Introduction
The Shosha have always reorganized and expanded their roles and theservices they offer, to adapt with the change of the times. For this reason, mostpeople, especially non-Japanese, probably find it difficult to understand exactly
what the Shosha do. Even people who have worked at Shosha for many years
likely have problems explaining them to others in a succinct, easily
understandable manner.
We prepared this Handbook with a view to helping as many people aspossible to understand the frequently complex activities in which the Shosha are
involved.
Chapter 1 explains the essence of the Shosha and their strengths, andsummarizes how their recent business model is based on two cornerstones -trading and business investments.
Chapter 2 examines the role that the Shosha play in the global economy, andthe value they contribute to society. It goes on to explain how they support the
lives of people around the world from seven perspectives.
Chapter 3 provides a simple overview of Shosha's CSR activities.
Chapter 4 introduces the activities of Japan Foreign Trade Council, Inc.
(JFTC), which marked the 70th anniversary in 2017.
We hope this Handbook will provide as many readers as possible with adeeper understanding of the activities, business and projects in which the Shosha
engage.


02 Shosha Handbook 2019

July 2019

Contents

Introduction… …………………………………………………………………………………………………… 02
Chapter 1: What Are the Shosha?
1. The Strengths of the Shosha
What Are the Shosha? … ……………………………………………………………………………
（1）
Using a Variety of Functions to Create Businesses…………………………………………
（2）
Extensive Range of Assorted Products and Business Sectors…………………………
（3）
Global Networks…………………………………………………………………………………………
（4）
The Continuously Evolving Functions of the Shosha… ……………………………………
（5）
Why Shosha? — Ability to Make Proposals to Meet Wide-ranging Needs —………………………
（6）
Column ①

04
05
06
07
08
09

How the Shosha Overcame a Variety of Crises… ………………………………………………… 10

2. The Shosha's Business Model
Trade and Business Investment Are the Two Cornerstones… ………………………… 11（1）
Features of Shosha's Business Investments… ……………………………………………… 12（2）
The Shosha's Value Chain Strategy……………………………………………………………… 13（3）
Column ②
Column ③

Catchphrases That Summarize Shosha's Activities… ………………………………………… 14
Shosha's Characters and Kids' Websites… ………………………………………………………… 14

Chapter 2: The Shosha Are Active Worldwide
1. Working to Resolve Global Social Problems………………………………………………… 15
2. The Roles of the Shosha
Stable Supplies of Resources and Energy (Energy)… ………………………………………
（1）
  Stable Supplies of Resources and Energy (Metal Resources)… ……………………………
Stable and Secure Supplies of Safe Food… …………………………………………………
（2）
Achieving a Sustainable Society… ………………………………………………………………
（3）
Establishing Social Infrastructures in Japan and Overseas………………………………
（4）
Leading Global Expansion… ………………………………………………………………………
（5）
Supporting More Comfortable Lifestyles… ……………………………………………………
（6）
Preparing for the Aging Society……………………………………………………………………
（7）
Column ④

16
18
20
22
24
26
28
30

Why Did Japan's Sogo Shosha Become Integrated?… ………………………………………… 32

Chapter 3: The Shosha's CSR Activities
1. The Shosha's CSR Activities… …………………………………………………………………… 33
2. Action for a Better International Community (ABIC) … …………………………… 34
Column ⑤

Heritage of Industrial Modernization and the Shosha……………………………………………… 35

Chapter 4: The Activities of Japan Foreign Trade Council, Inc. (JFTC)……… 36
Attached Table: The World Economy and Trade
Shosha's Corporate Code of Conduct
Shosha Handbook 2019 03

1

Chapter 1 What Are the Shosha? ～The Strengths of the Shosha～

What Are the Shosha?
（1）"The Shosha have developed a uniquely Japanese business model*." Japan has always been poorin natural resources and, as part of its drive to become a trading nation in the days of postwar
reconstruction, the Shosha played a major role in developing the Japanese economy by proactively

advancing overseas and expanding their global networks as linchpins of the export/import trade.
* Comment by Professor Ryuji YASUDA, Graduate School of International Corporate Strategy, Hitotsubashi University, during
the symposium on The Front Line of the Shosha Business sponsored by JFTC.

The main features of the activities of the Shosha today are as follows.
①They quickly identify, and attempt to anticipate, customers' ever-diversifying needs as theychange with the times, expanding their roles and functions on their own initiative, whileconstantly and flexibly altering and expanding their business portfolios (See Chapter 1.1-(2)) .
②The Shosha handle products in a wide range of business sectors that are said to cover
everything "from mineral water to communications satellites (see Column ②)." Their businessdomains extend from upstream to downstream sectors, from the development andprocurement of raw materials, to manufacturing and processing, logistics, sales and services.
They contribute at each stage by enhancing value-added (See Chapter 1.1-(3)).
③The Shosha operate worldwide, making business investments on a global scale. By building
numerous value chains (see Chapter 1.2-(3)), they contribute to creating richer lives for people
through satisfying their varied needs in countries and regions around the world (See Chapter
1.1-(4)).

Extensive Rangeof Assorted
Products andBusiness Sectors

Variety offunctionsGlobalnetworks
Problemsolving
Valuecreation

Change Provides 0pportunities
04 Shosha Handbook 2019

1（2）
-

Function

Using a Variety of Functions
to Create Businesses

The Shosha make use of various functions to create many types of business.
These functions are constantly becoming more sophisticated in response to changing times andenvironments.

Explanation

BusinessCore functions that promote global tradetransactions
Information Collect and analyze extensive, wide-ranging
and research information for use in business
Analyze supply and demand trends, andMarketdevelopment open up global markets

BusinessStrengthen business development &development and promotion, and group management
management
Risk
Minimize business risk
management
Logistics

Aspire to optimum overall logistics

Finance

Provide financial functions that are uniqueto Shosha, and develop leasing business

Organizer

Combine functions organically to develop
projects
Shosha Handbook 2019 05

1（3）Chapter 1 What Are the Shosha? ～The Strengths of the Shosha～

Extensive Range of Assorted
Products and Business Sectors
Involvement in a Wide Range of Business Sectors-

Machinery,transportationequipment,
infrastructure▪ Construction machinery, machine tools, agricultural machinery, mining machinery▪ Power generation, water supply & sewerage systems, ports,
cargo handling facilities▪ Solar, wind & geothermal power generation▪ Automobiles & auto parts, railways, ships, aircraft

Energy,metals,chemicals▪ Coal, iron ore▪ Iron & steel products, steel service centers▪ Copper, aluminum, nickel, rare metals▪ Precious metals (dealing)▪ Oil, LNG, LPG, petroleum products, alternative energy sources▪ Petrochemicals, inorganic & fine chemicals, synthetic resins, electronics materials,
fertilizers & agrochemicals, pharmaceuticals, and biochemicals

Consumergoods▪ Textiles (raw materials, products, materials, apparel, branded goods)▪ Lumber & construction materials, paper & pulp, chippings, leather, ceramics, tires,rubber products, interior goods and household sundries▪ Grains, raw sugar, marine & livestock products, fruit & vegetables, oils & fats,
beverage ingredients▪ Alcoholic beverages, canned goods, dairy products and other processed foods▪ Pharmaceuticals, drugstores, health-related products, hospitals, and facilities for theelderly▪ Convenience stores & supermarkets

Information,
construction
and real estate,finance,logistics▪ Information & communications, CATV, TV shopping▪ IT, BPO services▪ Industrial parks▪ Leasing (automobiles, railway rolling stock, aircraft, etc.)▪ Comprehensive regional development, housing (development, construction,
sales & management), commercial facilities, office buildings (construction,
facilities management, leasing, distribution)

Huge Industrial Groupings
Companies that create companies: Establishing business corporations, entering new sectors through acquisitions of existing companies

5,000/400,000

In Japan Approx.
andoverseascompanies

employees

Consolidated companies/employees of seven Shosha* (incl. employees of parent companies: 30,000)* Seven Shosha: ITOCHU Corporation, Marubeni Corporation, Mitsubishi Corporation, Mitsui & Co., Ltd., Sojitz Corporation, Sumitomo Corporation,
		Toyota Tsusho Corporation (The same applies hereinafter.)
Note: Derived from the seven Shosha’s Annual Securities Reports 2018.

06 Shosha Handbook 2019

1（4）226 26-

Global Networks

No. ofdomestic &overseas
locationscities overseas

Business locations of theseven Shosha (excluding
overlaps)

cities in Japan(Reference: The number of Japanese Embassies, Consulates and Permanent
Missions totaled 226 as of January 2019)

Opening up the World's Frontiers
Europe, Russia, CIS

East Asia*

35

36

North America

43
Middle East

Latin America

2227

AfricaAsia & Oceania

17

46

Numberof businesslocations2018* East Asia: China, Hong Kong, Taiwan, Korea, Mongolia
Note: Number of cities in which the seven Shosha have established business locations derived from Annual Reports (Integrated Reports) 2018, websites and othersources (this number differs from the numbers disclosed by individual companies).

Shosha Handbook 2019 07

1（5）Chapter 1 What Are the Shosha? ～The Strengths of the Shosha～

The Continuously Evolving Functionsof the Shosha-

Amidst the constantly changing external environment, the Shosha have always adopted a
flexible, autonomous approach to evolving and expanding their roles and the services they offer,
while anticipating and identifying the current needs of industry and society.
As discussed in Column ① below, the Shosha have faced doubts about their future, such as
when people talked about "The Decline of the Shosha," or "The winter years of the Shosha." Fortheir part, the Shosha took a positive attitude and repeatedly reformed themselves.
We believe this ability to respond to change is in itself the greatest strength that the Shosha
possess.

The Evolution of the Roles and Functions of the Shosha
1945

1950

1960

1970

Postwarrecovery

Rapid economic growth

Tradingnation

Massconsumption

1980
Stable growth
Resource &energyconservation

Historical background▶World War II ends (1945)▶Private foreign trade resumes (1947)

1990

2000

Bubbleeconomy

2010

Post-bubble
Globalization

Transition towards aservice-/softwarebased economy

Collapse of
the bubble
economyIncreasingly
borderless world
Sustainable growth▶Collapse of
LehmanBrothers
triggers theGreat
Financial
Crisis (GFC)(2008)▶Floating exchange rate system
introduced (1973)▶First Oil Crisis (1973)▶Fixed exchange rate (1949)▶Korean War (1950)▶Second Oil Crisis (1979)▶Plaza Accord (1985)▶Export promotion measures (1952)▶Berlin Wall comes
down (1989)▶Shosha authorized to hold limited
foreign exchange open positions (1956)▶Nixon Shock (1971)▶Boom triggeredby the Plan for Remodeling
the Japanese Archipelago (1972)▶Europeansovereigndebt crisis▶Earth Summit (1992) (2010)▶Asiancurrency crisis (1997)▶9.11 terrorist
attacks (2001)▶China joins theWTO (2001)"Almighty
Shosha"debateShosha's roles and functions

Import/export offoods, textiles andlight industry
products
Earn foreign currencies"The Decline of
the Shosha"
debateImport raw materials
Introduce foreigntechnology
Export manufactured
products(ex. heavy &chemicals industries(iron & steel,shipbuilding, plant,
petrochemicals,etc.))"WickedShosha"debate"The winter yearsof the Shosha"

Resources & energy◦Development◦Procurement◦Preparations foralternative energy
sources

Debate over whether
the IT revolution willsideline the Shosha

Supportoverseas
expansion
Promoteimports
Promotecommercialization
Developdomestic
demandEmerging
economies/
resources boom

Respond to
globalization andthe information
revolution
Build up logistics
and supply
chainsRespond to
global environmental problems

Improveinfrastructure
in Japan andoverseas
Realize more
comfortable
lifestyles
Prepare for the
aging society◦Marketdevelopment

Business transaction functions
Logistics functions
Foreign technology introduction and market
development functions
Financial functions (Shosha finance)◦Business

Risk management &finance functions
Organizational
functionsmanagement
Investment &financialinformation◦Risk

management

Upgrade theabove

08 Shosha Handbook 2019

Upgradeinvestment &finance,logistics,
information,marketingfunctions,and riskmanagement
methods

Value chain
andintegrator
functionsthat makeuse ofother
functions1（6）-Wh y Shosha?

