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Newsletter "SEI NEWS" 2012

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[Newsletter "SEI NEWS" Vol.421]

Poised at the Start of the Second Half of the Fiscal Year

Masayoshi Matsumoto, President and CEO

As we look around the world, there is yet no exit in sight for the eurozone debt crisis, though lately it is regarded with somewhat less alarm; economic growth in emerging countries is also reported as slowing down due to sluggish exports to Europe; the United States on the eve of a presidential election has likewise implemented additional quantitative easing measures in the face of a constantly high unemployment rate. Japan is no exception: the deflation trend continues; a strong yen seems to be here to stay, and the trade balance is deeply in the red. Meanwhile the Diet has gone into recess, leaving pressing political issues in limbo but instead ushering in a flurry in anticipation of an imminent general election.

Furthermore, the state of affairs remains unstable in many parts of the world: territorial disputes between Japan and its neighbors South Korea and China are threatening to escalate tension throughout East Asia, while in the Middle East post-Arab Spring turmoil shows no sign of abating.

None of these events work in favor of our business activities. Projections made at the beginning of the year seem to gain in uncertainty with each passing day. I have always reiterated to our people that when the environment surrounding us is hostile, we have all the more reason to make strenuous efforts to accelerate SEQCDD (Safety, Environment, Quality, Cost, Delivery, and Research & Development) improvements, the source of our competitive strength. This is why on October 1, the first day of the second half of the fiscal year, I issued a president’s message calling on all employees to commit to further improvement in “safety and environment,” “product quality,” “quality of office work,” and “SWITCH Plus Campaign” with a stronger-than-ever motivation.

Four years ago amid the global economic recession triggered by the Lehman Brothers bankruptcy, I braced myself that recovery would take at least three years. To make a great leap forward once we emerged from the tunnel, we made group-wide efforts to retrain employees, reform the organization and reinforce the thorough implementation of SEQCDD under the slogans “keeping our organizations appropriate to our abilities and reconstructing our cost systems,” “expanding and deepening internal solidification,” and “reinforcing educational rearmament.” Through these measures we returned to growth in 2010, but 2011 was accompanied by catastrophic natural disasters including the Great East Japan Earthquake and Thailand floods, which significantly affected our group.

The Japanese saying “misfortune and blessing are like alternating strands of the same rope” may sound rather philosophical, but I do believe business environments are naturally prone to rapid and abrupt changes. In contrast, manufacturing strength and human resources supporting our businesses are unaffected by environmental changes, constantly remaining for us manufacturers as sources of competitiveness and lifelines ensuring sustainable growth.

Reminding myself how all group company employees worked together to overcome harsh conditions following the Lehman Brothers bankruptcy, I look forward to working with renewed vigor toward building corporate strength that is immune to environmental changes.

 

Masayoshi Matsumoto

 

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