Mitsui

Mitsui
is a Japanese corporate group and keiretsu that traces its roots to the zaibatsu groups that were dissolved after World War II. Unlike the zaibatsu of the pre-war period, there is no controlling company with regulatory power. Instead, the companies in the group hold shares in each other, but they are limited to exchanging information and coordinating plans through regular meetings.
The major companies of the group include Mitsui & Co. (general trading company), Sumitomo Mitsui Banking Corporation, Nippon Paper Industries, Pokka Sapporo Holdings, Toray Industries, Mitsui Chemicals, Isetan Mitsukoshi Holdings, Sumitomo Mitsui Trust Holdings, Mitsui Engineering & Shipbuilding, Mitsui O.S.K. Lines and Mitsui Fudosan.
History
Edo period origins
Founded by Mitsui Takatoshi (1622–1694), who was the fourth son of a shopkeeper in Matsusaka, in what became Mie prefecture. From his shop, called Echigoya (越後屋), Mitsui Takatoshi's father originally sold miso and ran a pawn shop business. The family would later open a second shop in Edo (modern Tokyo).
Takatoshi moved to Edo when he was 14 years old, and later his older brother joined him. Sent back to Matsutaka by his brother, Takatoshi waited for 24 years until his older brother died before he could take over the family shop, Echigoya. He opened a new branch in 1673; a large gofukuya (kimono shop) in Nihonbashi, a district in the heart of Edo. The genesis of Mitsui's business was in the Enpō era, which was a nengō meaning "Prolonged Wealth".
In time, the gofukuya division separated from Mitsui, and became Mitsukoshi. Traditionally, gofukuyas provided products made to order; a visit was made to the customer's house (typically a person of high social class or who was successful in business), an order taken, then fulfilled. The system of accountancy was called "margin transaction". Mitsui changed this by producing products first, then selling them directly at his shop for cash. This was then an unfamiliar mode of operation in Japan. Even as the shop began providing dry goods to the government of the city of Edo, cash sales were not yet a widespread business practice.
Edo's government had struck a business deal with Osaka. Osaka would sell crops and other material to pay its land tax. The money was then sent to Edo—but moving money was dangerous in middle feudal Japan. In 1683, the shogunate granted permission for money exchanges (ryōgaeten) to be established in Edo. The Mitsui "exchange shops" facilitated transfers while mitigating risks.
Formation of Mitsui zaibatsu
After the Meiji Restoration, Mitsui was among the enterprises that were able to expand to become zaibatsu not simply because they were already big and rich at the start of modern industrial development. Firms like Mitsui and Sumitomo were led by non-family managers such as Minomura Rizaemon, who guided the business by accurately forecasting the coming political and economic situations, by acquaintance with high-ranking government officials or politicians, and bold investment.
Mitsui's main business in the early period was drapery, finance, and trade, the first two being the businesses it inherited from the Tokugawa Era. It entered into mining when it acquired a mine as collateral from a loan it had made, partly because it could buy a mine cheaply from the government, Mitsui then diversified to become the biggest business in pre-war Japan. The diversification was mainly into related fields to take advantage of accumulated capabilities; for instance, the trading company entered into chemicals to attain forward integration.
On July 1, 1876, Mitsui Bank, Japan's first private bank, was founded with Takashi Masuda (1848–1938) as its president. Mitsui Bank, which following a merger with Taiyō-Kobe Bank in the mid-1980s became part of Sakura Bank, survives as part of the Sumitomo Mitsui Banking Corporation. During the early 20th century, Mitsui was one of the largest zaibatsu, operating in numerous fields.
Mitsui Bank became the holding company of the Mitsui zaibatsu from 1876. It was joined as an ultimate parent company by Mitsui & Co. and Mitsui Mining in 1900, with various industrial concerns owned by various combinations of these companies and their subsidiaries.
Likewise, Mitsui invested in maritime transportation to support its trading activities as well as invest in passenger transportation, first with the creation in 1878, of Osaka Shosen Kaisha (OSK), which was merged with Mitsui Steamship in 1964, to become Mitsui OSK Lines (MOL), which became one of the largest ocean shipping groups in the world.
When the United Kingdom withdrew from the gold standard in 1931, during the height of the Great Depression, Mitsui Bank and Mitsui & Co. were found to have speculated around the transaction. This raised a political furor in Japan and resulted in the assassination of Mitsui executive Takuma Dan.
World War II
During the 1930s and '40s, the subsidiary tobacco industry of Mitsui had started production of special "Golden Bat" cigarettes using the then-popular Far East trademark. Their circulation was prohibited in Japan and was used only for export. Local Japanese secret service kempetai under the controversial Imperial Japanese Army General Kenji Doihara had the control of their distribution in China and Manchuria where the production exported. Within the mouthpiece were small discreet doses of opium or heroin, and consequently millions of unsuspecting consumers became addicted to these narcotics, while huge profits were created for the company. The mastermind of the plan, Doihara, was later prosecuted and convicted for war crimes before the International Military Tribunal for the Far East, sentenced to death; but no actions ever took place against the company which profited from their production. According to testimony presented at the Tokyo War Crimes trials in 1948, the revenue from the narcotization policy in China, including Manchukuo, was estimated in 20 million to 30 million yen per year, while another authority stated that the annual revenue was estimated by the Japanese military at US$300 million a year.