—Ability to Make Proposals to Meet Wide-ranging Needs —Extensive knowledge of global markets

Strong teams of in-house experts(taxation, accounting, finance, legal matters, risk management)

Expert at pioneering new businesses and markets

Ample financial resources

The Shosha develop businesses by managing them themselves

Ability and clear mission to respond to customers' needs
by providing solutions to all their problems

Cost Savings Achieved Through the Use of
Trading Companies and Wholesalers■Most of the cost was saved ■A significant portion of the cost was saved■Little of the cost was saved
Cost of gathering information on
local laws, regulations andbusiness

131

Cost of marketing activities,
including local sales promotion

115

115

120

91

130

103

86

Cost of establishing local sales
and after service bases

96

Cost of exporting products

116

72

Cost of after-service for products
0

77

130

120
50

100

121
150

200

250

300

350

400
（Company）

Source: Prepared by JFTC based on the White Paper on International Economy and Trade 2016 published by METI

Shosha Handbook 2019 09

Column

Although the Shosha have been key drivers of Japan's postwar

Column

How the Shosha Overcame growth, they have certainly not enjoyed smooth sailing at all times.
As they faced multiple difficulties in the process, they responded toa Variety of Crises theneeds of the times by flexibly evolving their functions.

1960s

yen against the dollar that followed the Oil Crisis eroded Shosha
profits, ushering in what was known as "The winter years of the
Shosha." Weaker Shosha profits were attributed to four factors: ①
the Shosha were slow to react to change in Japan's industrial
structure as it made the transition from large smokestack industries
to lighter, more compact knowledge-intensive industries; ②growing
exchange and country risk; ③manufacturers' growing disengagementfrom Shosha; and ④increasingly bloated in-house organizations.
The Shosha survived the winter years of the Shosha by taking amore defensive stance. To overcome these problems, they adopted
measures to improve management, including steps to reduce theirinterest burdens by diversifying their funding methods andpreventing bad debts through more rigorous risk management.
They also became more proactive towards exports to the oilproducing nations, which had begun to play a much greater role in
the global economy following the oil crisis, and towards overseas
investment and entry into new business sectors.

1"The Decline of the Shosha" debate
The first indication of doubts in the future of the Shosha came in
the form of an article on "The Decline of the Shosha*1." Since trade
was the mainstay business of the Shosha, the argument went,
their services would no longer be needed if manufacturers became
large enough to establish their own sales networks. In reality,
however, Japan was in the midst of its rapid growth era, leading toa situation where the manufacturers needed the Shosha more thanever because of their skills in procuring the necessary raw
materials and introducing first-class technology from overseas.
The manufacturers and the Shosha also worked together todevelop export markets and steadily expand their businesses.
Several factors were behind the rapid advance of the Shosha. The
debate over the decline of the Shosha not only provided them with
an opportunity to strengthen their corporate structures, but also
encouraged them to formulate long-term strategies that included
diversifying their operations.

Around the time of the Oil Crisis

Criticism of the Shosha and the theory
that they were no longer neededSocial criticism of the Shosha mounted from the second half of1971 through 1975, when the Japanese economy faced disruptions
caused by rapid price increases. The Shosha were seen as the
ringleaders behind runaway inflation because they were accusedof hoarding and withholding goods from sale. Japan's Fair Trade
Commission carried out investigations, while the top managementof the larger Shosha were summoned to testify before the Diet
(Japan's parliament). This alerted the Shosha to the impact that
their own activities had on society and to the magnitude of theirsocial responsibilities. As a result, they drew up Sogo-Shosha's
Code of Conduct*2, which declared that the entire sector would
henceforth act in a spirit of self-restraint.

Second half of the 1970s through the first halfof the 1980s"The winter years of the Shosha"

1990s

The "collapsing Shosha" debate andthe theory that the IT revolution would
eliminate the need for the Shosha
The after effects of the collapse of the bubble economy and the
Asian currency crisis presented the Shosha with an unprecedented
management problem in the latter half of the 1990s, prompting
business magazines to put out numerous special editions on thecollapse of the Shosha. This led to a sectoral restructuring
whereby the Shosha sought to get back on their feet again byfocusing on their core competences, liquidating their unprofitablebusinesses, and writing off their problem loans. Other observers
wondered whether the IT revolution would render the intermediaryfunction of the Shosha unnecessary. Against this background, theShosha saw business investment as a new way out of theirdifficulties, proactively expanding their resource and energy
sectors, and their businesses in emerging economies such as
China. They also channeled more effort into their downstream
businesses in Japan. Making greater use of IT in the logistics
sector, they moved ahead with supply chain management
initiatives designed to enhance their customers' production andsales activities.

The global economic stagnation and ongoing appreciation of the*1 In 1961, Japan's The Weekly Economist magazine published a report entitled Are Japan's Shosha in Decline?
*2 Formulated on May 10, 1973, revised as Shosha's Corporate Code of Conduct on July 8, 1999, and revised again on June 16, 2005 and on March 22, 2018.
See Page 42 for details.
Reference materials: Seminar: Nihon no Sogo Shosha (Second edition) (Ed. Research Division, ITOCHU Corporation, Pub. Toyo Keizai Shimposha)
Sogo Shosha no Kenkyu -- Sono Genryu, Seiritsu, Tenkai (Takayuki TANAKA, Pub. Toyo Keizai Shimposha)

10 Shosha Handbook 2019

2（1）Chapter 1 What Are the Shosha? ～The Shosha's Business Model～

Trade and Business Investment
Are the Two Cornerstones-

Toyota Steel Center (Japan)
Photo courtesy of
Toyota Tsusho Corporation

The Shosha have two sources of revenues: traditional trading, and their rapidly growing
investment activities. Their business portfolios are thus based on two cornerstones, trade andbusiness investment.
Their basic business model for trade consists of utilizing global information, logistical networks,
and financial resources to seek buyers and sellers on behalf of their customers, and earning
commissions on linking them together.
In contrast, the business investments made by Shosha have various objectives. Unlike
investment banks and funds, they seek neither capital gains on future sales of the businesses
involved nor dividend receipts from the outset. Instead, they engage in long-term ownership tofoster the businesses themselves in the hope of expanding trade or finding synergies with otherbusinesses under their ownership. In addition to acting as sole investors, they seek strong partners
to make joint investments with a view to securing knowhow in new sectors. Both cases arecharacterized by relatively long-term strategic investments and a deep involvement in managing
the targets of the investments, or 'investees.'
Shosha revenue structures are transitioning from a focus on commissions arising fromconventional trading towards the wide-ranging revenue opportunities obtainable from the
manufacturing and service businesses in which investments have been made, as well from theoverall activities of the group, including subsidiaries (→ The Shosha's Value Chain Strategy).

Differences Between the Trade and Business Investment Businesses
Trade businessBusiness investment

Blast furnaces (manufacture)

Blast furnaces (manufacture)
Intermediary salesof iron & steel
products(trade)Intermediary salesof iron & steel
products(trade)Coil Center (business investment)*Process products in line with customer needs

Involvement in
the manufacturing
process

Customers

Sales that enhancevalue-added

Customers(manufacturers of consumer
electronics, automobiles, etc.)(manufacturers of consumer
electronics, automobiles, etc.)

Shosha revenues(commissions)

Shosha revenues(commissions + labor charges,
dividend receipts from the business)

Shosha Handbook 2019 112（2）Chapter 1 What Are the Shosha? ～The Shosha's Business Model～-

Features of Shosha's
Business Investments
The features of Shosha's business investments can be summarized as follows:
They cover a wide spectrum of businesses from upstream to downstream
sectors.

They utilize the Shosha's overall capabilities based on typical functions such as
capital, managerial and organizational strengths to advance into hitherto
unfamiliar business domains. The Shosha did not have the diversified functions
they possess today from the outset. Instead, they have acquired them throughbusinesses with partners in various specialist sectors, and in many respects theinvestment experiences they have had with their partners around the world
have enhanced their overall capabilities.
While dividends and equity gains are the basis of the returns that Shosha derivefrom their business investments, they also earn commissions on trading in raw
materials, profit margins on purchases and sales of facilities, and advisory fees.
They do not see business success or failure in terms of whether a single
investment deal is profitable or not. There are cases where they earn profits byengaging in similar investments in similar schemes with other companies, anddeploy this approach to other countries and regions.
Unlike investment banks and funds that aim for short-term capital gains, they
make strategic investments based on long-term ownership.

Business opportunities can be found anywhere invalue chain, from upstream down through midstream
to downstream
Teaming up with partners who have regional or
sectoral expertise, they share risk while enhancing
their knowledge as they venture into areas where they
have no experience.
Shosha make use of their overall capabilities, which
include providing finance and management support,
risk-taking and management functions, and trading
and organizational functions
Returns range from dividends and equity gains tocapital gains and fee revenues

They make strategic (extensive) investments that focus
more on long-term holdings rather than short-term
capital gains

12 Shosha Handbook 2019

2

The Shosha's Value Chain Strategy（3）

A value chain is a series of activities in which companies engage in order to deliver value tocustomers. Understanding a value chain is very important when it comes to understanding the
Shosha. A value chain comprises initiatives that aim for higher returns by raising value-added andlinking it to various businesses based on the knowledge and information that Shosha gain throughtheir engagement in widely-ranging, upstream through downstream sectors. This covers everythingfrom developing and procuring materials, to manufacturing, processing, sales and services.
Take steel for example:
1) The Shosha invest in ownership rights in mines in order to develop the coal and iron ore thatare essential for steel manufacture. They also invest in ways of supplying the mined raw
materials to iron & steel manufacturers, and even in steel businesses themselves.
2) In addition to buying in steel products from steel manufacturers and selling them tomanufacturers of railway rolling stock and automobiles, and shipbuilders, they add value by
processing these products to specifications that customers find easier to use, and through theirinvolvement in manufacturing automobile parts.
3) Their involvement in businesses relating to end products extends from auto sales and leasing,to sales and operations of ships, as well as sales of gasoline for vehicles and fuels for aircraft
and ships.
This participation in mutually-related businesses in upstream through downstream sectors gives
them a birds-eye view of the overall business processes involved, enabling them to offer financial,information and logistical functions as necessary. This, in turn, helps them enhance customer
convenience and aspire to higher value-added business. It also explains why value-chains are
significant for the Shosha, and why they are building value chains in various sectors, including
energy development, foods and textiles.

The Steel Value Chain
MineownershiprightsProcure raw
materials

Manufacture

Processing,
distribution
and sales

End user

MiningCoal andiron oreBlast
furnaces,
Electric
furnaces

Coil centers,
Partsmanufacturing

Consumerelectronics,
Automobilemanufacturers

Rights holdings
Businessmanagement

Rights holdings
Businessmanagement

Iron ore mining business (Brazil)
Photo courtesy of ITOCHU Corporation

Businessmanagement

Ferrocoke pilot facility reduces CO2
emissions and conserves energy (Japan)

Steel Service Center (Mexico)
Photo courtesy of Sumitomo Corporation

Photo courtesy of JFE Shoji Trade Corporation

Shosha Handbook 2019 13

Column

ColumnThat
2 Catchphrases
Summarize Shosha's Activities
Resin raw materials
Photo courtesy of Inabata & Co., Ltd.

Leisure facilities
Photo courtesy of Hanwa Co., Ltd.

