http://global-sei.com/president_blog/ en Copyright 2010 Mon, 28 Jun 2010 09:58:00 +0900 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss On June 25, the annual shareholders' general meeting was held. Shareholders' meetings provide great opportunities for company management to engage in two-way direct communication with shareholders, listen to their opinions and convey our frank views to them. I attended this year's shareholders' meeting with far greater care than usual, since it was the occasion of reporting on our overcoming the once-in-a-century economic downturn and our plans for future development. During the question-and-answer session, at first we didn't get any questions. We nevertheless urged the audience to feel free to ask questions, saying that we were well prepared. The first question finally came, and it was about our efforts at improving profits. Fortunately, this was followed by many other questions. Some questions concerned the smart grid, cloud computing and water-related business. Regarding the smart grid, we explained that we are working from a long-term perspective -combining all our technological capabilities-with the NEXT Center and Power system R&D Laboratories, newly established to focus on developing hardware such as superconducting units and power devices. One shareholder suggested that we put up an advertising billboard at Universal City Station. We will seriously consider this suggestion, while looking into its cost effectiveness, since PR is an important matter for us, even if we are a B-to-B company. Another question concerned how business unit performance was evaluated in the process of determining officers' remuneration. We replied that, while we believe that officers are responsible for business performance, this is never evaluated on a short-term basis, considering the fact that some positive results come about only after steady efforts over 10 to 20 years, as exemplified by such success stories as artificial diamonds, optical fiber and compound semiconductors. All in all, we of the management team were able to proudly present the company's FY 2009 business results, which were far more positive than initially forecast, although due to the influence of the worldwide recession, sales amounted to about 70% of our best years. We attribute our positive results to our strong group-wide efforts at keeping our organizations appropriate to our abilities and reconstructing our cost system, promoting expanded and deeper internal solidification, and pursuing educational rearmament to strengthen our corporate constitution. At the general meeting, the management team offered our apologies to the shareholders for the anxiety caused following the on-site investigations by the Fair Trade Commission. At the same time, we expressed our firm determination to pursue fair corporate activities worthy of society's trust by further reinforcing our Anti-Monopoly Act compliance system. In closing the general meeting, the management team renewed our commitment to hard work and effort toward realizing steady contributions to society through sustainable growth and development, and the secure return of profits to the shareholders. ]]> http://global-sei.com/president_blog/2010/06/shareholders_general_meeting_2.html http://global-sei.com/president_blog/2010/06/shareholders_general_meeting_2.html To do as a president Mon, 28 Jun 2010 09:58:00 +0900 To conclude this series of entries I've been writing since last month about my business trips to Europe and South America, I offer this "extra" to relate to you some impressive episodes I had during the South America trip. The first episode is about the Sao Paulo Museum of Art (Museu de Arte de Saõ Paulo) on Paulista Avenue, which I visited just before leaving Sao Paulo. This museum has an impressive collection of Western art, unique in South America, featuring paintings by such masters as Rembrandt, Rubens, Monet, Renoir, Van Gogh, Cezanne, Gauguin, El Greco, Modigliani, Picasso… no wonder it is called a museum of miracles. I regret not being able to show you the paintings here; I was completely overwhelmed by the richness of the collection. I was also equally impressed by the fact that many of the works had been donated by business people. I was particularly thrilled by an unexpected encounter with a major work by John Constable, reputed to be the greatest landscape painter in the history of British art. The next episode also involves an unexpected encounter, but this time with a person: I met a football player of the powerful Sao Paulo FC during my flight from Sao Paulo to Rio de Janeiro. As you can see in the photo, I met Washington, Sao Paulo FC's forward, who was formerly with the Urawa Red Diamonds of the Japanese national football league. Despite being a star player, he was very friendly and