Introduction

Welcome everyone. I am pleased to be here in person today. I am grateful for your interest in Mitsui. I have been with the Company for eight years, but my connection began earlier at General Motors, when Mitsui supported our steel procurement. Later, I worked at Nissan Motor Australia and then joined Rio Tinto. I retired from Rio Tinto at age 66, then joined Mitsui’s Board. In Perth, I also chair The Perth Mint, the Royal Flying Doctor Service of Western Australia, am a director of the Church’s bank, a small touring theater company, and I am the head of the legal arm of my church. Mitsui remains the core part of my work, and I value the professional and open culture here as Mitsui is a company that listens and adapts. As an External Director, I focus on governance, strategy, and driving improvement. I look forward to your questions and hope to contribute meaningfully today.

Could you go over the discussions at the Board about the investment in Rhodes Ridge?

Rhodes Ridge is the largest investment we have ever made and required substantial Board discussion. We had numerous discussions in the early stages. Since it is a joint venture with Rio Tinto, where I was once CEO, I had some background knowledge and while maintaining confidentiality, I supported the team, especially with insights on mine planning, environmental concerns, and Aboriginal site protection.

I also had longstanding familiarity with the parties that sold their stake. I did not engage in negotiations but understood their motivations. We also worked through approvals—state and federal, including in relation to the Foreign Investment Review Board approval. I would report any kind of interaction to the Mitsui Board in the interest of transparency.

The project itself is long-life and high-quality and is essential to Rio Tinto. Rhodes Ridge helps them improve Pilbara Blend to restore premium pricing on 62% Fe content fines.

Did you see any negative points to Rhodes Ridge or potential challenges?

One of the challenges was ensuring that every detail was carefully addressed—minor issues, if overlooked, can undermine even a very good project. I advised the team to pay close attention to all aspects, even those that might initially seem minor. Environmental considerations are one such area—if not handled properly, they can lead to delays or even stop the project entirely.

Another critical point is securing the state agreement. Without the endorsement of the state government, projects can face prolonged delays or risk not moving forward at all. Engagement with government stakeholders and alignment with regulatory and policy frameworks are essential to ensuring long-term success.

I’d like to hear your thoughts on Mitsui’s green strategy and other green-related matters. Can green projects be profitable? How can they create value for shareholders?

Mitsui is firmly committed to environmental performance, with clear targets: halving GHG Impact by 2030 and net-zero emissions by 2050. For example, we are actively investing in wind, solar, and low-carbon ammonia, and we are studying plans to exit from our remaining thermal coal power plants. Climate change is real—it is not imaginary. Farmers in my home state, Western Australia, have had to change which crops they grow because conditions are getting hotter and drier.

We are not just setting targets—we are implementing real actions. When we announced our goals, I stressed they must be credible and actionable. Mitsui followed through, working closely with the Board on tangible steps. I believe that these projects can deliver both environmental benefits and solid financial returns. For example, our offshore wind power project in Taiwan has a solid business case. Each project is evaluated for commercial viability. Environmental impact is important, but so are shareholder returns. This approach reflects our broader mission: Realize a better tomorrow for earth and for people around the world, while ensuring sound investment decisions.

It seems as though a conglomerate discount is being applied to Mitsui’s stock price. What should Mitsui do to resolve this issue in the future?

You are right. If you valued all our assets at today’s prices, you could not buy them all for our current market capitalization—so there is a gap between intrinsic value and current market valuation. The Board and management have focused heavily on improving dividends. In the FY March 2025 financial results announcement, we disclosed the dividend will increase from 100 to 115 yen per share. Share repurchases, about 20% over the last decade, have also boosted earnings per share by reducing outstanding shares.

We are committed to progressive dividends and share repurchases when feasible, plus ongoing communication with shareholders. Under Mr. Hori, Mitsui has shifted toward a more balanced portfolio, investing in both non-cyclical and high-growth sectors, particularly in Asia. The IHH hospital investment is a good example.

One major evolution I support is Mitsui taking operating control of projects, and it is doing so, reflecting its strategic maturity and global standing as a trusted partner. The best way to ensure this is by managing projects directly, as we have with Waitsia gas. This operational role is vital for Mitsui’s success and the demands of governance and compliance.

From your perspective, what exactly are the strengths of trading houses compared to other global companies?

One of the key strengths of trading houses lies in their ability to take calculated risks and leverage deep market intelligence. Mitsui’s profitability now mainly comes from businesses we own, based on our deep market knowledge. Mitsui’s management is impressive, with capable middle and junior leaders empowered to add value. Another strength is our geographic diversity—operating in 62 countries and regions. This diversity strengthens our portfolio overall.

Could you please share your thoughts on term limits for External Directors? Do you believe that long tenure for External Directors could compromise their independence?

I personally am entering my ninth year as a director. I think it depends on the person. I am very outspoken and I raise points that are sensible and aligned with what the Company should be considering. I attend Board meetings monthly, and aside from exceptional cases such as Rhodes Ridge, I maintain a constructive distance from daily operations to preserve my independence, while remaining well-informed.

I sometimes ask management difficult questions, but I believe it is my duty to speak up. I have even opposed certain projects. Since we emphasize consensus, every director effectively holds veto power, so it is important to be logical and thoughtful when exercising that. In the past, when I believed some proposals were not right for us, I explained in detail my reasoning.

