By 2013-01-07
Happy New Year! I hope that all of you in the TTC Group worldwide and your families have enjoyed a fulfilling holiday season and that you are beginning what will be a rewarding year. Let me take this opportunity to (1) reflect on the past year, (2) reaffirm our core management emphases, and (3) describe my requests of you in 2013.
1. A look back on 2012
The past year was a period of severe challenges. In the global economic environment, stubborn stagnation in Europe and slowing growth in the big emerging economies of China, India, and Brazil offset the nascent recovery in the United States. Japan ebbed; as the strong yen undermined exports; and as the territorial dispute with China in the Senkaku Islands posed potentially long-term economic ramifications. Markets welcomed, however, the change in government that followed Japan's year-end election.
We also faced new challenges in serving our largest customer, Toyota Motor Corporation, and other companies of the Toyota Group. Those customers are revamping their business model in response to changes in automotive demand and in the competitive dynamics of the automobile industry. As a trading company, we have a big role to play in accommodating the Toyota Group's business model and thereby contributing to business growth for our Toyota Group customers. Our role encompasses distribution and marketing, including the cultivation of demand in new markets, and upstream operations in logistics and production.
The past year was also a period of important change in our business portfolio. We increased our equity stake to a majority holding in Eurus Energy Holdings Corporation, which operates wind farms and photovoltaic power plants around the world. And we acquired the French trading company Compagnie Française de l'Afrique Occidentale (CFAO), which has a 125-year history and an extensive presence in Africa. CFAO is our largest-ever corporate acquisition. We perceive immense potential for synergies with CFAO, and we need to work throughout our organization to fulfill that potential, as I describe later in this message.
2. Our core management emphases
Our Global 2020 Vision, which we adopted in April 2011, is a roadmap for sustainable, global growth. It provides for exercising TTC strengths in transforming our business portfolio from a simplistic dichotomy of automotive and nonautomotive to a three-way balance among the domains of Mobility, Earth and Resources, and Life and Community.
Achieving the three-way balance that we seek in our business portfolio will hinge on addressing customer needs of ever-greater diversity and complexity, on assimilating next-generation technologies, and on mobilizing our capabilities in new core businesses. Those objectives will be core emphases in our long-term business plan for the years to March 2018 and in our annual business plan for the year to March 2014.
In November 2012, we drafted our Management Mission Statement to stimulate and steer debate in regard to strategy and basic direction for the long-term and annual business plans. The Management Mission Statement highlights the need for breakthroughs and strategic partnering in fostering new core businesses. And it stresses the importance of abiding by the spirit of co-creation in building partnerships.
We are earmarking 250 billion for investment in the two years to March 2015 to fuel our growth momentum. Please note that co-creation with partners will be especially important in achieving our long-term goals.
An issue that we need to address in our partnering is the limited scope of most of our partnerships. Our partners tend to view us in connection with isolated functions in projects. We need to become a strategic partner-a partner to whom our counterparts will turn for comprehensive and proactive support in addressing a full range of issues. For that purpose, we need to undertake closer cooperation among our sales divisions and among regional operations.
Another issue is the pressing need for globalizing our human resources in support of fostering new core businesses. Our next-generation core businesses will include a lot of projects outside Japan, and we will therefore need a growing contribution from our national staff members around the world. We need to recruit, train, and promote people in each region with an eye to securing original ideas for new ventures, to translating those ideas into core businesses, and to working directly with partners to maximize our potential. This is a companywide issue that commands attention in every sector of our operations.
Let us bear in mind the furious pace of change in the business environment. Each of us needs to take the initiative in anticipating change and in devising measures and strategies for addressing that change in the spirit of fulfilling the Global 2020 Vision. I look forward to seeing that initiative take shape in your long-term and annual business planning.
3. My requests of you in 2013
I have three main requests of you in the year ahead. Please take these to heart and do your part in tackling the needs and issues cited below.
One, maintain a vigorous stance in fortifying our established operations and in fostering new operations. Start with broadening our earnings potential by leveraging the competences that we have built in our automotive operations and in other well-established operations. That should include making further improvements in advances where they are in place, applying advances in new ways in the same sector, and applying advances in completely different sectors.
Investment will be necessary, meanwhile, to foster future core operations in new sectors. So be prepared to allocate sufficient capital to worthy projects. Accompany that allocation, of course, with continuing attention to maximizing return on investment.
Two, continue working to raise efficiency in all operations, and press ahead aggressively with our scrap-and-build policy. Abiding by rigorous scrap-and-build criteria is crucial. We need to be unrelenting in scrapping unprofitable operations that offer little prospect of significant improvement. And we need to reallocate capital and human resources to operations that offer convincing prospects for becoming profitable, core businesses.
Three, strengthen relationships with our business partners, and find ways to help foster synergies with CFAO. Strategic partnering in the spirit of co-creation is indispensable in cultivating growth markets and in bolstering established operations. So nurture partnerships strategically, and supplement your partnering with breakthroughs to forge important new lines of business.
As for the TTC-CFAO alliance, the potential for synergies is immense and wide ranging. Both companies have strong and complementary positions in the automotive sector, so that is an obvious place to begin fostering synergies. But our mutual operations also harbor potential synergies in such sectors as healthcare, construction equipment, and beverages. And we at TTC need to mobilize our entire organization to tap that potential fully. I call on all of you to seek ways to work together synergistically with CFAO in your sector. Please be careful in your efforts to display due regard for CFAO's 125-year history and to show respect for our partner's corporate culture and management stance.
A closing word
Let's have a great year in 2013. Breakthroughs and co-creation are powerful dynamics, especially when unleashed by all 40,000 of us in the TTC Group. Let's make the most of those dynamics in pursuing the goals of the Global 2020 Vision.
Take good care of yourselves and of your loved ones. And let's enjoy working together and growing together.
|
distributed by
|
