Upon my inauguration as President and CEO of Sumitomo Corporation in 2012, I expressed my desire to make the Sumitomo Corporation Group an organization that, after reaching its centennial in 2019, will continue for another 50 years, 100 years, and on without end. Over the seven years remaining before we reach this milestone, I want to build a firm base to realize this aspiration.

We believe the Sumitomo Corporation Group’s business environment will continue to be marked by dramatic change and uncertainty. Also, our businesses themselves will grow increasingly complex and require longer start-up and development periods, as typified by our operations in the areas of natural resources and infrastructure.

To attain steady, continuous growth even in this sort of business environment, I see it very important for us, while responding flexibly to current changes, also to look ahead to the major trends of the future, sketch a medium-to-long-term vision of what we aim to be, and steadily execute strategies to achieve this vision.

It is based on this thinking that we came up with our vision of “What We Aim to Be in 2019, Our Centennial Year” and the accompanying slogan, “Be the Best, Be the One.” This slogan embodies our aspiration to be the best in every respect and to be widely appreciated by society.

I believe the first and most crucial step to achieving this objective is to go back to Sumitomo’s Business Philosophy, Business Principles, and the Sumitomo Corporation Group’s Corporate Mission Statement (including our Management Principles and Activity Guidelines), and promote business activities in line with these core documents.

In keeping with their directives to “place prime importance on integrity and sound management” and “never pursue easy gains,” we will stay true to our corporate character even as we gauge the changing times, formulate our own plans, and steadily execute our strategies, leveraging the strengths and abilities that we have amassed so far to create value that only we can. And above all, we will operate openly and squarely, rooting our business in activities that not only expand our earnings but also contribute to the nation and society so as to fulfill the tenet of Sumitomo’s Business Philosophy, “Benefit for self and others, private and public interests are one and the same,” thereby winning broad recognition of the Sumitomo Corporation Group as an essential organization that exceeds the high expectations directed toward us.

In addition, we have established a quantitative picture of what we aim to be as we approach our centennial, aiming to build a solid earnings base and to achieve an even higher level of profit growth while maintaining financial soundness. Specifically, we envisage total assets of ¥9-10 trillion and consolidated net income of at least ¥400 billion in fiscal 2019 (April 2019 to March 2020). Our goal is to construct a solid earnings base for another 100 years of achieving steady, continuous growth while staying financially healthy.

Our centennial is just one milestone on our way. When we consider how we should conduct our operations after that in order to continue to play a vital role in society and keep growing steadily, we come back to Sumitomo’s Business Philosophy. The Sumitomo Group has been in business for four centuries. This is a record matched by few organizations anywhere in the world. And I believe that it has been made possible by putting Sumitomo’s Business Philosophy into practice.

I think that if each of our employees constantly considers whether their actions are in line with Sumitomo’s Business Philosophy and the ­Sumitomo Corporation Group’s Corporate Mission Statement and exercises Sumitomo Corporation’s distinctive strengths, we can attain our goal to “Be the Best, Be the One.”

Sumitomo Corporation formulates a medium-term management plan every two years. ƒ(x)—pronounced “f-cross”—the plan for the two years ended March 31, 2013, set a quantitative target of net income totaling ¥480 billion over the two-year period. Consolidated net income reached an all-time high of ¥250.7 billion in fiscal 2011. While the figure was only ¥232.5 billion in fiscal 2012, mainly due to the impact of falling resource prices, we still attained our two-year target. The risk-adjusted return ratio was 15.2% over the two years, also beating the target of 15%.

Investment and loans over the two years totaled ¥560 billion, broadly in line with the planned ¥580 billion. This included ¥205 billion for the resource field and ¥355 billion for the non-resource field. We worked to build a balanced business portfolio without too much exposure to any one business area as we made investment and loans to expand our future earnings base.

At the same time, we divested assets to the tune of ¥860 billion during the two years of ƒ(x). With this, we recovered about ¥380 billion in cash, and we believe we have made solid progress on balance-sheet management. We sold stakes in some of our subsidiaries, notably Sumitomo Mitsui Auto Service Company, Limited and Jupiter Shop Channel Co., Ltd. with the aim of reinforcing our revenue base from a medium-to-long-term perspective through alliances with strategic partners. In addition, we made headway divesting unpromising businesses, including ones that were unlikely to achieve major growth due to changes in the operating environment and other factors, and ones that did not meet our initial earnings expectations.

However, there are still challenges to be tackled. For one, we need to steadily raise the value of our investment and loans. We must quickly increase the value of those major investment and loans that are not generating earnings in line with the initial business plans. Also, in the context of the ever-changing business environment, we need to continue downsizing and divesting businesses with poor earnings and growth potential, while shifting even more corporate resources, including personnel, into strategic fields to enhance our earning power.