The catchphrases used to describe the Shosha's activities havechanged with the times.
Today, "from mineral water to communications satellites" isoften used. At the beginning of the 20th century, the slogan was"from bird feed to warships," but this changed to "from ramen*1
to missiles." Following complaints that "missiles" were not goodfor the corporate image, however, "rockets" or "aircraft" wereadopted instead and used proactively.
The idea was to use a simple expression that conveyed the ideathat the Shosha handle a very wide range of products, from thesmallest to the largest. However, the message that the Shosha
handled every conceivable product unfortunately conveyed thenegative impression that they were suspicious mega corporations.
We believe this was one reason for the criticism of the Shosha*2that occurred in the 1970s (Column①).

*1 Sales of Nissin Foods' Chicken Ramen started in August 1958. The packs weighed 85g and the retail price was ¥35.
*2 Oil prices rocketed when the Fourth Arab-Israeli War broke out in 1973. The mass media and consumer groups accused the Shosha of causing the jump in prices for
petroleum products and general consumer goods by hoarding and withholding goods from sale. The top management of the larger Shosha were summoned to testify
before the Diet (Japan's parliament) as part of its intensive investigations into price rises.

ColumnCharacters and3 Shosha's
Kids' Websites

Mitsui & Co., Ltd.:

Learning from the Forests

https://www.mitsui.com/jp/ja/morikids/

The Shosha have worked out ways to provide simple
explanations of their involvement in our daily lives through theirwebsites. They use characters and sites created for children toenhance understanding of their activities and make them morefamiliar, as shown below.

Characters and sites created for children

Learning from the Forests

ITOCHU Corporation:"Itoh Chuta no
daibouken"

JFTC:

JFTC Kids Site

https://www.itochu.co.jp/
ja/kids/index.html

https://www.jftc.or.jp/kids/

Itoh Chuta
Shoma & Osho
Chori Co., Ltd.:CHORI-KUN

Othershttps://www.chori.co.jp/
chorikun.html

Kowa Company, Ltd.:

Kowa Kero-Koro Landhttps://kr2.kowa.co.jp/

CHORI-KUN

Sojitz Corporation:

More about Sojitz

https://www.sojitz.com/en/special/

14 Shosha Handbook 2019

1

Chapter 2 The Shosha Are Active Worldwide ～Working to Resolve Global Social Problems～

Working to Resolve
Global Social Problems
Whatever the era, the Shosha have continued to respond to the needs of the times by carefully
considering the functions and roles they should fulfill to meet the needs of the ever-changing
environment. The same goes for the world today. The Shosha contribute to society and support the
lives of the people of the world through the various initiatives outlined below.
In 2015, the United Nations led the way in formulating Sustainable Development Goals (SDGs),
which list the common social problems facing the world that we must resolve on a priority basisby 2030. It called on companies to contribute to achieving these goals through their businesspractices.
As the Shosha are active in countries and regions throughout the world, and in all kinds ofindustrial sectors, they endeavor to achieve these SDGs and resolve common social problems
through their business transactions and investments. Among other things, they strive to ensuresustainable use of resources, devise responses to climate change, develop regional economies, takehuman rights and labor conditions into account, and preserve biological diversity.

Stable Supplies of Resources
and Energy

Lead Global Expansion

Stable and Secure Supplies
of Safe Food

Support More Comfortable
Lifestyles

Achieve a Sustainable
Society

Preparing for the Aging
Society

Establish Social Infrastructuresin Japan and Overseas

Sustainable Development Goals (SDGs)

Shosha Handbook 2019 15

2（1）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～-* Take-up of oil and natural gas underJapanese corporate equity interests
as a proportion of total imports anddomestic production volume.

Stable Supplies of Resources
and Energy (Energy)

Since Japan depends on overseas sources for supplies of minerals (iron ore, nonferrous metals,
rare metals, etc.) and energy (oil, coal, natural gas, etc.), the Shosha have always played a key rolein their procurement.
The Shosha explore resources at their own risk, negotiate with the governments of the countries
that own the resources and the companies with rights holdings, secure their own rights throughinvestments and financing, etc., and even participate directly in mine operations. At the same time,they seek to spread risk by diversifying their suppliers, and contribute to stable prices and supplies
by concluding long-term contracts.
On the one hand, they expand the areas from which they procure resources in cooperation withstrong overseas partners. On the other hand, at the distribution level they build broadly-based value
chains that extend from refining and trading, to the management of LPG sales outlets and filling
stations.
The following global map shows the resource and energy rights held by the seven Shosha. It
clearly shows how the interests of the Shosha extend from the Middle East to the North Sea,
Africa, Southeast Asia, Australia, and the Gulf of Mexico.
According to METI, Japan was responsible for 26.6% of its own oil and natural gas
development* in fiscal 2017, including imports from the equity interests of the Shosha.

▪Energy Resources Map

17.3%

12.1%

UK North
Sea

Azerbaijan

Italy

RussiaRussiaNorwayNorth Sea

9.1m tRussia(Eastern Siberia)

Russia(Sakhalin)

Middle East

33.5%

24.5bn m3
MyanmarThailand
Brunei

Middle East

17.8%

Equatorial Guinea

Angola9.4bn m3

146.4m t

39.1bn m3
32.2bn m3
Indonesia

Asia &
Oceania

Malaysia

Oil & gas
Crude Oil
Shale gas & oil

Indian Ocean

Mozambique

LNG
Oil, share of
production volume
Natural gas, share of
production volume
Principal oil import routes
Principal natural gas
import routes
16 Shosha Handbook 2019

Iraq

Egypt

Papua New Guinea

Australia

16.3%

Abu Dhabi

Qatar
Oman

Gas production
facility(Thailand)
Photo courtesy of
Mitsui & Co., Ltd.

▪The LNG Value Chain
Liquefaction facilities

Development

Logistics/LNG tankers

Exploration &development

LNG
production

Charterage/
operations

Rights holdings
Business investment

Business investment

Transactions
Business investment

Sales
Japan/
overseas
Transactions

Upstream

Downstream

99.7%

Crude
oil
Offshore Jackup Drilling
Rig Charter Business(Egypt)Methanol plant that uses
natural gas (Indonesia)(import dependence)

Norway2

Qatar %
Kazakhstan %12%

Mexico2%

China

4% UAE
4% Iraq
5%

Brazil3%

KuwaitIranCanada5%

5%

3%

Gulf of Mexico

4.1m tVenezuela▪Principal Natural Gas-producing
Countries
Egypt

Other

2%

Turkmenistan

2

UAE %
Malaysia
Offshore
Brazil

USA

22%

Peru

22%

3,868

2%

bn m3
(2018)

2%

Indonesia

2%

Russia17%

Norway3%

Algeria2%

Saudi Arabia

China

3%

Photo courtesy of Mitsubishi Corporation
Australia

Note
This!

13%

Russia3.4bn mLNG shipping facility (Indonesia)

Saudi Arabia

m B/D(2018)

2%

USA

3

2

Nigeria

21.5%

14.1m t

16%

94.7

2%

USA

Canada

USA

Other

18%

2%

16.2%

Principal
import sources:
Malaysia,
Australia, Qatar▪Principal Oil-producing Countries
AngolaUSA(import dependence)

LNG

Principal
import sources:
Saudi Arabia,
UAE, Qatar

Photo courtesy of
Toyota Tsusho Corporation

Photo courtesy of Sojitz Corporation

97.6%

3%

Iran

4% Qatar
5% 5%Canada6%▪Japan depends on the Middle East for much of its crude oil imports, but the Shosha's oil development
rights extend widely, to the North Sea, Africa, Southeast Asia, Australia, and the Gulf of Mexico.
▪Their natural gas rights also extend to Africa, Southeast Asia, and Australia, not just the Middle East.

Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; BP statistics 2019; Brains magazine (February 13, 2019 edition; Brains, Inc.), etc.

Shosha Handbook 2019 17

2（1）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～

Stable Supplies of Resources
and Energy (Metal Resources)-

In addition to energy resources such as oil and natural gas, the Shosha handle mineral resources
such as coal and iron ore, which are essential for producing steel. They also handle base metals,
including aluminum, copper and lead, as well as precious metals and the rare metals used invarious industries, including lithium, vanadium, cobalt, nickel, niobium, molybdenum andtungsten.
The Shosha endeavor to ensure long-term, stable supplies of such resources by securing mining
rights and engaging in the smelting & refining business.
The following map shows how the rights to metal resources held by the Shosha are distributed.

▪Metal Resources Map

Kazakhstan

Mongolia

Philippines

Laos

Madagascar(Nickel,Cobalt)Indonesia(Nickel,Cobalt)South Africa

Mozambique(Nickel)Australia

Iron ore business (Australia)
Photo courtesy of Mitsui & Co., Ltd.

18 Shosha Handbook 2019

Coal

100%

100%

(import dependence)

100%

Copperimport sources:
concentrate Principal
Chile, Indonesia, Peru

(import dependence)(import dependence)

Iron ore Principal import sources:

Principal import sources:
Australia, Indonesia, Russia

Australia, Brazil, Canada

Aluminum

Silver

Stainless steel raw
materials (ferrochrome)

Zinc, lead

CopperRare metals

Iron ore
Coal
UraniumGold
Mining of silver, zinc, lead (Bolivia)
Photo courtesy of Sumitomo Corporation

CanadaUSA(Molybdenum)

Colombia
New Caledonia(Nickel)Venezuela

MexicoBolivia

Peru

Chile

Brazil(Niobium)(Molybdenum)

Argentine(Lithium)

Lithium Mining Project (Argentina)
Photo courtesy of Toyota Tsusho Corporation© OROCOBRE All Rights Reserved.
Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; Brains magazine (January 30 & February 6, 2019 editions; Brains, Inc.), etc.

Shosha Handbook 2019 192（2）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～

Stable and Secure Supplies of
Safe Food-

According to the United Nations, the global population was over 7.7 billion people in 2019, andis expected to increase going forward, especially in the emerging economies. By 2050, it is forecast
to reach 9.7 billion, which will lead to an increase in demand for food.
As income levels rise in the emerging economies, moreover, demand for higher quality diets will
likely increase, while the ingredients of the diets will also change, with greater demand for meats.
At the same time, we expect people to become more concerned about food quality and food safety.
To ensure stable global food supplies, the Shosha will work on raising agricultural productivity,
diversify suppliers, and build more reliable procurement routes, thus playing a role in efficiently
matching food supply and demand, which are often unevenly distributed from one region toanother.

▪Food Business Map

Agricultural products,
Poultry meat and pork, Eggs,
Bluefin tuna aquaculture

Salmon & trout
aquaculture(Norway)(Japan)Grain collection &shipping and exports(Russia)

Agricultural production& collection
Fully-closed life-cycle
aquaculture of bluefin tuna
(Japan)Photo courtesy of
Toyota Tsusho Corporation

Grain & oil seeds(Switzerland)(China)Flour milling,coffee production(Myanmar)

Poultry meat

Flour milling(Turkey)

European,Middle Eastern,
Africanmarkets(Viet Nam)

ShrimpaquacultureAsianmarkets(Thailand,
China, etc.)

Poultry meat
processing(Thailand)

Sugar(Thailand)

Coffeeproduction(Malaysia)

Agricultural production& collection,
Grain & oil seeds(Singapore)

Oil & fats processing(Indonesia)

Flour milling(Philippines)

Banana & pineapple plantations

Beef cattle
fattening(Australia)(Philippines)

Grain collection & shipping and exports(Australia)

Dole businessPhoto courtesy of ITOCHU Corporation

20 Shosha Handbook 2019

Dairy products(New Zealand)Improving agricultural
productivity

Strengthen food procurement
and supply capacity▪Participate in the agricultural
production business, fisheryproduct aquaculture business, etc.
▪Improve grain collection & shipping,and sales networks▪Supply agrochemicals, fertilizers,
agricultural materials

Ensure safety and quality▪Enhance traceability▪Example of Food Value Chain
Production &procurement▪Farm management▪Aquaculture business▪Grain production▪Grain collection& shipping▪Agrochemicals& fertilizers▪Agricultural materials

Primary
processing▪Oils & fats
▪Animal feeds▪Flour milling▪Sugar manufacture▪Dairy products▪Marine productprocessing

Secondaryprocessing▪Marine products▪Meats▪Sesame oil▪Edible oils
▪Beverages▪Fruit & vegetables

Intermediate
distribution▪Processed food
▪Meat distribution▪Food distribution▪Confectionery/
alcoholic beverages

Retailing▪Convenience stores▪Supermarkets▪Mass retailers▪Food service industry

Salmon & trout
aquaculture(Canada)Pig farming
business(USA, Canada)

Beef,pork, wheat,barley,soybeans, corn

Grain export terminal (USA)Photo courtesy of Marubeni Corporation

Grain collection &shipping and exports,
Edible oil refining,
SesameAgricultural production,
Edible oil refining,
Coffee production(USA)(Brazil)

Salmon aquaculture business (Chile)
Photo courtesy of Mitsui & Co., Ltd.

