To conclude this series about VISION 2012, I’d like to write about what VISION 2012 says regarding R&D, capital expenditure, and corporate social responsibility (CSR).

To ensure that our diversified Group continues to grow, it is essential to consider developing new products that are both related and totally unrelated to our existing business categories. We keep working on fundamental research looking 10 to 20 years ahead.
We are thinking about setting the target ratio of new product sales at 30% for fiscal 2013 (April 2012 to March 2013). Our new product development themes are “Environment and Resource Conservation,” “Life Science,” and “Safe, Secure and Ubiquitous Society” in consideration of society’s needs, which expand as living standards continue to improve. R&D will be based on an accurate understanding of customer needs, so as to ensure the Group’s continuous growth.

In VISION 2012, a total of 1 trillion yen is earmarked for prior investment over the next five years, including capital expenditure and R&D. Of this, a total of 400 billion yen will be invested in R&D. For our existing business categories, R&D will mainly concern material renovation and product modularization, so as to maintain and improve our competitiveness. Moreover, as I’ve just stated, we’ll also focus our R&D efforts on developing brand new products that may be pillars of our future activities. This will require active support for new business category development.
For the same five-year period, a total of 600 billion yen will be expended on capital expenditure, basically including investment in priority areas of the core business categories, and more active overseas investment aimed at enhancing our worldwide presence.

Finally, as part of our CSR activity, this year, which marks the 110th anniversary of our operation, we established the “Sumitomo Electric Group Basic Policies on Social Contributions,” from the standpoint of performing our social duties as a corporate member of society.

The Basic Policies were determined based on three key phrases, “respect for human resources,” “attaching importance to technology” and “creating a better society and environment,” in compliance with the Sumitomo Business Spirit and the Sumitomo Electric Group Corporate Principles. More specifically we will be more active than ever in our social contributions in terms of developing human resources, promoting community-oriented social contribution programs and supporting employees’ voluntary social contribution activities.

As concrete measures, from fiscal 2008 (April 2007 to March 2008) to fiscal 2009 (April 2008 to March 2009) the Sumitomo Electric Group will establish the Sumitomo Electric Group Scholarship and Fellowship Fund, launch a special subsidiary for hiring disabled persons and introduce a volunteer leave system. Moreover, community service activities that the Group has been carrying out until now will be continued and reinforced.

By performing our duties from the CSR perspective, in addition to our business activities we hope to take steady steps toward becoming a truly Glorious Excellent Company, with support from a wide spectrum of stakeholders, while maximizing value for shareholders.

July 20, 2007,09:30 +0900(JST) Beauty of Kushiro Marshland

As I mentioned here the other day, at the recent shareholders general meeting we renewed our commitment to our duties before the shareholders and other stakeholders. Now that that’s over, and as I’d been very busy, with little private time, I decided to relax and go on a short trip to Hokkaido with my wife on the weekend immediately after the shareholders meeting.

Kushiro Marshland

We were four couples, ourselves and three couples of friends we often get together with; I truly enjoyed myself. It’s great to take time off from work like this from time to time. I’m really grateful to Mr. and Mrs. F, who took the initiative in organizing the trip.

We went to the Kushiro Marshland, which I visited for the first time. With very little background knowledge, we went to Lake Toro and traveled from Toro to Kushiro Stations on the sightseeing train “Kushiro Marshland Norokko.” I was told that “Norokko” means “noroi (slow) torokko (tram).” From this slow tram, which traveled at about 30 km per hour, we were able to admire the breathtaking beauty of the Marshland!

The mood of the Kushiro Marshland, with its ever-changing beauty, ranging from majestic to mysterious, won this place the title of Japan’s 28th (newest) national park and first designated wetland under the Ramsar Convention (the Convention on Wetlands of International Importance especially as Waterfowl Habitat).

I had heard that the Japanese red-crowned crane depicted on the old 1,000-yen bill was based on a photograph taken on the Kushiro Marshland. Standing there and admiring the beautiful early summer plants was a truly moving experience.

On Day Two, the four men went to play golf. Perhaps you don’t have to go all the way to Hokkaido to play golf, but it was a great way to enjoy each other’s company in a very relaxed atmosphere.

The score? Let’s just say it’d be better not to go into specifics … This two-day trip was truly a physically and mentally refreshing break for us.

July 17, 2007,11:46 +0900(JST) VISION 2012 (3): Segment-specific growth strategies

Today I’d like to explain the growth strategies for the five business segments of Sumitomo Electric.

In the Automotive segment, we will aim at “Global 25” with the segment’s main product, wiring harness, that is, a 25% share on the world market. To that end, we’re hoping to ensure orders from Japanese manufacturers and to increase our share of the non-Japan world market by at least 15%.
We’re also hoping to further enhance our profitability by actively responding to automakers’ requests, which continue to become increasingly sophisticated, and capitalizing on the Sumitomo Electric Group’s capabilities.

In the Information & Communications segment, we hope to firmly establish ourselves as a world-leading optical product manufacturer by increasing price competitiveness with our optical fibers and cables against the background of anticipated worldwide expansion of FTTH, and by investing our managerial resources in a number of priority optical device-related areas, such as the development of super-high-speed optical modules.
Moreover, in the fast-growing broadband equipment market, bolstered by expected progress in next-generation network (NGN) construction, we’re planning to develop attractive products, including access equipment and service terminals, and to expand their sales, drawing on the collective strength of the Sumitomo Electric Group.

In the Electronics segment, we will focus mainly on product improvement and sales expansion in the product categories intended for growth areas, such as mobile phones and liquid crystal displays.
To win out in low-cost competition, we will strive to improve our manufacturing expertise and global competitiveness by, for example, reinforcing our production centers in China and opening new facilities in Vietnam, so as to shorten the lead time up to product delivery.
We also intend to commence activity in new product categories, such as environmental protection and biotechnology, while considering the possibility of collaboration and M&A with other companies.

The Electric Wire & Cable, Energy segment continues to face a very challenging business environment, amid declining electricity-related investment in Japan. However, to bring this mature segment back on the growth track, we will further reform its business structure, reduce cost and take measures to ensure better and more stable profits. At the same time, we will actively reconstruct our energy infrastructure-related operations which are expected to grow in countries and regions outside Japan, particularly in the United States and Asia.
We will also vigorously explore new business opportunities for our superconducting cables and other products in areas such as energy saving, resource conservation and environmental protection.

In the Industrial Materials segment, we will further enhance our competitiveness with our core technologies, mainly for new materials development, processing and raw material recycling. We will focus our resources in priority areas in which we intend to make our products the world’s best three, among the great variety of products on the market.
As well, to secure raw materials and contribute to global environmental protection, we will further enhance our recycling efforts.

SUMITOMO ELECTRIC President CEO Masayoshi Matsumoto

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.

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