pleasant, and casually accepted my request for a photo. We even had a nice conversation. This was just about the time that the members of the national team, who would be playing in the FIFA World Cup in South Africa, were about to be announced. Brazil was in a quite excited atmosphere, with people eagerly trying to find out if their favorite players would make the national team. For the final episode, I'd like to tell you about a breathtaking sight. Although I did not have the time to climb the hill of Corcovado, Rio de Janeiro’s premier sightseeing spot, atop which stands a giant statue of Jesus, I was able to visit Pao de Acucar, an equally famous tourist spot, just before going back to Japan. Pao de Acucar is a cliff on the beach. The name, which means sugar bread, comes from the unique sugar bread-like shape of the cliff. From the peak of Pao de Acucar, at an altitude of 400 meters which I reached via ropeway, I had a breathtaking view of the whole of Rio de Janeiro. "Rio de Janeiro" means "river of January" in Portuguese. This name is said to have been given by Portuguese who arrived near Pao de Acucar in January 1502 and mistook the present Guanabara Bay, seen from the peak, for a river. During my business trips I was able to meet people in group companies in Brazil and Germany, so far from Japan. Their enthusiasm and dedication encouraged and energized me. It was also great learning experience for me to feel the enthusiasm in Brazil firsthand, which was different from the enthusiasm one feels in China, another newly emerging economy. For that and for the unexpected encounters, the trips proved very meaningful for me. ]]> http://global-sei.com/president_blog/2010/06/attending_the_iwcc_joint_meeti.html http://global-sei.com/president_blog/2010/06/attending_the_iwcc_joint_meeti.html To do as a president Thu, 10 Jun 2010 10:59:57 +0900 Leaving Dusseldorf, I arrived in Sao Paulo, Brazil. It took me some 10 hours by plane including a short stop in Paris. This time I inspected Sumidenso do Brasil Industrias Eletricas Ltda (SDB). SDB is a manufacturing company of wiring harnesses for two- and four-wheel vehicles. The company enjoys the sales of about R$ 320 million with 2,400 employees working in its six plants in Minas Gerais, Sao Paulo and Amazonas. On this visit I went to their two factories in Minas Gerais: Pouso Alegre and Tres Coracoes plants. Incidentally, Tres Coracoes is the birthplace of Pele, "the King of Football." 　 With the population of 200 million and bountiful iron ore and other resources, Brazil is leading the global economy as a member of the emerging countries of the BRICs. Amid the financial crisis after the Lehman shock, the country weathered the difficult time without a major turbulence, and is now enhancing its presence in the world. Hosting the FIFA World Cup in 2014 and the Olympic Games in 2016, the country’s future prospects are very promising. Back in 1978 Sumitomo Electric first expanded its business activities to Brazil with the aim of introducing local production of motorcycle wiring harnesses. Over 30 years have passed since then; Brazil ranks fifth in the automobile sales with 3140,000 cars (in 2009), following China, the U.S., Japan and Germany. This market is expected to grow further to reach the sales of 5 million units in a few years. Consequently, SDB are eager to gain more purchase orders from Japanese and European automakers. Both of the SDB plants I visited were kept clean and tidy. This is partly because “Pika Pika” activities or the Shining Clean Campaign led by Sumitomo Wiring Systems Ltd. The goal of the activities is to maintain and improve further their production efficiency with the same standard in the all overseas subsidiaries. SDB is located near Sao Paulo, employing many talented graduates from the prestigious University of Sao Paulo. Backed by a 100-year-long trust established by 1.5 million Japanese-Brazilians, our seven Japanese staff members are also doing their best so far from Japan home. I was the first Sumitomo Electric President who had ever paid a visit to the group companies in Brazil. Commemorating the future prosperity of both the county and the company, we planted a tree of ipe amarelo or yellow ipe. This tree is also called the cherry tree of Brazil. Although ipe flowers come in various colors: purple, white, pink and so on; the only yellow ipe is regarded as the Brazilian national flower. The Sumitomo Electric Group will commit to the further progress of Brazil and thereby strengthening the tie with the country. I am looking forward to the full bloom of beautiful flowers between us. ]]> http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_3.html http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_3.html To do as a president Mon, 07 Jun 2010 09:07:41 +0900 This is an old photo