Advance into the smart
agriculture field (Japan)
Photo courtesy of Kanematsu
CorporationCorn, soybeans,soybean cake,green coffee beans

Suppliers

Salmon & trout
aquaculture

Grain collection &shipping and exports(Chile)Principal suppliers
USA, Australia, Brazil, Argentine, etc.

(Brazil, Argentine)

Beef(Argentine)

End-users(consumers)
Suppliers &end-users(consumers)
Perishables
Raw materials

Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; Brains magazine (July 25 & August 1, 2018 editions; Brains, Inc.), etc.

Shosha Handbook 2019 21

2Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～

Achieving a Sustainable Society（3）

The Shosha's top priority management issue is the realization of a sustainable society that
promotes harmony between social and economic development on the one hand, and the global
environment on the other. When contemplating investments in companies or development projects
such as infrastructural improvements, therefore, decision-making involves careful consideration of
the impact on the environment and society.
The adoption of the Paris Agreement on measures to deal with climate change from 2020
onwards has provided an opportunity to aim for a transition to a global, low-carbon society. This
has encouraged the increasingly broadly-based introduction of measures to deal with climatechange using renewable energy resources such as geothermal, solar, wind and small-scalehydroelectric power generation. All of these emit lower volumes of the greenhouse gas carbon
dioxide than thermal power generation using oil, coal and other fossil fuels. In addition to adopting▪Global Natural Energy Generating
Capacity in 2018
(Source: Prepared by JFTC based on the Renewables 2019 Global Status Report - REN21)
Unit: GW

Finland

NorwayPower generation
capacity (Total)

Wind

Concentrated
Solar Power
(CSP)

Solar

Geothermal

Biomass
IEA forecast 210 ～（2030）
340▪The Main Overseas Renewable
Energy Power Generation Projects
in Which the Shosha Are Involved

40 ～ 490 ～ 40 ～ 920 ～
50
1,000
120
2,700
13
505
6
591
1,246

World

130

BRICS

44

0

214

1

262

521

EU28

42

1

115

2

179

339

China

18

0

176

0

210

404

USA

16

3

62

2

96

180

Germany

8

0

45

0

59

113

India

10

0

33

0

35

78

Japan

4

1

56

0

4

64

UK

8

0

13

0

21

42

Note: Totals are not necessarily consistent because fractions of the displayed units
have been rounded

China
Laos
Egypt

JordanOman
ThailandSingapore

South Africa

Belgium

Solar/solar heat
power generation
Wind power
generation(incl. offshore wind
power generation)
Geothermal power
generation
Biomass power
generation

Wind power generation (USA)Photo courtesy of
Marubeni Corporation

22 Shosha Handbook 2019

Malaysia

Kenya

Netherland
UK
Germany
Ireland
Portugal

Spain

France

Italy

Polandinitiatives for broadening electricity supplies using renewable energy, the Shosha are expanding
their use of hydrogen energy, which is often dubbed the ultimate clean energy source. Working on
boosting the spread of electric cars and other next-generation vehicles as well as the developmentof smart cities, they are increasing their involvement in various new businesses in readiness for thetransition to a low-carbon society. Through such businesses, as well as sustainable forest
management involving afforestation and the consumer electronics recycling business, they are thus
aiming to realize a recycling-based economic society.
According to the Renewable Energy Policy Network for the 21st Century (REN21), a non-profit
organization headquartered in Paris, global renewable power capacity (excluding hydroelectric
power) amounted to 1,246 gigawatts (GW) in 2018 (see table on left-hand page).
Currently, wind power has the highest renewable power capacity, generating around 50% of thetotal, followed by solar power with around 40%. By country, China accounts for by far the largest
share of renewable power capacity with around 30% of the total, largely because of its substantial
wind and solar power generating capacity. The United States and Germany rank second and third.
Both have substantial wind and solar power generating capacity, whereas solar power is themainstay in fifth-ranked Japan.
The global map below shows the main overseas renewable energy power generation projects inwhich the seven Shosha are involved.

Solar power generation(Chile)Photo courtesy of Sojitz Corporation

CanadaTotal power
generation
capacity

16,3813,434

Equity power
generation
capacity

MW

USA

MW

(seven Shosha total)

Korea

MexicoPhilippines
Indonesia

USA (Hawaii)

Jamaica

Peru

Australia
Chile
Uruguay

Geothermal power generation(Indonesia)

Argentine

Photo courtesy of Mitsubishi Corporation

Note
This!

▪The equity renewable power generation capacity of 3,434MW is approximately equivalent to half thecapacity of The Shikoku Electric Power Company's generating facilities.
▪Including thermal and hydroelectric power, the overseas equity power generation capacity of the seven
Shosha amounts to 38,787MW. This is the equivalent of 20% of the overall capacity of the power
generating facilities of Japan's electric power suppliers, which totaled 228,479MW as of 2010, prior to theGreat East Japan Earthquake.
Reference: 1GW = 1,000MW (=1,000,000kW)

Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; Brains magazine (January 31 & February 7, 2018 editions; Brains, Inc.), etc.

Shosha Handbook 2019 23

2（4）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～

Establishing Social Infrastructuresin Japan and Overseas-

Demand for the development and construction of electric power, water, railway, telecommunications
and other facilities that constitute the base of societal infrastructure is rising worldwide. Estimated at anannual $1 trillion globally, infrastructural demand is particularly high in the developing economies,
while demand for electric power continues to increase against the background of growing populations
and rising living standards. Moreover, preparations to deal with water shortages is becoming an issue as
uneven regional distribution of water resources is exacerbated by factors like population growth andclimate change. Progress in urbanization characterized by rising concentrations of population in cities as
economies grow is causing serious traffic congestion, which can only be mitigated and eliminated by
improvements in transportation and logistical networks. Meanwhile, demand for superannuatedinfrastructure repairs and renewals is rising in the advanced nations.
In addition to business entities engaged in operations, the infrastructure business involves
financial institutions that provide funding, public financial and insurance institutions such as theJapan Bank for International Cooperation (JBIC), and Nippon Export and Investment Insurance(NEXI), as well as manufacturers that provide equipment, engineering and construction companies
that subcontract construction work, and public utilities that purchase services. The Shosha pay
attention to all aspects of such projects and play a role in settling confrontations between interested
parties whose vested interests may clash.
In the case of some power generation projects, for example, the Shosha select the optimal locations andthe most competitive manufacturers of power generation facilities through their domestic and overseas
networks. They also transport and install generating facilities, get involved in power plant construction, andventure into managing power stations themselves as independent power producers (IPP).
The following world map depicts the main overseas infrastructure projects in which the Shosha
participate.

▪Map Showing Distribution of Power Generation Projects
TurkeyBelgium
UK

Pakistan

KuwaitBangladesh

Uzbekistan

China

Spain

CanadaPortugal

USA

Korea
MexicoBahrainTaiwanMoroccoTunisia
JordanUAE

India

Hong Kong
Jamaica

Qatar Oman
Saudi
Sri Lanka
ArabiaGhana

BrazilTanzania

Paraguay
Philippines

Mozambique
South Africa

PuertoRico
TrinidadandTobagoLaosAustralia
MyanmarViet Nam

Chile

Cambodia

ThailandIndonesia

Malaysia
Singapore

Independent Water and Power
Producer project (Kuwait)
Photo courtesy of Sumitomo Corporation

24 Shosha Handbook 2019

Thermalpower plant
Hydroelectric
power plants

Water business/water treatment plant (UK)

Passenger transportation business/West Midlands (UK)

Photo courtesy of Mitsubishi Corporation

Photo courtesy of Mitsui & Co., Ltd.

▪Map Showing Distribution of Other Infrastructure Projects

UkraineRussiaCzech

Mongolia

UK
Uzbekistan

Spain

MyanmarPortugal

TaiwanLaos

TurkeyChina
Thailand

Qatar

Kenya

Singapore

Bangladesh

AngolaVenezuela
Brazil

Palau

UAE
Oman

Ghana Saudi
Arabia

USA

Korea

India
Egypt

Viet Nam
Philippines

MexicoIndonesia

Papua New Guinea

Mozambique

Chile

Airports

Bridges

Water supply &sewerage systems

Subways &urban railways

Ports

Desalination

Argentine
Australia

Urban Railway in Bangkok (Thailand)

New Ulaanbaatar International Airport Operation Project(Mongolia)

Photo courtesy of Marubeni Corporation

Photo courtesy of Mitsubishi Corporation

Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; Brains magazine (January 31 & February 7, 2018 editions; Brains, Inc.), etc.

Shosha Handbook 2019 25

2（5）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～-

Leading Global Expansion

Globalization is prompting businesses to accelerate their advances into rapidly growing
emerging economies. However, venturing overseas inevitably involves legal procedures forsecuring land and registering companies, as well as hiring.
The Shosha are engaged in the industrial parks business, including sales of lots for theconstruction of factories after securing and preparing land, and preparing the electricity supplies,
water supplies, sewerage systems and other infrastructure necessary for companies moving into theparks. The strengths of the Shosha do not lie simply in handling the physical elements of theinfrastructure. They also excel in fully mobilizing their functions and knowhow to provide
operational support in a variety of areas. These range from obtaining permits and licenses forsetting up local subsidiaries to providing notifications and countermeasures relating to frequent
legal amendments concerning hiring and labor management.
They also support manufacturing in foreign countries in various ways. These include: arranging
for construction companies and construction materials for factory buildings; procurement, imports& customs clearance, and transportation; providing raw materials, importing parts and otherresources necessary for production; providing just-in-time logistical services, including the use of
their own warehouses; and product marketing and clientele development. They also provide rental
plants for small-scale businesses.
The figures on the right-hand page list the industrial parks in nine Asian countries in which theseven Shosha are engaged.

