We would like to inform you of the following “2024 New Year's Greetings” for all Kanematsu Group employees, which was held online on January 4th by our president, Yoshiya Miyabe.
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Good morning to everyone with Kanematsu and the Kanematsu Group.
I hope everyone had a wonderful holiday as we did not need to worry about COVID restrictions.
Powerful earthquake hit the Noto Peninsula on New Year’s Day, and a major plane collision occurred at Haneda Airport the following day. These incidents made me realize once again that disasters happen without any warning and crisis management is important. I extend my deepest condolences and heartfelt sympathies to all those affected by the disaster and accident and hope for the earliest possible restoration and recovery. I also would like to contemplate the actions we can undertake to contribute to the recovery efforts.
Looking Back on 2023
Let us first look back on 2023.
The most memorable moment to me was Japan’s World Baseball Classic victory in March. Japan pulled off a comeback walk-off victory over Mexico in the semifinals and won a close game against USA with a final score of 3-2 in the finals, winning the tournament. When we look at each player’s performance, the US team had an overwhelming advantage over the Japan team, but Japan was able to secure a victory with the strategies and teamwork that are strengths of Japan. The speech Shohei Ohtani gave before the final game still plays in my head: “For today only, let’s throw away our admiration for the major league players and just think about winning.”
Teamwork and strategy are also important in business. Japan’s success in the WBC made me realize anew that we can never win without strong determination.
In terms of weather, Japan experienced a record heat wave.
In addition to the scorching summer heat, some parts of Japan experienced summer temperatures even in November and December. 2023 was full of unprecedented events.
We are expecting another sweltering summer this year, and it is likely that movement toward carbon neutrality and negativity, both of which are goals that Kanematsu aims to achieve, will further accelerate.
In terms of the economy, Japan’s Nikkei Stock Average rose above 33,000 yen in June for the first time in 33 years and is still advancing steadily. On the other hand, the Japanese currency weakened in 2023. The yen was around 130 against the dollar in January but fell past 150 in November. It is said that the Japanese yen will strengthen in 2024 as the Federal Reserve may cut interest rates and the Bank of Japan may end its negative interest rate policy. The exchange rate is one of the factors that affect our business and is something I would like to keep an eye on.
Kanematsu renewed its website on December 1 to enrich the content on pages that disclose information related to sustainability and to introduce the Group’s businesses.
We will actively share information through our website and the media to enable our stakeholders, including our employees, to learn more about Kanematsu. By doing so, we hope to gain more fans of the company.
With regard to digital transformation, the DAISY system was launched on December 11. This system has allowed us to eliminate paper-dependent processes and digitize all of our accounting processes. DAISY is equipped with AI technology that can scan and digitize documentary evidence such as bills and invoices. I’m sure most of you have already used this system. This system is meaningful as it completely digitizes the accounting processes, and it can be said that Kanematsu has taken its first step as a digital trading company, moving toward digital transformation in the field of accounting.
Our next goal is to deploy the system across the Group in the same way as FESTA, and have it become a foundation for digital transformation in the accounting field.
This concludes my summary of 2023. Next, I would like to talk about the renewed employee performance evaluation methods, corporate philosophy promotion project, future 135, office award, and our next medium-term business plan.
Renewed Employee Performance Evaluation Methods
It has officially been decided to renew our employee performance evaluation methods in this April. The new methods and the next mid-term plan will start at the same time. The concept is the strategic creation of challenges.
For the company to achieve growth, it is necessary to take a different path than other companies. There will be failures, and we will have to go through a process of trial and error. However, it is important to cultivate a corporate culture of taking on new challenges without being afraid of making mistakes. Tackling challenges leads to the company’s unique growth and creation of innovation.
Expanding existing businesses and taking on new challenges are both indispensable for growth, and human capital and human resources are sources for achieving both. It is important that each unique member of our company understands their role and demonstrates their appropriate ability for the role. In order for this to happen, we need each employee to have independent mind.