that I received from London after my business trip this time. It dates September 14, 1990, when I was stationed in London. Sumitomo Electric’s then President Mr. Kawakami stopped by our office along the way of his business trip to Europe. We visited SHF together, which had just opened. I was only in my 40’s. This photo brought me back old memories. ]]> http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_2.html http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_2.html To do as a president Wed, 02 Jun 2010 08:45:22 +0900 Following SEBN, I stopped by Sumitomo Electric Hartmetall GmbH (SHG). This company is also located near Dusseldorf in Germany. Other than this SHG, we have two group companies that deal with cutting tools within Europe: Sumitomo Electric Hardmetal Ltd. (SHL) in the U.K. and Sumitomo Electric Hartmetallfabrik GmbH (SHF) in Germany. This time, I attended a managers’ meeting, which was held after their joint shareholders’ meeting. During this lunch meeting, I received the business performance reports from the managers of each sales and production base. Some 30 years ago, I finished my duty in Chicago, the U.S. and came back to Japan to serve as Marketing & Planning Section Manager of Hardmetal Division. After the inauguration, I became fully aware of the importance in strengthening our sales activities for cutting tool products in the German market. This is because Germany was advanced in machining and also an origin of cemented carbide. Since then, I scrambled for the establishment of the sales bases in the country. SHG, established in 1981, has six sales offices in Germany, France, Italy, the Czech Repaublic, Hungary, and Turkey, with over 120 employees. With its center in Germany, the company covers a wide business area including countries from Russia in the east to Portugal in the west and South Africa in the south. Fully using autobahns and airplanes, they are trying hard to enhance their presence in the cutting tool market. SHL was founded in 1984 in order to promote the sales of cutting tools in the U.K. and Ireland. About 20 British staff members are proactively conducting their sales activities for domestic and Japanese car manufacturers. The third company SHF is the first European manufacturing base of cutting tools, established in 1989 in preparation for the inauguration of the European Union. Located near Stuttgart in south Germany, the company aimed at local production of these products and improvement in technical service. This establishment took place when I was stationed in London as director of a company in charge of European business. Now the company has expanded its subsidiaries to build a factory in the Czech Republic. Since I was involved in the establishment of all the three companies, albeit in a different but devoted attitude, I listened to the managers’ reports thinking back fondly to the early days of the companies as if I was their “founding father.” As their reports went on, however, on-site perception came back to me and I found myself enthusiastically firing intensive questions. After the meeting, we took a group photo with the General Manager of SHG Mr. Sullot, Sales Manager Mr. Kuhlmeier, General Manager of Italian branch Mr. Rizzi and other executives from the three European companies. SHG is a mixed bag of personnel from 12 countries (Germany, France, Italy, Holland, the Czech Republic, Rumania, Belgium, Poland, Hungary, Uzbekistan, Turkey, and Japan). At the office English is dominant; however, once the lunch break starts, it is quickly switched into other languages, such as German, Turkish, and French. It depends on who they talk with and what they talk about. Viewing this, I was deeply impressed by the intricacies of the European continent. My visit matched the best verdurous season. The company site was filled with greens and they had occasional visitors of rabbits, squirrels and pheasants in their backyard. 　 The European market is currently in an embattled situation with the volcanic eruption in Iceland and Greece’s fiscal crisis, yet it still remains in the most important position in business. I am hoping to see the all three companies fully utilizing their networks they have built and vigorously and closely cooperating each other for further business expansion. * In present-day Hardmetal Division ]]> http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_1.html http://global-sei.com/president_blog/2010/06/visiting_group_companies_in_eu_1.html To do as a president Tue, 01 Jun 2010 08:39:57 +0900 On the way to the IWCC Joint Meeting in Rio de Janeiro, I stopped by our group companies in Europe and South America. It was the first time for me to visit them in years. As the head of the company I took the initiative in acting upon the principle of the three "actuals." These are examining