▪The Main Roles of the Shosha in the Industrial Parks BusinessLand acquisitions
Infrastructuralimprovement◦Transformer substations◦Sewage & water treatment plants◦Main roads◦Rental plants

Provide services◦F/S support：Cooperate in research, provide information◦Support company ：Investment procedures, licensing procedures for plant/
company start-up
start-ups◦Operational support ：Hiring and labor management; safety & security; taxation;accounting; foreign exchange controls; export/importprocedures; local procurement; industrial waste disposal

Thilawa Special Economic Zone (Myanmar)
Photo courtesy of Marubeni Corporation

26 Shosha Handbook 2019

Name
Area (ha) Company nameToyota Techno
Toyota Tsusho
12
Corporation
Park India
Toyota Tsusho India
Toyota Tsusho
22
Corporation
Autopark
TT Techno Park
Techno Trends
Auto Park
Sojitz-Motherson
Industrial Park
Model Economic
Township20

Toyota Tsusho
Corporation

28

Toyota Tsusho
Corporation

115

SojitzCorporation

3,300

Marubeni
Corporation

ORIGINS by Mahindra
World City,
North Chennai

107

Sumitomo
Corporation

Sri City

4,000

Toyota Tsusho
Corporation

Name
China-Singapore
Suzhou Industrial Park

Area (ha)Company name26,000Mitsubishi
Corporation

Name
AMATA (Vietnam)
Industrial Park
Thang Long Industrial
Park
Long Binh Techno
Park
Thang Long Industrial
Park ⅡLong Duc Industrial
Park
Thang Long Industrial
Park (Vinh Phuc)

China(Total:26,000ha)

Viet Nam(Total:2,256ha)Phu Ann Thann

India(Total:7,604ha)Philippines(Total:1,555ha)Myanmar

Anflo Industrial Estate(Total:632ha)

Name
Thilawa
SpecialEconomic
Zone

Area
(ha)

Company
name632

Mitsubishi
Corporation,
Marubeni
Corporation,
Sumitomo
Corporation

Name

Malaysia(Total: 26ha)

Area (ha) Company nameCambodia(Total:5,674ha)(Total:427ha)

4,000
2,720

ITOCHU
Corporation,
Sumitomo
Corporation

TT Techno-Park2

Toyota Tsusho
Corporation

Name
Phnom Penh Special
Economic Zone
Poipet Phnom Penh
Special Economic
Zone

WHA

6,200

Toyota Tsusho
Corporation

Techno Park Poi Pet

Amata City, Rayong

Area (ha) Company name357

Sumitomo
Corporation

68

Sumitomo
Corporation2

Toyota Tsusho
Corporation

700

ITOCHU
Corporation

274

Sumitomo
Corporation

100

SojitzCorporation

346

Sumitomo
Corporation

270

SojitzCorporation

213

Sumitomo
Corporation

353

SojitzCorporation

Area (ha) Company name600

Marubeni
Corporation

448

Sumitomo
Corporation

70

Sumitomo
Corporation

212

SojitzCorporation

162

SojitzCorporation

63

Sumitomo
Corporation

Area (ha) Company name

Name

Indonesia

ITOCHU
Corporation,
Sumitomo
Corporation

Amata City, Chonburi

Name
Nusajaya Tech Park
Bandar Bukit Raja

Thailand(Total:12,922ha)

Name
Lima Technology
CenterFirst Philippine
Industrial Park
First Industrial
TownshipLight Industry Science
Park Ⅳ
Hermosa Ecozone
Industrial Park

Area (ha) Company name10
16

Mitsui & Co., Ltd.
Mitsui & Co., Ltd.

Area (ha) Company name

MM 2100

817

Marubeni
Corporation

East Jakarta Industrial Park

320

Sumitomo
Corporation

Suryacipta City of Industry

1,400

Sumitomo
Corporation

Karawang International
Industrial City

1,400

ITOCHU
Corporation

PT.TT Techno Park

15

Toyota Tsusho
Corporation

Greenland International
Industrial Center (G.I.I.C.)

1,700

SojitzCorporation

SLP Karawang

22

Mitsui & Co., Ltd.

Note: Projects in individual countries are listed in order of establishment date; including sales agency activities.
Figures for Area are approximate numbers; please check individual company websites for information on recent developments.

Totals：Approx.

57,100ha(nine countries)(Reference: The area of the 23 wards of Tokyo, around 62,800ha)
Source: Prepared by JFTC based on Brains magazine (February 28, 2018 edition; Brains, Inc.), etc.

Karawang International Industrial City (Indonesia)

Thang Long Industrial Park (Viet Nam)

Photo courtesy of ITOCHU Corporation

Photo courtesy of Sumitomo Corporation

Shosha Handbook 2019 27

2（6）Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～-

Supporting More Comfortable
Lifestyles

Since the Shosha often provide many products and services for consumers through joint
ventures and other cooperative arrangements with investees and other partners, consumers
frequently buy such products and services without realizing that the Shosha are involved.
In fact, the Shosha are engaged in almost every aspect of daily life, from clothing, food anddwellings, to everyday living and enjoyment, thereby contributing to the realization of more
comfortable lifestyles.

Principal areas of focus:
Convenience stores, supermarkets
Food services, foreign fashion brands
Satellite broadcasting & cable TV, movie production & distribution,
anime content
Office buildings, real estate (residential), shopping centers
Car-sharing, electricity retail in Japan
They also operate TV shopping and online shopping services, as well as in-store sales of products.

High-performance materials(official uniforms and sportswear forJapan's Olympic team)

Cable TV business (Jupiter Telecommunications)Photo courtesy of Chori Co., Ltd.

Photo courtesy of Sumitomo Corporation

Large Mixed-Use Redevelopment Project in Downtown Yangon (Myanmar)

Brand goods store (Orobianco)

Material provided by Mitsubishi Corporation

Photo courtesy of ITOCHU Corporation

28 Shosha Handbook 2019

Iwatani hydrogen refueling station, Ariake, Tokyo

Daycare management business (Japan)

Photo courtesy of Iwatani Corporation

Photo courtesy of Sojitz Corporation

Summit, Seven & i
Holdings, Sotetsu
Rosen, Tobu Store,
Mammy Mart, United
Super Markets
Holdings, FamilyMart
UNY Holdings, Life
Corporation, Lawson
Grand Marche,
Jupiter Shop Channel,
MAGASeek,
BookLive,
QVC Japan

Convenience
stores&supermarkets

Nippon Mobile
Hydrogen Station
Services

KFC,
Soup Stock
Tokyo

Electricity
retailThe Shosha's
Principal
Consumeroriented
Businesses

Food service
chains

Fukuske,
Admiral,GELANOTS

OthersTV & online
shopping

Meal services,car-sharing,
online English
conversation
services, welfare
services

Urban
development& real estate

Brandedfashion goods
Broadcasting&
video services

Denim brand(RESOLUTE)
Photo courtesy of
NIPPON STEELTRADING CORPORATION

Satellite
broadcasting& CATV, movie
production &distribution

Housing & officebuilding development,
shopping centers,
smart cities, Mixed-use
development"Global Gate complex"

ICT
infrastructureservices
High-speed
communications,sales of portableterminals & circuits,Internet-related services,
IT solutions, IoT

Shosha Handbook 2019 29

2Chapter 2 The Shosha Are Active Worldwide ～The Roles of the Shosha～

Preparing for the Aging Society（7）

As a result of their rapidly falling birthrates and aging populations, Japan and many otheradvanced nations are facing growing needs in a variety of areas, including healthcare, nursing careand health services.
In the emerging economies, too, rising incomes and changing lifestyles are spurring
improvements in healthcare and encouraging greater awareness of preventive health services.
The Shosha recognize that demand for healthcare is expanding on a global scale and havealready launched initiatives to meet it.
They are therefore contributing to enhancing people's quality of life through participation in awide range of sectors, including: medical equipment for treating cancer; support for new andgeneric drug development; supplies of pharmaceutical raw materials and formulations; support forestablishing and managing medical institutions in Japan and overseas; provision of medical
information services; drugstore management; online sales of pharmaceuticals and health-related
products; rental wholesaling of nursing care supplies; and management of facilities for the elderly.
The chart on the right-hand page summarizes the principal initiatives adopted by the Shosha in
the areas of medical treatment, pharmaceuticals, and healthcare.

Hospital under IHH (Singapore)

Easily wearable mobile measuring
instrument, evaluating physicalconditions
Photo courtesy of CBC Co., Ltd.

Photo courtesy of Mitsui & Co., Ltd.

Consumer Healthcare Products(OTC drugs, Life support products)

Health care business(Karada Station: health care consultation services)

Photo courtesy of Kowa Company, Ltd.

Photo courtesy of Toyota Tsusho Corporation

30 Shosha Handbook 2019

Medical Treatment, Pharmaceuticals,and Healthcare-related Businesses▪Development, manufacture, imports, sales & leasing
Medical machinery,equipment, and materials ▪Clinical research outsourcing businessPharmaceuticals▪Drug design support, pharmaceuticals development▪Pharmaceutical ingredients/intermediates/formulations/diagnostic products, cosmetic raw materials▪Generic drug manufacturing & sales, veterinary drug sales▪Health insurance dispensing, drugstores

Hospitals▪Hospital management & management support▪Hospital outsourcing business(support for inventory management & procurement ofpharmaceuticals, medical equipment & materials, etc.)▪Pharmaceuticals information services▪Education & staffing services for healthcare providers▪Telemedicine business▪Regenerative medicine business

Health▪Agency handling of reservations for medical
examinations& physical check-ups, and payments▪PET (Positron Emission Tomography) business▪Telephone health consultation▪Medical treatment & healthcare publications▪Welfare & health support services▪Health care consultation services, health management
support services

Nursing care &care services
for seniors▪Welfare product supplies▪Home-based care services▪Wholesaling and rental wholesaling of nursing care supplies▪Home medical massage service▪Private rehabilitation business

Source: Prepared by JFTC based on Annual Reports (Integrated Reports) 2018, websites; Brains magazine (January 17 & January 24, 2018 editions; Brains, Inc.), etc.

Beauty care products
Photo courtesy of NAGASE & CO., LTD.

Clinical analyzers
Photo courtesy of Hitachi High-Technologies Corporation

Shosha Handbook 2019 31

Column

Column4 Why Did Japan's Sogo Shosha Become Integrated?

It is said that Shosha (trading companies), particularly Sogo
Shosha (integrated trading companies), are peculiar to Japan, but
this does not mean that they only exist in Japan. When we survey
the trading companies of the world, we find that other countries
have huge trading companies that resemble Japan's Sogo Shosha,
though they are more common in Korea, China and India than in
the West.
A comparison of the world's trading companies with Japan's
Sogo Shosha shows that the latter have an overwhelming
presence in terms of size, diversity of products handled, andareas of activity. After the Pacific War, Shosha made thetransition to integrated trading companies around 1960, primarily
for the following three reasons.

3. Resumption of Private Sector Trade Revitalized
the Activities of the Shosha

Immediately after the war, Japan's trade was governmentcontrolled. Limited private sector trade subsequently resumed inAugust 1947, but restrictions were lifted on exports in December
1949 and on imports in January 1950, while Shosha were allowed
to establish overseas branches in principal.
The start of the Korean War in June 1950 triggered a "special
procurement" boom in Japan, boosting transaction demand andrevitalizing trading company activities. Shosha were able to givef ull rein to their accumulated experience under Japanese
government's export promotion policies and measures tostrengthen the Shosha.

Factors behind integration
1. Knowhow Accumulated during the War
During the days of the wartime command economy, trading
companies were forcibly uncoupled from the products andgeographical regions in which they had specialized up until then.
They became involved in various new businesses, including
purchasing rice, wheat and cotton in China, investing in
distributors and companies under wartime government controls,
managing manufacturers and investing in heavy industries. The
knowhow acquired through these experiences pushed textile andsteel trading companies to diversify and integrate.

2. The Impact of Dissolving the Zaibatsu
The initial postwar policies of GHQ (General Headquarters)
called for the dissolution of the Zaibatsu (big financial
conglomerates) and the adoption of antitrust policies to promote thedemilitarization and democratization of Japan. Operations at theheadquarters of the four largest Zaibatsu were halted in November
1945, and the former Mitsui & Co., Ltd. and the old Mitsubishi Shoji
were dissolved under the Memorandum Concerning the Dissolutionof Trading Companies in July 1947. This change in the status of thetwo companies that had once led the prewar trading company sector
threw the sector into confusion, and the intense competition thatensued resulted in more diverse product ranges and areas of activity.

Knowhow
Accumulated
duringthe War
The
Impact of
Dissolving
the Zaibatsu

Resumptionof Private
Sector Trade

These factors delivered complex results in postwar Japan,
enabling some trading companies to develop into Sogo Shoshaaround the 1960s. In the sixty years or so since then, theirorganizations and businesses have evolved into their present
form. While measures to strengthen the trading companies
provided the initial momentum, it is important to note that theirintegration arose as part of a spontaneous process of competition
among themselves that ultimately enabled them to make themost of their individual experiences.
In this, they were supported by aggressive Shosha personnel
who overcame the many difficulties they faced without
forgetting their mission.