During the Second World War, Mitsui employed American prisoners of war as slave laborers, some of whom were maimed by Mitsui employees.
Postwar development as keiretsu
In 1947 and 1948, the Supreme Commander Allied Powers pressed the Japanese government to dismantle the ten largest zaibatsu conglomerates, including Mitsui. The Mitsui Group, broken into many separate companies, reorganized itself as a horizontal coalition of independent companies in the 1950s, once the occupation of Japan had ended and some of the smaller companies were allowed to re-coalesce. The central firms in the keiretsu became Mitsui Bank and Mitsui & Co.
Mitsui lagged somewhat behind its rivals Mitsubishi and Sumitomo Group in reorganization. Mitsui Bank, which should have been the mainstay and principal capital provider of the group, declined in size due to the collapse of the Imperial Bank after the war, which resulted in reduced cohesion of the conglomerate. Many companies that were once part of the Mitsui Group have become independent or tied to other conglomerates. Specifically, Toshiba, Toyota Motors, and Suntory, once part of the Mitsui Group, became independent, with the Toyota Group becoming a conglomerate in its own right.
In 2000, Mitsui Pharmaceuticals was acquired by the German Schering AG from Berlin.
Ishikawajima-Harima Heavy Industries (IHI Corporation) is now considered to be part of the Mizuho Group, and many companies in the Sumitomo Mitsui Financial Group are more closely tied to the Sumitomo Group than the Mitsui Group. there were signs that Mitsubishi UFJ Financial Group and the Mitsubishi Group could be taking over other parts of the Sumitomo Mitsui Financial Group. Mitsukoshi merged into Isetan, a major department store with close ties to the Bank of Tokyo-Mitsubishi UFJ, to form Isetan Mitsukoshi Holdings in April 2008.
Makeup of the Mitsui Group
Companies associated with the Mitsui keiretsu include Mitsui & Co., Sumitomo Mitsui Trust Holdings, Japan Steel Works, Mitsui Chemicals, Mitsui Construction Co., Mitsui Engineering & Shipbuilding, Mitsui Fudosan, Mitsui-gold, Mitsui Mining & Smelting Co., Ltd., Mitsui Oil Exploration Co. (MOECO), Mitsui O.S.K. Lines, Mitsui Petrochemical Industries Ltd, Mitsui-Soko, Mitsui Sumitomo Insurance Group, Nippon Paper Industries, Pacific Coast Recycling, Sumitomo Mitsui Banking Corporation, Taiheiyo Cement, Tokyo Broadcasting System, Toray Industries, Toshiba Corporation, Tri-net Logistics Management, and Mitsui Commodity Risk Management (MCRM).
Mitsui companies in the Nikkei 225
Aim Services Co., Ltd
Denka
Isetan Mitsukoshi Holdings
JA Mitsui Leasing
Japan Steel Works
Mitsui & Co.
Mitsui Chemicals
Mitsui Engineering & Shipbuilding
Mitsui Fudosan
Mitsui Life Insurance Co.
Mitsui Mining & Smelting Co., Ltd.
Mitsui O.S.K. Lines
Mitsui Sumitomo Insurance Group
Mitsui-Soko Holdings
Nippon Paper Industries
Nihon Unisys
Sanki Engineering
Sapporo Brewery
Shin Nippon Air Technologies
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Construction
Sumitomo Mitsui Financial Group
Sumitomo Mitsui Trust Holdings
Tokyo Broadcasting System
Toray Industries
Toshiba
Toyo Engineering Corporation
Companies with close ties to Mitsui
Abellio Greater Anglia – Mitsui owns 40% of the British rail operator.
West Midlands Trains - Mitsui owns 15% of the British rail operator.
BHP
Columbia Asia
Fujifilm
IHH Healthcare Berhad – Mitsui owns 20.5% of the company and is represented on its board.
Ito-Yokado
Kanebo (Kao Corporation)
Komatsu
Oji Paper Company - once had a transaction in its development on the purchase of several Mitsui subsidiaries by Oji.
The Oriental Land Company (Keisei Electric Railway)
Rio Tinto
Sagami Railway
Sims Metal – Mitsui owns 18% of the company and is represented on its board.
Sony
Suntory - former subsidiary.
Toyota - former subsidiary
Vale
Yamaha
Yanmar
RTV Pink
See also
List of Japanese companies
Mitsui & Co
Mitsui family
Mitsui Golden Glove Award
Mitsui O.S.K. Lines
Sumitomo Mitsui Financial Group
Citations
General sources
Hall, John Whitney (1970). Japan: From Prehistory to Modern Times. Delacorte Universal History no. XX. New York: Delacorte Press. .
Shinjō, Hiroshi (1962). History of the Yen: 100 Years of Japanese Money-economy. Kobe: Research Institute for Economics & Business Administration, Kōbe University.
External links
The Mitsui Public Relations Committee
Mitsui Public Relations Committee: Member Companies
Our Roots: Sakichi Toyoda and Toyota Industries Corporation backed by the former Mitsui & CO.: Forming the roots of our strong relationship with Toyota Motor Corporation today
Companies established in 1876
Conglomerate companies based in Tokyo
Japanese companies established in 1876
Keiretsu
Sumitomo Group
Zaibatsu
Japanese war crimes