actual sites, actual products and actual situations. Flying from Osaka, I stopped over in Paris before arriving in Hannover, Germany. It took me a whole day. The first company I paid a visit was Sumitomo Electric Bordnetze GmbH. (SEBN) in Wolfsburg, Germany. In March 2006 our company acquired SEBN, which manufactures and sells wire harnesses for automobiles. The company produces all the wire harnesses used in Golf and Polo, serving Volkswagen as a main supplier. With sales of 5 million euros and 13000 employees, SEBN operates in 15 countries including Poland, Slovakia, Bulgaria, Ukraine, Turkey, Morocco, Mexico, and China, and is now establishing a new factory in Tunisia. I have a special place in my heart for SEBN. This is partly because the acquisition of SEBN was the first and most important mission for me after assuming the presidency of Sumitomo Electric. Although the Lehman shock in 2008 dealt a heavy blow to the European automobile market and drove us to restructure some production bases, the year 2009 showed some signs of recovery. This year, there have been already some concerning factors such as the financial issues of South European countries. Yet, I am highly expecting SEBN’s great leap into the market. At the company, I received reports from the sales, manufacturing, and development representatives about current situations. This helped deepen my understanding about current circumstances and challenges we had to address. That evening, I had a pleasant and enjoyable time over traditional German cuisine of beers and sausages. I was accompanied by Mr. Bogner, director in charge of R&D; Mr. Kloepffer, director in charge of finance, Mr. Winnen, director in charge of manufacturing, and other local executives as well as our overseas representatives. Having an informal face-to-face communication at the table is an important way of building good rapport and trust toward a goal. This is especially true if our language, culture, value and background are different. Although the European automotive market is suffering from severe backdrop triggered by the current economic crisis, we are determined to utilize the technical and intellectual capital from Japan and Europe, so as to progress further. ]]> http://global-sei.com/president_blog/2010/05/visiting_group_companies_in_eu.html http://global-sei.com/president_blog/2010/05/visiting_group_companies_in_eu.html To do as a president Thu, 27 May 2010 08:47:27 +0900 The International Wrought Copper Council (IWCC) Joint Meeting, an annual conference among copper producers, smelters and processors, was held at the Sheraton Rio Hotel & Towers in Rio de Janeiro from May 9 through to 13. This time again, I attended the meeting as a presenter. The meeting had fewer attendants this year due to unfavorable economic circumstances symbolized by the prolonged global disturbance since 2008 and Greece’s economic downturn. There were, however, some 200 managers from 62 companies and senior officials from the Brazilian government. Following a government report on the Brazil’s current economic situations, meaningful sessions were conducted mixed with occasional astute questions. The sessions included a review of London Metal Exchange’s operation as well as the unstable copper price and other issues that copper producers and processors had to deal with. About 19 million tons of copper is consumed every year in the globe. Similarly in other commodities, China has rapidly increased its copper consumption up to 4-5 million tons. Furthermore, influx of speculative capital into the copper market has triggered the soaring or unstable copper price. As a result, uncertainty and instability remain in the industry, giving copper producers a hard time. During the sessions, I also gave a talk as an electric wire manufacturer. I explained, with some examples, the importance of developing alternative materials to copper by the traditional means of leveraging our ingenuity in the long run. In the field of data transmission, optical fiber was developed in previous decades to increase transmission capacity and speed, and it has replaced copper wire already. Facing the serious and impending global warming, we are now in need of new technology that contributes to energy saving, reduction of CO2 emissions and manufacture of lightweight vehicles. With this in mind, the development of high temperature superconducting materials and aluminum wire has been undertaken. (Nano carbon material and carbon film will also be included in the future.) I know that these topics are not always pleasant for copper manufacturers. However, there are immediate social challenges that can’t be overcome with copper alone (progressed information society, reduction of CO2 emissions, resource saving, and so on). Therefore, I believe that my presentation made some sense to