Note: Legally speaking, the former Mitsui & Co., Ltd. and the present-day Mitsui & Co., Ltd., and the old Mitsubishi Shoji and the present-day Mitsubishi Corporation arecompletely different corporate entities with absolutely no continuation between them.

32 Shosha Handbook 2019

1

Chapter 3 The Shosha's CSR Activities

The Shosha's CSR Activities

The Shosha strive to realize a sustainable society by resolving various social problems throughtheir activities (see Chapter 2.1). At the same time, they are involved in activities that transcend theboundaries of their business so as to be useful to society by responding to the needs and demandsof the various stakeholders around them.

1 Social Welfare & Reconstruction Support
The Shosha donate assistance funding for the handicapped and welfare activities, as well as forreconstruction support in countries and regions that have been struck by disasters. They also workon industrial recovery and provide assistance to create employment in disaster-stricken areas, andencourage their employees to engage in fund-raising and volunteer activities. To help povertystricken areas and disadvantaged children, they cooperate in constructing facilities and improving
the living environment by resolving problems involving water and hygiene.

"DREAM AS ONE." projectin support of parasports
Photo courtesy of
Mitsubishi Corporation

2 Global Environment
The Shosha have initiated activities aimed at resolving problems affecting the global environment,
resources & energy, and have established environmental funds to support research into such issues.
They also provide funding support for NPOs and other volunteer organizations, and research
institutions at universities, etc. In addition, they are engaged in projects to regenerate tropical rain
forests, and preserve coral reefs, forests and ecosystems. Also participating in the Commitment to a
Low Carbon Society and the Voluntary Action Plan for Establishing a Sound Material-Cycle Society
through JFTC, promoting energy efficiency, reduction of wastes and recycle.

Sojitz Foundation
Photo courtesy of Sojitz Corporation

3 Education and International Exchange
The Shosha are involved in activities to promote educational support and human exchange witha view to fostering internationally-minded members of the next generation who will takeresponsibility for the future. These activities include educational support through scholarship funds
and grant programs, financial aid for establishing schools, donations of books to educational
institutions and libraries, and establishing foundations for educational purposes in Japan. They also
extend to courses and training at universities overseas.

Mobile Learning Center
Project
Photo courtesy of ITOCHU
Corporation© Save the Children

4 Culture & Arts
The Shosha provide support for cultural and artistic activities as part of their social contribution
activities. In Japan, for example, they sponsor awards for musical competitions and symphonyorchestra concerts, run career support programs for people who aspire to become professional
artists, support sports events and the athletes who participate in them, manage museums and art
galleries, and display or lend out paintings and costumes. Overseas, they provide funding assistancefor museums and donate vehicles.

Cultural activities support
Photo courtesy of Hanwa Co., Ltd.

Environmental education through Mitsui's Forests

Marubeni Educational Fund in Viet Nam

Photo courtesy of Mitsui & Co., Ltd.

Photo courtesy of Marubeni Corporation

Shosha Handbook 2019 33

2Chapter 3 The Shosha's CSR Activities

Action for a Better International
Community (ABIC)JICA Experts(Guidance to water quality preservation
method, National Water Commission,
Mexico)1 What is ABIC?
ABIC, which stands for “Action for a Better International Community” is a non-profit organization(NPO) established by Japan Foreign Trade Council, Inc. (JFTC). It was established in April 2000 tocontribute to society at home and abroad through private sector cooperation and exchange activities
involving human support provided by their members. JFTC's membership comprises people from
Shosha and other companies and organizations associated with international trade.
In cooperation with JFTC, retired employees of Shosha and other companies with experienceand know-how in various kinds of international business register with ABIC. They are active inmany areas, including support and exchanges for international students studying in Japan, lecturing
at universities and courses for working adults, and working together with local governments to
support small and medium enterprises.
Their activities lead to bridge Japan and international community through private sector
initiative as well as interaction with local communities. They also play a role in the field that are
not sufficiently dealt with by public sector and private companies, covering part of the functionthat administrative agency has traditionally performed.

2 MembershipBazaar to support
international students

World Team Table Tennis
Championships(Interpreter volunteers)

Royal Embassy of Saudi
Arabia in Japan(Staffing & placement)

Registered members: 2,912 (as of March 31, 2019)▪ Average age: 71▪ Shosha alumni: 69%▪ Alumni of financial, insurance and manufacturing companies, and public agencies: 31%▪ Members with overseas posting experience: 85% (Approx. 150 countries and regions)▪ Members with multilingual abilities: 46% (35 countries)

3 Principal Activities
Fiscal 2018: 2,605 activities; Fiscal 2000-2018: 25,233 activities▪ Cooperation with government agencies▪ Cooperation with non-governmental organizations▪ Cooperation with local governments▪ Support for small and medium enterprises▪ Support for foreign companies doing business with Japan▪ Training programs▪ Lecturing at universities and others▪ Education for international understanding at elementary and secondary schools▪ Support and exchanges for international students studying in Japan▪ Cooperation with international events▪ Project outsourcing▪ Introducing experts & staffs with skills, etc.

Appointment ceremony of “Overseas Sales Representative”(Support for local governments)

34 Shosha Handbook 2019

Olympic and Paralympic Education in Tokyo

Column

Column5

designates industrial heritage sites that contributed to Japan's
Heritage of METI
industrial modernization from the closing days of the Tokugawa shogunate
and the Meiji Restoration through the prewar period as Industrial
Industrial Modernization Modernizationsites. Several of these sites are associated withand the Shosha the Shosha. TheHeritage
following section introduces some of the leading sites.

Miike Coal Mines-related Heritage Sites

The Sado Gold Mine

Transportation- and Trade-related Heritage Sites related to Coal from the Miike Coal MinesThe Sado Gold Mine opened

The Miike Coal Mines were

Takuma DAN

in 1601 and supported thetaken over by Mitsui in 1889. At

finances of the Edo shogunatethat time, Takuma DAN, transferred

for many years. It was

to Mitsui and later became thenationalized in 1869, and sold off

Director-General of the Mitsuizaibatsu. Prior to that, he had been

to Mitsubishi Goshi Kaisha in

Miike Coal Mines

1896.

an engineer at the Ministry of Works and after traveling with the Iwakura

In 1848, the first president

Mission, graduated from the Massachusetts Institute of Technology.

of the former Mitsui & Co., Ltd.,The Sado Gold Mine

Takashima Coal Mine-related Heritage Sites

Takashi MASUDA was born inthe home of a local official(Hashima Island, or Gunkanjima (Battleship Island))Takashi MASUDA

who had a multi-generation association with the Sado Gold Mine, and

The Takashima Coal Mine started operations towards the end of the

lived in Sado until his father was transferred to Hakodate as a retainer of

Tokugawa shogunate as a joint venture between the Saga-han (Saga Clanthe shogun in 1855.

or Saga Domain) and Glover & Co., founded by Scottish merchant Thomas
Glover. Mining operations got underway in earnest when Mitsubishi bought

Seto Inland Sea Copper

it in 1881. The coal mining, mining division and mining research institute

The Besshi Copper Mine opened in 1691 and is believed to have laid theand in the same year, the coal sales division went independent as the oldwent independent in 1918 as Mitsubishi Mining (now Mitsubishi Materials),

foundations for today's Sumitomo. Until it closed in 1973, it was the only copper

Mitsubishi Shoji, which was dissolved in 1947*. Mining operations started atmine in the world to have been worked by the same company for approximately

Hashima Island in 1875 and came

300 years. The statue of Masashige KUSUNOKI outside Tokyo's Imperial

under Mitsubishi management in

Palace is the work of Koun TAKAMURA and others. It was planned by Sumitomo

1890. Hashima is also known as

to commemorate the bicentenary of the opening of the Besshi Copper Mine

Gunkanjima (Battleship Island) and isand presented to thelocated to the southwest of Takashima.

Imperial Household
Agency in 1900.
Masashige KUSUNOKI
outside Tokyo's
Imperial Palace

Battleship Island

Former Noritake Bone China Clay Factory
Seto Inland Sea Copper

The Port of Yokohama (Yokohama Customs House)
The building opened as* The present-day Mitsubishi
Corporation was established in 1954.

Old Noritake products were marked with a backstamp known as the
Maruki Mark. Ichizaemon MORIMURA VI, the founder of Morimura
Brothers Inc., is reputed to have said, "You are bound to confront withdifferent ideas and customs. However, you should overcome them to

Yokohama Customs House

succeed." To ensure the words would not be

Kanagawa Tax Office inforgotten, Kanji "困" ("difficulty") became the1859, but after going throughcompany logo; "木" ("tree") inside "困" is symbolized

several name changes, including

as an arrowhead that breaks through "difficulty." The

Yokohama Government Officelogo was also used in the back of potteries andand Yokohama Tax Office,became Yokohama Customs

Nobuyuki
NAKAJIMAHouse on November 28, 1872.

The head of the office at the time was Nobuyuki NAKAJIMA, a memberof the Kaientai (maritime corps) created by Ryoma SAKAMOTO. He wasalso the father of the first chairman of JFTC, Kumakichi NAKAJIMA.
Various events are held annually on November 28 to celebrate Customs
Memorial Day.

porcelain wares until World War II. It was known as
Maruki markthe "spider mark" in the United States.

Yahata Steel Works-related Heritage Sites
The government-managed Yahata Steel Works was established with aview to manufacturing various types of steel materials with a focus on
weapons at a time when demand for steel for military purposes was rising,and started operations in 1901. As production grew, sales to the private

Tomioka Silk Mill

sector also began. These were referred to as 'disposals by the government,'
The Tomioka Silk Mill started
operations in 1872 and the raw silk
manufactured there was initially
exported to Lyon in France by the
French company Hecht Lilienthal & Co.
until 1877, when direct exports by theformer Mitsui & Co., Ltd. commenced.
Tomioka Silk Milland Okura Gumi and Morioka Shoten of Tokyo, and Kishimoto Shoten andTsuda Katsugoro Shoten of Osaka were recognized as 'disposal merchants.'
After World War I, the focus shiftedfrom disposals of physical items tofutures contracts, and Mitsui, Mitsubishi,
Iwai and Ataka. were active as
recognized merchants.
A night view of Yahata Steel Works today

Shosha Handbook 2019 35

Chapter 4 The Activities of Japan Foreign Trade Council, Inc. (JFTC)

The Activities ofJapan Foreign Trade Council, Inc. (JFTC)
1 About JFTCJapan Foreign Trade Council, Inc. (JFTC) is a trade-industry association
whose core members are made up of Shosha and trade associations.
▪ Established in June 1947
▪ Regular Members: 42 Trading companies, 20 Associations, 29 Individuals
Associate Members: 55 Companies (other than Shosha) & 31 Associations involved in
trade (Total 177 members; as of May 15, 2019)2 Principal Business Activities(1) Proposals and Requests▪ JFTC engages with problems facing Shosha and the trading business, and submits proposals,requests and opinions to government ministries and relevant organizations, and proactively
endeavors to implement them. The objective is to improve the systems and conditions needed
for freer corporate activities, as well as maintaining and developing the free and fair trading
system and promoting sustainable growth.
<Maintaining and Developing the Free Trade System>
In light of the growing uncertainties facing international commerce, JFTC is strengthening
its efforts to support broader and deeper economic ties through Economic Partnership
Agreements (EPA), and to reinforce the activities and reform of the WTO.
<Improving the Systems and Conditions Needed for Freer Corporate Activities>
Opinions and requests submitted by JFTC includes, but are not limited to the issues listed
below;① Investment agreements, social security agreements and tax treaties② Security export controls③ Accounting standards and taxation④ Trade- and investment-related procedures⑤ Logistics⑥ Safety measures overseas⑦ Internal controls such as corporate governance and compliance with the Financial
Instruments and Exchange Act (FIEA, often referred to as J-SOX, Japan's versionof the US Sarbanes-Oxley Act)
⑧ International standardization, Utilization of international institutions⑨ Infrastructure exports overseas(2) Information Gathering and Sharing of Information among Members▪ Information includes; Policy measures adopted by governments at home and abroad that havea major impact on business; analyses of domestic and overseas markets, and economic trends;
management issues shared by multinational companies (including environmental, social andgovernance (ESG) management, information security, and digital transformation (DX)).
① Such information is gathered from government officials and academic experts
through various committees and external meetings. Mutual exchanges of
information and information sharing among members are also one of the key
functions of JFTC.
② Opportunities for informal conversations with government officials and experts arealso available through various meetings.
③ Regular seminars and lectures are available for members.
④ Trade analysis in cooperation with member companies (Outlook for Japan's Trade
Balance and Current Account, etc.)