Thoroughly enhancing our earning power is essential for achieving profit growth at a higher level than before—raising our consolidated net income from the current ¥230-250 billion to the level of at least ¥400 billion set forth in our vision of what we aim to be. To this end, under “Be the Best, Be the One 2014” (BBBO2014) we will aim for consolidated net income of ¥240 billion in fiscal 2013 and ¥270 billion in fiscal 2014 by “pursuing and combining our strengths and capabilities” and the “stimulating the metabolism of our business portfolio from a medium-to-long-term perspective.”

Specifically, we will allocate corporate resources on a prioritized basis to the businesses that constitute our current earnings pillars in order to strengthen them even further. We are planning to make more new investment and loans than ever before, with a total budget of ¥750 billion over the course of BBBO2014. We will designate “primary fields” in each operating segment. These are areas where we have advantages and know-how, and that will underpin earnings in the future. We will set clear priorities for these primary fields and further tighten the focus of our investment activity so as to steadily build up a portfolio of prime assets.

We will also pursue profit opportunities during these two years by identifying the targets for “­strategic industrial focus” and “strategic regional focus”—business fields and regions where there is strong medium-to-long-term growth potential and where we can capitalize on our strengths and capabilities—and strategically allocating corporate resources to them. With respect to recent investments that have not become as profitable as initially planned, we will intensively deploy human resources and know-how to the businesses in question, focus on attaining steady value gains, and strengthen earning power.

Accomplishing this will require effective utilization of our finite corporate resources. Accordingly, we will take steps to scale back or exit from businesses with weak prospects for revenues and growth in response to changes in the environment. Through these measures, along with ­balance-sheet control via strategic tie-ups with major partners, we are planning asset divestitures and reductions totaling ¥770 billion over the two years of BBBO2014.

These moves will enable us to activate the metabolism of our business portfolio by shifting corporate resources, including human resources, to medium-to-long-term growth areas. We will operate this cycle with greater speed than before, and we look to build a stronger earnings base while maintaining financial soundness.

Fulfilling our responsibilities to society and the environment is deeply related to Sumitomo’s Business Philosophy, which I touched on before. The concept of “Benefit for self and others, private and public interests are one and the same” (meaning that Sumitomo’s business activities must benefit not only Sumitomo’s own business, but also society and the nation) is connected to the precepts of the Sumitomo Corporation Group’s Corporate Mission Statement: “We aim to be a global organization that constantly stays a step ahead in dealing with change, creates new value, and contributes broadly to society,” and “To achieve prosperity and realize dreams through sound business activities.” For the Sumitomo ­Corporation Group, CSR is nothing other than putting our Corporate Mission Statement into practice. We see the fulfillment of our responsibilities as something to be accomplished through the conduct of sound business activities and through the planning and implementation of business strategies based on consideration of what we can and should do as a corporation to help solve social issues, accompanied by dialogue with various stakeholders.

For instance, when we are developing businesses in other countries, we must give prime consideration to the question of how to put down roots in the community and contribute to local society. Mining development projects are a typical example. We do not simply mine resources. Naturally, we give our utmost consideration to environmental protection. We also engage in extended dialogue with stakeholders, including mine workers, local residents, and national and regional government officials. In addition to contributing to the economy by making tax payments and creating jobs, we set up physical infrastructure used by industry and in everyday life, as well as support its management. In this way, we play a role in regional economic, industrial, and social development. Further, we plan to lend a hand to the development of communications infrastructure, railways, and industrial parks in ­Myanmar, where major economic development is expected. We want our business operations in the country to lead to better local living standards and a more vibrant economy.

We see balancing corporate value improvement and dividend enhancement as an important factor in increasing returns to shareholders. Our basic dividend policy is to continue steady payouts over the long term, and we aim to raise dividends per share in line with medium-to-long-term profit growth.

During the two years of BBBO2014, we look to apply a dividend payout ratio of 25%, taking into account relevant factors such as the economic environment and our investment plans. Based on this, we expect to pay dividends per share of ¥47 in fiscal 2013 if consolidated net income reaches the planned level of ¥240 billion.

I recognize that we must overcome multiple hurdles to put profit growth on a higher level than before. But through the discussions we held with each business unit as we were finalizing our vision of what we aim to be, I gained a renewed awareness that the Sumitomo Corporation Group has countless business opportunities. I am confident that we will attain our vision if we steadily execute all of our strategies.

I believe it is important that our employees each hold firm aspirations for the sort of company they want to make of Sumitomo Corporation in the context of their respective workplaces, think about where they want our operations in each business field to be in 2019 and beyond, and tackle the necessary tasks one by one to make their own vision a reality.

I want to start by bringing the entire organization together to achieve the goals in “Be the Best, Be the One 2014” as the first step toward realizing our vision of what we aim to be.

I invite you to look forward to the initiatives of the Sumitomo Corporation Group in the period ahead.