the audience. We will continue to pay special attention to the environment and energy field as our company policy states. This international conference made me fully aware that it was a high time for the electric wire industry, which has long been relied on copper, to ponder over the way of realizing its future growth. ]]> http://global-sei.com/president_blog/2010/05/international_wrought_copper_c.html http://global-sei.com/president_blog/2010/05/international_wrought_copper_c.html To do as a president Wed, 19 May 2010 15:41:15 +0900 In mid-February we organized a four-day training program, inviting local executives of our affiliated overseas companies to Japan. I also wrote about last year’s Global Manager Development Program in the blog. This year we had 16 trainees from 11 countries: Australia, China, Germany, India, Indonesia, Italy, Morocco, Poland, Thailand, UK and USA. I personally took part in the Program by giving a talk to the participants, attending the welcome party on the second day and listening to participants’ reports on the last day. The welcome party was extended to a second round, and the party on the last day was equally pleasant and enjoyable. I believe that this program helped shorten the psychological distance between the Head Office in Japan and the participants’ companies. The Global Manager Development Program involves more than simply listening to lectures or going on field trips. The participants are given themes relating to the entire Sumitomo Electric Group, on which they must deliberate in two groups and report on the last day. Each year I look forward to these reports, and the suggestions made, with great interest. This year’s themes were "how to secure excellent human resources" and "how to enhance group consciousness and motivation." The two groups made proposals regarding the clarification of career paths and the importance of corporate branding. I found these proposals very well thought out, and I was strongly impressed and encouraged by the participants’ serious attitude. An active question and answer session also took place, as well as a deep and sincere exchange of ideas among those present. I expect that those suggestions will be effectively integrated into various future measures. The Sumitomo Electric Group is a rapidly globalizing company: about 40% of our sales come from outside Japan, and over 100,000 of the Group’s consolidated employee population of 150,000 are non-Japanese. As for future world market trends, it is certain that China, India and other newly emerging economies will achieve the greatest growth. Europe and North America, although in a difficult situation at the moment, still represent a huge developed market and cannot be ignored. As for Japan, its relative importance continues to diminish. For us Japanese, it is becoming necessary to adopt the way of viewing Japan in a larger worldwide context, and act accordingly. Speaking of Japanese in connection with the Global Manager Development Program, which is targeted at overseas executives, there are still some Japanese who have difficulty engaging in fluent conversations with overseas participants, although a growing number of our Japanese personnel are quite capable in this area. The Program also reminded me of the importance of training for Japanese human resources if we are to stay on the scene as a global player. ]]> http://global-sei.com/president_blog/2010/02/global_manager_development_pro_1.html http://global-sei.com/president_blog/2010/02/global_manager_development_pro_1.html To do as a president Wed, 24 Feb 2010 09:08:23 +0900 On February 4 and 5, the 48th Kansai Economic and Management Summit was held in Kyoto on the theme "Kansai as Leader of the Times – Resourceful and Flexible." Members of the governmental, industrial and academic sectors gathered together to discuss economic recovery, relationship between central and local governments, environment, globalization, regional revitalization and corporate management, in seven sessions. I participated in Session 6 (strategic corporate management) in the afternoon of February 4. The session, chaired by Mr. Akio Ogura, Chairman of Bando Chemical Industries, featured four speakers: Mr. Masayuki Oku, President of Sumitomo Mitsui Banking Corporation; Mr. Hiroyuki Suzuki, President of Maruichi Steel Tube Ltd.; Professor Kazuo Hiramatsu of Kwansei Gakuin University, who is also one of Sumitomo Electric’s external board members; and myself. The purpose of Session 6 was to discuss management reforms for mid-term reinforcement of competitiveness and corporate breakthrough measures amid the world economic crisis, as well as corporate tax systems and international accounting standards that affect business management. Since my role in this session was to begin a discussion on corporate management strategies