36 Shosha Handbook 2019

(3) Initiatives to Support Strengthening of Human Resources▪ Training programs to assist human resources are also available to corporate members. JFTC
also supports promotion of workstyle reforms that allow the choice of various ways ofworking depending on individual personal circumstances. Through activities like this, JFTC
aspires to train human resources who can contribute to global society and to create a diverse
and inclusive society that will encompass a wide range of talented people. Some of the key
activities are as follows;① Improving and reinforcing teaching environments for elementary, junior high, andhigh school students overseas, with strong potential of contributing to future
global society② Educational seminars concerning workstyle reforms and diversity & inclusion③ Various training programs for Corporate members(4) Information Service Activities▪ Providing materials that explain Shosha’s activities in a way that can be easily understood by
Shosha’s stakeholders at home and overseas. Providing information to ensure members gain adeeper understanding of JFTC’s activities. Key activities;① Chairman's press conferences, announcements and comments② Shosha Symposiums and other events for working adults and students③ JFTC Monthly Report, the JFTC News, and the JFTC website④ Regular Publications (Foreign Trade and the Shosha Handbook (in Japanese andEnglish))(5) Activities Aimed at Realizing a Sustainable Society① Ensure members are thoroughly acquainted with the Shosha's Corporate Code of
Conduct, SDGs and international codes that must be complied with
② Research concerning Shosha's involvement in attaining SDGs, involving members
and external experts③ Formulate the Long-term Vision for Global Warming Countermeasures andpromote initiatives to deal with climate change under the Commitment to a Lowcarbon Society, and the Voluntary Action Plan for Establishing a Sound MaterialCycle Society④ Exchange of information and joint research relating to initiatives concerning social
contributions, corporate ethics, compliance, governance, etc.
⑤ Social contribution activities through co-ordination with entities such as ABIC (Action
for a Better International Community) (see Chapter 3.2)

Japan-China Social Security Agreement Signing Ceremony(Source: Prime Minister’s Office of Japan website)

Top Management Dinner Meeting among Regular Member Companies

Seminar on Promoting Diversity & Inclusion

Shosha Handbook 2019 37

Attached Table■ The World Economy and Trade
The World

Japan

Business Cycle

JFTC
ChairmanWorld War II ends.

1945 The United Nations is established.
The GHQ orders Japan to dissolve the big fourfamily-run conglomerates.

1946
1947

Marshall Plan: European Recovery Program
The GATT is signed.

The GHQ allows Japan to resume private trading Post-war Inflation
but with constraints.
Japan Foreign Trade Council, Inc. (JFTC) isestablished on June 25.

1948
The Coordinating Committee for Multilateral

1949 Export Controls (CoCom) is established.

The exchange rate against US dollar is fixed at¥360.

1950 The Korean War begins.

Japan resumes private trading.
The GHQ agrees in general for the Shoshas toestablish overseas branches.

1951

The JETRO is established.
San Francisco Peace Conference; The Treaty ofPeace with Japan is signed.
The Security Treaty between the US and Japanis signed.
Operation of civil aviation resumes.

1952

Japan joins the IMF and World Bank.

1953 The Korean War Armistice is signed.

Three Objectives and Four Principles for
Economic Independence: Austerity measures

1954

105 Shoshas specialized in textile go bankrupt(the post-war highest record).

The People's Republic of China is established.

The Bandung Conference: Asian-African

1955 Conference

Japan joins GATT.

1956

The systems that allow Shoshas to purchaseand hold foreign currencies and to settle netbalances between main and branch offices go
into effect.

1957

The Japanese Government establishes anexport council for trade business under the
Export Council.

1958 established.

The Ministry of International Trade and Industry(MITI) announces the outline for effective
placement of overseas locations for Shoshas.

1959 The GATT Conference is held in Tokyo.

Japan Trade Charter is adopted on November
19.

The European Economic Committee is

EFTA is established.

1960 The Dillon Round of the GATT is launched.
OPEC is formed.

The OECD is established.

The Basic Guidelines for the Liberalization ofTrade and Exchange is decided.
The Treaty of Mutual Cooperation and Security
between the US and Japan is signed.

Recession
Induced by the
Post-war Stability

Kumakichi
NAKAJIMA(1947.6-1953.4)

SpecialProcurement
Boom Brought by
the Korean War

Expansion
Period of the 3rd
Business Cycle

Contraction
Period of the 3rd
Business Cycle

HeitaroINAGAKI

Expansion
Period of the 4th
Business Cycle

1961 The Dillon Round of the GATT is concluded.

The Joint US–Japan Committee on Trade andEconomic Problems is created.

1962 The naval quarantine of Cuba

Japan-China Trade Memorandum

1963

Trade Day is designated on June 28th.

1964 The Kennedy Round of the GATT is launched.

Japan accepts the obligations of Article VIII of
the IMF Agreement.
Japan joins the OECD.
New tax breaks for export promotion comeinto effect; The export income credit system isabolished.
The Tokyo Olympics

Boom Broughtby the Tokyo
Olympics

1965 American bombing of North Vietnam begins.

The Treaty on Basic Relations between Japanand the Republic of Korea is signed.

Post-olympics
Recession

38 Shosha Handbook 2019(1953.4-1972.10)

The World

1966 The Cultural Revolution begins in China.

Japan

Business Cycle

JFTC
ChairmanDeficit-covering government bonds are issued
for the first time.

The Six-Day War begins.

1967 The Kennedy Round of the GATT is concluded. The capital liberalization officially begins.
The ASEAN is established.
The OAPEC is established.

1968 The Treaty on the Non-Proliferation of Nuclear
Weapons is signed.

Joint Japan-US Committee on Trade andEconomic Affaires meeting in Honolulu:
Cooperation to support the dollar

1969

The 2nd stage of capital liberalization

1970

JFTC relocates head office from Bouekikaikan (Ginza) to World Trade Center Building(Hamamatsu-cho).
The Japan-US textile negotiations begin.
The 3rd stage of capital liberalization

1971

New economic policy is announced in the US;
The Nixon ShockChina joins the UN.
Multilateral currency adjustment: Smithsonian
Agreement

The yen is revalued upward against the US dollar
to ¥308 under the Smithsonian Agreement.
The 4th stage of capital liberalization (93%)
Japan agrees to a 3-year deal to limit textile
exports to the US.

1972

The US-Japan Textile Agreement
Okinawa is returned to Japan.
Sino-Japanese relations are normalized.

1973

100% trade liberalization is decided.
JFTC draws up the "Sogo-Shosha's Code of
Conduct" in May.
The floating exchange rate system essentiallycomes into effect: The end of Smithsonian
System.
Fact-finding survey on the largest 6 Shoshas(MITI)The Act on Emergency Measures against
Cornering and Speculative Stocking of Materials
and Products Related to Daily Life is officiallyannounced.

UK joins the EC.
The Tokyo Round of the GATT is launched.
The 4th Arab-Israeli War begins.
The 1973 oil crisis

HeitaroINAGAKI(1953.4-1972.10)

Recession
Induced by the
Nixon Shock

Boom Induced by
the Reconstructing
the JapaneseArchipelago

Fact-finding survey on Sogo Shoshas (Japan
Fair Trade Commission)
JFTC establishes Committee on Japan-Korea
Trade Expansion and Balance.

1974

1975

Expansion
Period of the 6th
Business Cycle

The Vietnam War ends.
The 1st G6 Summit: Rambouillet Summit

1976

The 2nd Fact-finding survey on Sogo Shoshas(Japan Fair Trade Commission): "Sogo Shoshas
in relation to Antitrust Policy"
JFTC sends 1st friendship delegation to People's
Republic of China.
The Lockheed bribery scandals

TatsuzoMIZUKAMI(1972.10-1985.5)
Oil Crisis

1977
The Sino-Japanese Peace and Friendship Treaty
is signed.
The Narita International Airport begins its
operation.

1978
1979

The 1979 energy crisis
The 5th G7 Summit in Tokyo
The Tokyo Round of the GATT is concluded.
The Soviet-Afghan War begins.

1980 The Iran–Iraq War
The Cancun Summit on International

1981 Development: The 1st North-South Summit

Douglas-Grumman scandal
Japan-US Auto Trade Talks begin.
The Foreign Exchange and Foreign Trade Act isrevised.
Japan agrees to limit Auto Trade.
International Trade Institute (ITI) is organized.

1982 The invasion of the Falkland Islands

Shosha Handbook 2019 39

Attached Table

The World

Japan

Business Cycle

Korean Air Lines Flight 007 is shot down bySoviet interceptors.

1983
1984
The 1985 Mexico City earthquake

1985 The Plaza Accord

The Chernobyl disaster1986 The 12th G7 Summit in Tokyo

The Uruguay Round of the GATT is launched.

Privatization of Nippon Telegraph and Telephone,and Japan Tobacco
Sharp appreciation of the yen against US dollar

1987 The Louvre Accord

1988 The Iran–Iraq War ends.

The US and Japan reach an agreement on theliberalization of beef and orange markets inJapan.

Black Monday

The Tiananmen Square Massacre

1989 The 1st APEC Economic Leaders' Meeting
The Berlin Wall is dismantled.

Iraq invades Kuwait.

1990 Germany reunifies.

TatsuzoMIZUKAMI(1972.10-1985.5)

JFTC is reorganized from an economic
organization to a trade-industry association in
June.
The US announces to impose restrictions on
Japanese imports.
The Japan National Railways is privatized anddivided into companies collectively called JRgroup.
The Revised Trade and Investment Insurance
Act comes into force.

Perestroika begins in the Soviet Union.

Yen Expensive
Recession

JFTC
Chairman

Bubble Economy

Yohei
MIMURA(1985.5-1992.5)

Sales tax is introduced.
The US-Japan working group on the Structural
Impediments Initiatives begin.
Stock market plunges showing signs ofcollapsing bubble in February.
The International Garden and Greenery
Exposition in Osaka
The final report of the US-Japan working groupon the Structural Impediments Initiatives

Coalition forces attack Iraq.

1991 The Gulf War begins.

The Soviet Union collapses.
The International Peace Cooperation Law (PKO
Law) is enacted.
The Japan Self-Defense Forces (JSDF) are
deployed to Cambodia (PKO).

1992
The 19th G7 Summit in Tokyo

1993 The EU single market is created.

Maastricht Treaty enters into force.

The Japanese Government eases regulations on
94 items.

Koichiro
EJIRI

The CoCom is disbanded.

1994 The Uruguay Round of the GATT is concluded. The yen rises above 100 yen to US dollar.
1995 The WTO is established.

The Great Hanshin earthquake
US-Japan Automotive Agreement

1996

JSDF are deployed to the Golan Heights (PKO).
US-Japan Semiconductor Agreement
Japanese embassy hostage crisis in Peru

1997 the UK to the People's Republic of China

Sales tax is raised to 5%.
The 50th Anniversary of JFTC
The Bank of Japan Act and Act on Prohibition ofPrivate Monopolization and Maintenance of Fair
Trade are revised, eliminating a ban on holding
companies.
The Guidelines for Japan-US Defense
Cooperation are approved.
The Conference of Parties to the Framework
Convention on Climate Change in Kyoto

Transfer of sovereignty over Hong Kong fromThe Asian currency crisis

1998

Underground tests of nuclear weapons by
India and Pakistan
The European Monetary Union begins.