The new methods allow us to assess the challenges our employees take on and make sure that we reflect their contribution in their pay so that we can create a corporate culture that encourages employees to take on new challenges.
We also incorporated other new methods such as the 360-degree feedback for manager level employees.
The new methods are not complete only upon introduction. We will consider further revisions if an issue arises. I hope everyone works together and uses the new methods appropriately for their own growth and the company’s growth.
Corporate Philosophy Promotion Project
With regard to the corporate culture of taking on new challenges, which I mentioned earlier, we will launch a project to promote our corporate philosophy in April.
This project aims to achieve a deeper understanding of Kanematsu’s corporate philosophy among our employees so that we can foster a corporate climate where individuals and organizations can enjoy evolving constantly.
Preparation toward full-scale operation is already underway, mainly by the project members. We plan to continue sharing information about the progress of the project going forward.
The most important key success factor for this project is for everyone to have interest in the project and take action. I ask for your active participation.
future135, Office Award
The current mid-term vision, future135 will end in three months.
future135 was developed to accelerate growth speed with the aid of investment and has been pushed forward under the concepts of expansion of scale, acquisition of added value, and quality improvement. As a result, the number of business investments made in the past six years grew significantly. Some of these have already contributed to the increase in consolidated earnings. We have also made several investments in innovation towards creating businesses in the future.
In addition, we are investing in human resources through future management training and Kanematsu University, as well as working to improve Engagement Survey (ES). As part of our efforts, we relocated our head office and are working to create an environment that enables diversification of workstyles.
The new office received the Ministry of Economy, Trade and Industry Award at the Nikkei New Office Awards in September 2023 and won the best Asia winner in the office design category of Office Design Over 2,000 SqM at the SBID International Design Awards 2023 (UK) in November. I believe that we have achieved some positive results in quality enhancement along with our quantitative targets.
Next Medium-Term Business Plan
The next three-year medium-term business plan will start from the next term. The concept of the plan is to take advantage of the Group’s strengths to the fullest and aim for high-quality and sustainable growth.
Kanematsu Group’s strengths include trade with companies from a wide range of business areas, high digital literacy, and advanced actions taken both against climate change and for SDGs. In the next mid-term plan, we aim to pursue creation of synergy as a Group, which is based on the relationship of trust we have built with our partners and clients through trade in a wide range of business areas, detailed information on businesses, and sharing and accumulation of expertise.
In addition, we have ICT, knowledge in digital technology, and solution functions within our Group, specifically, Kanematsu Electronics. The framework of our growth strategy is to work together with our partners and clients to promote digitalization of businesses and human resources and to accelerate our growth as a digital trading company that goes beyond business areas. The target profit of this term is 23.5 billion yen. We will focus on the collaboration with Kanematsu Electronics as one of the pillars of our growth strategy, and in the final fiscal year of the next business plan, which is the fiscal year ending in March 2027, we would like to further increase our profit and reach a new stage.
With such a viewpoint, we have asked each of our offices, Group companies, and overseas offices to create first drafts of the quantitative profit plan and qualitative growth strategy for the next mid-term plan.
I am very grateful that each company and organization gave serious thought in the first draft about the growth strategy aimed toward the larger goal. Unlike the conventional buildup approach to creating the plan, we are likely able to establish major numerical targets. We plan to thoroughly examine the figures and incorporate them in the strategy in hopes of disclosing them to the public at the end of the fiscal year.
I hope that all of us at the Kanematsu Group will work together based on the growth strategy to become the organization we want to be.
In Conclusion
This is the last fiscal year of future135. The next fiscal year will be a major milestone for our Group, with both the next medium-term business plan and the renewed employee performance evaluation methods beginning in April.
Let’s make the final push in the next three months to achieve the goals of this term so that we can make a good start in April.
Finally, I would like to conclude my New Year's greetings by wishing for the health and success of all of you with the Kanematsu Group in Japan and around the world, as well as your supportive families.
President Yoshiya Miyabe
Kanematsu Corporation