for mid-term growth, I talked about Sumitomo Electric Group’s management strategies and challenges to mid-term growth. I began my talk by describing the business goals included in our five-year plan "VISION 2012," to be achieved by fiscal year 2012 (3 trillion yen in sales, 210 billion yen in operating income and 10% ROE). I then discussed our policy measures for achieving these goals: (1) solidification of the corporate constitution, mainly through reinforcement of manufacturing capability, (2) global market expansion, mainly into Asia and other newly emerging economies, and (3) development of new business segments, mainly through reinforced R&D in environmental and energy sectors-taking advantage of our core technology-as well as other future-oriented sectors. About 50 participants in Session 6 took part in the active exchange of opinions on employment, human resource development, necessity of corporate alliance for overseas expansion and so on. The exchange confirmed the general view that key future management strategies reside in reinforced competitiveness that draws on Japan’s traditional excellence in manufacturing, as well as on the exploration of Asian and other newly emerging markets. The Summit served as yet another occasion to confirm the business community’s great interest in the environmental sector in the face of the increasingly conspicuous resource and energy problems, as well as China, India and other newly emerging economies at this major turning point triggered by the worldwide recession since late 2008. At the same time, the Summit was a typical Kansai forum, where independent-minded participants frankly exchanged their views. ]]> http://global-sei.com/president_blog/2010/02/kansai_economic_and_management.html http://global-sei.com/president_blog/2010/02/kansai_economic_and_management.html To do as a president Mon, 15 Feb 2010 08:56:09 +0900 When you were a student, did you use mnemonics for the periodic table, which contains H, He, Li, Be, B, C, N, O, F, Ne, Na, Mg, Al, Si, P, S and others? The 12th element, magnesium (Mg), whose specific gravity is about 2/3 that of the 13th element, or aluminum (Al), and 1/4 that of iron (Fe), is the lightest among structural metals. Magnesium, which is abundant in nature, is known to be virtually inexhaustible. The bittern used in preparing tofu is also a magnesium compound. Magnesium is recyclable through a low energy process, and has therefore been the focus of attention as an environmentally friendly, lightweight material. AZ91 alloy is a magnesium alloy to which are added approx. 9% of aluminum and 1% of zinc, in order to improve corrosion resistance. No sheet of this alloy existed due to the difficulty of rolling and forming. Sumitomo Electric developed its own original casting and rolling method on the basis of technology developed through wire production, and has succeeded in mass producing AZ91 magnesium alloy sheet for the first time in the world. In terms of strength and corrosion resistance, this new alloy sheet surpasses AZ31 sheet (Mg with 3% Al and 1% Zn), which is already in use. It has a smooth surface due to its fine crystal structure. AZ91 sheet exhibits substantially higher elongation and strength than AZ91 cast material. It is suitable for press working, aesthetically pleasing coatings, and surface treatment, making optimal use of its beautiful metallic texture. This alloy sheet has superb vibration and shock absorption, and dent resistance in the event of dropping or other impact and is expected to find widespread applications, such as in portable devices and in-vehicle components. I will show you some prototype card and media cases fabricated in-house for public relations purposes. You cannot experience the sensation of lightness or the actual luster via my blog, but these cases are surprisingly light in the hand. Magnesium is a beautiful metal, as indicated by the Chinese character for magnesium, which consists of the symbols for “metal” and “beauty.” The prototypes truly demonstrate the metal’s bright beauty. Incidentally, I like the nearest elegant tortoiseshell colored case. This success was brought about through years of effort by our researchers. Their efforts will be wasted unless the products are put into commercial use. The AZ91 alloy sheet appeared on the front page of the Nikkei Business Daily dated January 14. We will promote the sales of this novel material, so that you will be able to see the product firsthand on an early occasion. Your support would be most appreciated. ■ Press Release:
The World’s First Commercial Production of AZ91 Magnesium Alloy Sheet ]]> http://global-sei.com/president_blog/2010/01/the_worlds_first_commercial_pr.html http://global-sei.com/president_blog/2010/01/the_worlds_first_commercial_pr.html Others Wed, 20 Jan 2010 13:09:05 +0900