1999 The NATO bombing of Yugoslavia in the
Kosovo War

The 26th G8 Summit in Okinawa and Kyushu

2000 The Inter-Korean Summit in Pyongyang

40 Shosha Handbook 2019

The Act on Emergency Measures for the
Revitalization of the Financial Functions isenacted.
The Nagano Winter Olympics
JFTC publishes the revised "Shosha's Corporate
Code of Conduct" in July.
JFTC sets up the Action for a Better
International Community (ABIC).

(1992.5-1996.5)

Post-bubble
Recession

MinoruMUROFUSHI(1996.5-2000.5)

The WorldThe September 11 Terrorist Attacks in theUS2001 The WTO Doha Development Round begins.
China joins the WTO.

Japan

Business Cycle

ABIC is approved as NPO.
SFDF are deployed to Indian Ocean to support
the US.

Post-bubble
Recession

2002

Euro banknotes and coins come into
circulation.
North Korea declares its development of
nuclear weapons.

JFTC draws up the "Shosha's Corporate
Environmental Code of Conduct" in February.
The 1st Japan-North Korea Summit meeting in
Pyongyang

2003

North Korea announces its withdrawal fromthe NPT.
The Iraq War begins.

The Act on Special Measures concerning
Humanitarian Relief and Reconstruction Workand Security Assistance in Iraq is enacted forenabling JSDF to be deployed.

Repeated suicide bombing attacks in Iraq etc.

2004 EU expands to 25 countries including 10 new
countries from Eastern Europe.

The renminbi appreciates against USD by 2%.

2005 The 1st East Asia Summit (16 countries)

2006

The Kyoto Protocol enters into force.
The 2005 World Exposition in Aichi: Love theEarth Expo
JFTC revises the "Shosha's Corporate Code of
Conduct" in June.

(2000.5-2004.5)

Expansion
Period in the 14th
Business Cycle

Mikio
SASAKIThe 34th G8 Summit at Toyako in Hokkaido
Lehman Shock in September
Japan Air Self-Defense Force withdraws fromThe crude oil price soars (above $100/barrel at Iraq after 5-year deployment.
one point).

20092010 Financial crisis in Greece

The 10th Anniversary of ABIC

US completes withdrawal of American militaryforces from Iraq.
Documents released from the negotiating
chairs of WTO Doha round.

(2004.5-2008.5)

The 60th Anniversary of JFTC
Postal privatization

The three-party coalition government of
Democratic Party of Japan, Social Democratic
Party, and the People's New Party is set up.

2011

Kenji
MIYAHARA

China becomes the world's largest holder of
The end of the BOJ's zero-rate policy (0% toforeign exchange reserves.
0.25%)UN Security Council adopts sanction resolution The announcement is made that the pastagainst North Korea's underground nuclear
longest expansion period during the 6th
test.
business cycle is surpassed.

2007 The US subprime mortgage crisis in August
2008

JSDF are deployed to Samawah in Iraq.
JSDF's joining to the coalition forces is decided.

JFTC
Chairman

The Great East Japan Earthquake on March 11
Japan completes analog switch off in terrestrial
television broadcasting.
Japan records first trade deficit in 31 years.

2012 Russia joins the WTO.

JFTC becomes general incorporated
association.
LDP & NKP form coalition government.

2013 EU enlargement (28 member states)

Japan formally declares to join TPP in March.
Diet passes the act on the Protection ofSpecially Designated Secrets (SDS).

2014

Japan raises sales tax from 5% to 8% in April.

Global Economic
Crisis

Nobuo
KATSUMATA(2008.5-2010.5)

Expansion
Period in the 15th
Business Cycle

Shoei
UTSUDA(2010.5-2014.5)

European crisis

US-Cuba restores diplomatic relations.

2015 The 70th Anniversary of WWII

The 42th G7 Summit: Ise-Shima Summit (May)2016 BREXIT referendum (UK, June)

Paris Agreement enters into force.

Japan signs TPP in February.
2016 Kumamoto Earthquake on April 14

Eizo
KOBAYASHI(2014.5-2018.5)

2017

Donald Trump is inaugurated as the 45th
President of the US.
North Korea accelerates its development of
nuclear weapons.

The 70th Anniversary of JFTC2018

The Inter-Korean Summit in Panmunjom
US announces its withdrawal from the Irannuclear deal framework (May).
US relocates the Embassy in Israel toJerusalem (May).
US-China trade dispute has intensified.

JFTC revises the "Shosha's Corporate Code of
Conduct" in March.
The Related Acts to Promote Work Style Reform
is enacted (June).
TPP11 enters into force (December).

2019

The US-North Korea Summit in Viet Nam

Japan-EU EPA enters into force (February).

Kuniharu
NAKAMURA(2018.5-)

Shosha Handbook 2019 41

Japan Foreign Trade Council, Inc.

Shosha's Corporate
Code of Conduct
Foreword

Since the establishment of the original "Sogo-Shosha's Code of Conduct" in 1973
we have consistently taken heed of the various opinions voiced regarding theactivities of Shosha and, in order to clarify our social responsibilities and principles
of conduct as corporations, have developed this Code of Conduct over time byimplementing revisions in response to changes in the global situation and social
expectations.
The business operations of Shosha encompass all the industrial sectors of theworld. We act upon the firm belief that the realization of a sustainable society isboth our responsibility and the essential foundation upon which our corporate
activities must rest. Today, the international expansion of initiatives designed torealize a sustainable society in accordance with the United Nations Sustainable
Development Goals adds even further importance to the social mission of Shosha
while at the same time opening up new and potentially significant opportunities forbusiness development.
As Shosha, we must maintain a constant awareness of these social changes andproactively transform our own management practices. By fulfilling our social
responsibilities through the implementation of information disclosure andcompliance with relevant laws and international standards, we must fully apply ourcapabilities as Shosha by combining mid to long term perspectives with a clear
understanding of evolving social and economic demands in order to contribute to
the realization of a sustainable society.
We have produced this Code of Conduct in order to encourage JFTC member
firms to live up to their social responsibilities, evaluate their own behavior as
responsible corporations, and assist them in pursuing their own initiatives.
Section 1 Management Philosophy

As Shosha, we must constantly be aware of our role and responsibilities towards
society and, while balancing environmental, social and economic considerations,manage our business activities from a long-term perspective in order to contribute to
the realization of sustainable economic growth through business.
1. We must actively engage in communication with our shareholders, business
partners, consumers, employees, local communities and other stakeholders andmanage our businesses in such a way that responds to both their expectations
and consistently achieves the creation of new value.
2. Executive management must lead by example in their efforts to create
responsible businesses as defined by the evolving demands of the day.
3. We must engage in business in such a manner that the human rights of all
people are respected.
4. We must conduct our businesses with due consideration to the preservation ofa sound global environment and social sustainability, and actively engage inthe resolution of global, environmental and social issues.
Section 2 Functions and Areas of Activity

As Shosha, while giving due consideration to the attainment of the objectives of
the United Nations Sustainable Development Goals, we must strive to accurately
perceive evolving environmental, social and economic trends, and be responsive tothe attendant social demands in a comprehensive manner.
1. By collecting and disseminating information on a global scale and meeting thediversifying needs of our clients and markets, we must provide resources,
goods, and services to enrich society by implementing innovation.
2. By discovering new opportunities for business throughout the world, and by
developing these opportunities into sources of value for society, we must strive
to contribute to the resolution of social problems and the realization ofsustainable economic growth.
3. In the course of our global operations we must contribute to the achievementof balanced global development and regional prosperity by the promotion offree trade and investment and constructive partnership with national
governments, international bodies, and other relevant organizations andcorporations.
Section 3 Governance and Crisis Management

As Shosha, in recognition of our responsibilities to society, we must conduct ourbusiness in accordance with all relevant laws and regulations, show due respect forinternational standards and social conventions, and stress information disclosure in

42 Shosha Handbook 2018

1st version established: May 10, 1973
2nd version revised: July 8, 1999
3rd version revised: June 16, 2005
4th version revised: March 22, 2018
our efforts to maintain transparent management practices. In addition, we must also
implement and maintain crisis management systems designed to meet the various
threats facing both civil society and corporate activity.
1. In addition to legal compliance in our respective regional areas of operation,
we must abide by both the letter and the spirit of international rules andregulations and conduct ourselves in a socially conscientious manner.
Furthermore, we must manage our business activities in accordance with theunderstanding that free and fair competition is fundamental for the functioningof market economies, engage in proper transactions, responsible procurement
and other appropriate business practices, and maintain open and fair relations
with political parties and governments.
2. We must build systems to promote effective corporate decision-making,strengthen our internal audit functions, and constantly monitor the legality ofdecisions made within our organizations.
3. We must strive to achieve transparency through the appropriate and timely
disclosure of corporate information.
4. We must promote crisis management and information security in preparedness
for the eventuality of acts of terror, cyber-attacks, natural disasters and othercrises.
Section 4 Social Participation and the Promotion of Trust

As Shosha, we must strive to create relationships of mutual trust both
domestically and internationally and to actively participate in and contribute tosociety as good corporate citizens.
1. We must show respect for the cultures, customs and languages of othercountries and regions, and strive to actively participate in activities aimed atregional development through a process of private-sector diplomacy.
2. We must strive to promote relationships of mutual trust with all our
stakeholders including shareholders, business partners, consumers, employees,
and local communities by actively disclosing information regarding ourcorporate operations and by cooperating in regional activities which contributeto the achievement of secure and enriched standards of living.
3. We will not deal with any organizations influenced by or comprised oforganized crime that may operate in the communities in which we do business.
Section 5 Reform of Work Practices and Creation of Rewarding Work
Environments
As Shosha, we will strive to provide our employees with a rich and rewarding
work environment, to respect the diversity, character and individuality of ouremployees, and to promote corporate cultures in which each individual's talents andcreativity may be fully developed.
1. We must create and maintain work environments for our employees with due
consideration for health and safety.
2. We must respect the human rights of our employees, promote equal
opportunities among them, and oppose any discriminatory employment
practices or treatment.
3. We must respect the diversity and individuality of our employees and actively
support their skill and career development.
Section 6 Role of Executive Management in the Implementation of thisCode of Conduct
As Shosha, we recognize that it is the role of executive management to realize thespirit of this Code of Conduct, to lead by example in enhancing awareness of it
within their respective corporate organizations including subsidiaries and affiliates,
and to promote the understanding of the spirit of this Code of Conduct and its
application throughout their supply chains.
In addition, in the event of a violation of the spirit of this Code of Conduct,
executive management should discharge their responsibilities by taking the initiativein resolving the problem, investigating its causes and implementing measures toprevent its recurrence.
Note

The original Japanese language version of this document is the of ficial version
used by the JFTC and its members. This document is an English language translationof the Japanese language original and has been prepared as a public service.

SHOSHA: Creating Value Globally Shosha Handbook 20192019年7月31日 第1刷発行
発

行

所

一般社団法人 日本貿易会

Japan Foreign Trade Council, Inc.
〒105-6106 東京都港区浜松町2-4-1 世界貿易センタービル6階
6th Floor, World Trade Center Bldg., 4-1, Hamamatsu-cho 2-chome, Minato-ku,
Tokyo 105-6106, Japan
TEL
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FAX 03-3435-5979
E-mail chosa@jftc.or.jp
URL https://www.jftc.or.jp/
編集・発行人企画グループ長 兼 調査グループ長
Editor/Publisher Mutsuya KAMESAKIGroup Leader
Planning Group
Research Group
表紙デザイン
CoverDesigner

神永愛子 @primary-inc.jp
Aiko KAMINAGA

デ ザ イン
Designer

山口 勉 @primary-inc.jp
Tsutomu YAMAGUCHI印

光写真印刷株式会社

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亀岬睦也

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