Decisions about tenure should balance experience and continuity with the need for fresh perspectives. Ultimately, the Board must assess whether directors continue to add value. I am proud of my time at Mitsui.

Other than in your case, have there been situations where a single Board member has rejected something? Is the Board aggressive enough? How would you make it better?

The projects that I have rejected were mining projects, so it was very much up my alley. But I have got to say, when I voiced my comments, other External Directors came in right behind me. They clearly understood the concerns I raised and they make their views very clear in discussions. We have a free discussion among all members of Board of Directors and Audit & Supervisory Board Members in which open dialogue is encouraged. This allows directors to provide input on areas where investment may not align with long-term priorities.

Have you changed anything at the Board level on how you deal with geopolitical risks and risk management capabilities?

Risk management is a key focus for the Board. We leverage insights from external agencies for intelligence on geopolitical risks and receive frequent briefings on specific situations worldwide. Operating in 62 countries and regions as a conglomerate with trading operations, market intelligence is vital to spotting opportunities amid global disruptions. Our government contacts, including METI and others, also provide important perspectives.

Risk is essential in business—not avoiding it but managing it. Excessive risk aversion can limit potential returns. Our approach emphasizes disciplined risk-taking supported by thorough analysis. Business is about taking well-managed risks. Risk analysis is always part of project presentations, with a dedicated page on risks and mitigation. The Board is deeply involved in understanding and managing risks.

Having a diversified portfolio and being in the first cost quartile for commodities are also crucial for risk management.

When you were appointed to Mitsui’s Board, it was not so diverse in terms of gender or nationality. Currently, the Board is very diverse. What has been the impact of this change?

Diversity is an essential component of effective governance in today’s globalized and complex business environment, and our Board is committed to adopting best practices from various countries. We have directors from Canada, Singapore, Australia and Japan, and many internal directors have worked internationally, bringing diverse views and experiences. This diversity enriches discussions—Board members focus on different aspects such as business cases, health and safety, environmental performance, and governance.

We are particularly focused on increasing female managers. When management first set a 20% target for female managers by 2030, the non-executive directors almost unanimously commented whether we cannot accelerate achieving the target. We were below 10% at that moment but within about a year and a half, we reached around 12%, and are now strongly pursuing the 20% target, though we recognize that further progress is necessary to achieve meaningful gender balance. Diversity on the Board is vital because we cannot afford to overlook the knowledge and abilities of half the population.

Over your eight years with Mitsui, what has changed the most? Also, in which areas do you still believe Mitsui can improve itself?

With Lean Six Sigma, a tool I have used for many years, everything that has variance can be improved. Over the last eight years, the Board has changed significantly, and the total number of directors has been reduced to 12, half of which are external. This has led to more robust discussions. We now have four female directors, bringing fresh perspectives and value through their diverse experiences, such as Sarah L. Casanova, bringing expertise from global consumer and logistics sectors. Other directors contribute according to their backgrounds in areas such as digital, political, and manufacturing fields.

The Board of Directors emphasizes unanimous decision-making and engages in repeated discussions. This is also true for investments, loans, and guarantees of over 60 billion yen. The Board reviews projects annually to ensure alignment with strategy and medium-term plans. We also review less profitable projects regularly, focusing on turnarounds or divestments, though divestments can be complex due to partners or market conditions.

Greater attention is now being paid to health and safety, and as a company, we have developed a stronger awareness for improvement and a deep commitment to well-being. Environmental issues also receive significant attention, with the Board tracking progress on targets.

The world is very uncertain today, but management is highly focused on responding and adapting. Mitsui operates in 62 countries and regions as a true conglomerate beyond traditional trading functions. Mitsui has been steadily improving the quality of its business portfolio. Today, the Company has achieved a more balanced mix across different sectors, reducing reliance on any single area.

Have there been frustrations or challenges during your time at Mitsui?

Language was initially briefly a challenge, but with professional support, I am fully engaged in Board discussions. The Board operates by consensus, and the chair handles things fairly.

One ongoing challenge is the share price, which you are all helping with. Finding new growth opportunities is critical. Mitsui focuses on long-term investments while also balancing the portfolio with opportunities that offer more immediate returns. However, truly valuable opportunities do not arise every day. The Board pushes management to explore these, especially in areas such as climate change, where we have significantly expanded our focus on renewables, now targeting 30% renewable energy by 2030. But as a director, I do not see all opportunities worldwide and rely on management to keep finding growth avenues, which is vital for us and shareholders.

Trading companies are complex and require a lot of work to understand properly. So of all the companies out there, why is this the one that you are on the Board of?

I think it is the diversity and international nature of Mitsui that draws me. I had a long-standing connection with the Company before joining. Since joining, I have valued the Board’s commitment to continuous improvement. Now, every External Director actively participates, focusing on key issues with thorough preparation.

I always attend meetings in person to set the tone and ensure high-level, focused discussions. Directors clearly state support or rejection of projects, making it an engaged and effective Board. Sometimes I wonder if we push management too hard, but they always come back ready for the next meeting.

Closing remarks

Thank you all for your great questions. I am glad to be here and appreciate your interest in Mitsui. As an External Director, it is valuable to speak directly with stakeholders. Mitsui values transparency and engagement, providing clear projections on earnings and dividends, which we take seriously. Our communication is based on thorough analysis, not guesswork. Whether external or non-external, open dialogue and transparency are key for us. Thank you again for your time today.

Integrated Report 2025 TOP