Season's greetings to you all
I would like to take this opportunity to share my thoughts with you as we stand on the threshold of a new year.
View of the macro-environment
2007 was a year in which we witnessed the further acceleration of economic globalization. The growing presence of a number of countries, especially China and Russia, added a more multilateral dimension to the dynamism of the global economy, and cross-border flows of goods, money and people continued to expand. I expect 2008 to add new impetus to these major trends in various fields of activity, both overseas and in Japan.
On the political stage, presidential elections will be held in Russia as well as in the U.S. and new leaders will emerge in both countries. Together with last year's leadership changes in France and Britain, this will complete the changing of the guard in the post-9/11 world leadership.
From an economic perspective, we can look forward to continued rapid growth in emerging Asian economies, including the population giants, China and India. However, caution will also be needed because of the uncertainties besetting the world's financial markets and economies. I refer in particular to the sub-prime mortgage problem and the corresponding adjustment of the U.S. housing market, as well as the continuing high crude oil prices from last year.
Two key events in 2008 will be the Beijing Olympic Games in China and the G8 Summit at Lake Toya in Japan. As host country, Japan will preside over a meeting at which global environmental policies for the post-Kyoto era are likely to be a key theme where Japan's leadership will be tested.
Portfolio Strategy to adopt to Globalization
As for Mitsui & Co., we expect to set another profit record in the year ending March 2008. While high commodity prices and generally buoyant economic conditions have contributed, I also feel these results are evidence that our sustained efforts over many years to build a "strategic business portfolio" are gradually starting to bear fruit.
The Medium-Term Management Outlook that we announced in May 2006 set out our business and financial vision to be implemented over a period of three to five years. 2008 is the year we will begin to turn this vision into reality. Through two years of concentrated effort to change our business models and mindset, we have made substantial progress toward the "optimization of our investment portfolio." We have expanded our activities in strategic segments and at the same time divested some major assets, such as Sesa Goa and Sakhalin II, as a result of a "recycling" initiative.
On the other hand, we need to absorb the dynamism of an increasingly diversified world economy. To do this, we will further adapt to globalization through strengthening locally focused business activities in three regional business units: the Americas, Europe, the Middle East and Africa, and Asia and the Pacific. The key to success will be our ability to draw out the full potential of our diverse human resources, and for this reason we are further improving our business infrastructure, including human resource development systems, to ensure that the Mitsui employees of various nationalities who carry out our business activities in these regions are able to grow further and assume positions of greater responsibility.
Therefore, I have decided to place a special emphasis on human resources this year. Our goal is to build a flexible and resilient corporate culture and business infrastructure that allow our talented people to respond to changes and achieve their full potential in growth areas.
Meeting the Challenge of Change and HR Strategy Initiatives
To respond successfully to change, we must continually review our corporate strategies when necessary and dynamically restructure our business portfolio. This will not be possible if our human resources remain static. There can be no progress without change, but sometimes change brings pain. Mitsui & Co. will stand firmly behind those who are willing to proactively meet the challenge of change by evolving as individuals and boldly striving to do "Yoi-Shigoto" (Good Quality Work) in new fields of activity. As a Sogo-Shosha, we have the flexibility and resilience to respond in an environment of accelerating changes. This gives us an extremely important advantage.
We will intensify our efforts to train and develop human resources with flexibility and resilience. We will also focus on proactively maximizing utilization of our diverse human resources so that we can achieve sustainable growth for Mitsui & Co. while enjoying enhanced opportunities for growth and fulfillment as individuals. I expect your efforts and cooperation in the spirit of our long-cherished ideal that "Mitsui is People."
"New Long-Term Management Vision"
We have started to formulate a new long-term management vision based on an overview of major world trends last year. Through this process, we will determine how Mitsui & Co. will try to position itself 10 years from now. In a world of constant changes which are occurring with unprecedented frequency and speed, it is becoming extremely difficult to forecast future trends, including shifts in the structure of industry. This makes it all the more important to apply our collective wisdom and imagination from a wide range of perspectives to assess how the world will change and to build a clearer picture of how Mitsui & Co. can continue to create "Yoi-Shigoto" 10 years into the future.
I will conclude by wishing each of you a bright, healthy and happy 2008. I look forward to a year in which we can all work, contribute and succeed to our full potential.