Singapore


	The Japan Times WORLD EYE REPORTS SINGAPORE

©THE JAPAN TIMES	Thursday, October 30, 2003

The sogo shosha of the 21st century

Today’s sogo shosha – Japanese general trading companies—are anything but general. As markets and industries continue to shift towards globalization, corporations are keeping up with the tempo of change.

Mitsubishi Corporation no longer thinks of itself as a trading house. Today its business is much more complex than simply transporting goods on commission. It is now involved in a wide diversification of activities and investments that have taken it far from its traditional roots.

Mitsubishi Corporation has a long history in Singapore and has played an important role in developing the country’s infrastructure. The company came to Singapore early to invest in a variety of industries, creating significant employment at the same time. Some of its early investments included shipbuilding, steel construction, chemicals, semiconductors and logistics.

Ken Kobayashi, senior vice president and general manager of Mitsubishi Corporation in Singapore and president of the Japanese Chamber of Commerce and Industry Singapore

“The Japanese business community has always been very quiet while operating in Singapore. I want to create further awareness about the success and presence of the Japanese companies here. We should be proud of our achievements and be recognized for them,” says Ken Kobayashi, senior vice president and general manager of Mitsubishi Corporation’s Singapore branch and president of the Japanese Chamber of Commerce and Industry in the country.

In Singapore, Mitsubishi Corporation is approaching a variety of sectors with different strategies. The company’s core activities in the Asia Pacific region include chemicals, machinery, financing, oils and foods. From there, the company oversees operations from the eastern coast of Africa to southern China and from India and Pakistan to Australia and New Zealand. The company uses Singapore as a key logistics hub in the center of Asia to control all of its business in the region.

Mitsubishi Corporation has a team of 30 specialists based in Singapore to manage diverse business operations in multiple countries. In certain areas, such as the chemical sector, the company operates independently from its Japanese headquarters as a means of staying efficient and profitable. Yet, overall business strategies and risk management are often formulated in tandem with Japan.

In terms of turnover, Mitsubishi Corporation is the largest Japanese trading firm in Singapore. It is expected to play a significant role in helping the global company reach its turnover goal of around $900 million by the close of the 2003 fiscal year.

Achieving this amid intense competition will require focusing on sectors that promise profitable futures – including IT and biotechnology.

Because Singapore by itself has a relatively small market, Mitsubishi Corporation is also concentrating on business in other countries in the region. The company is currently further developing its automotive business in Indonesia for Mitsubishi vehicles, and for Isuzu in Thailand. Like many other trading companies operating in Asia, it also has its eyes focused firmly on China.

Toshiyuki Yanai, managing director of Mitsui & Co. in Singapore

In Singapore, the company is also focusing on activities including electrical power plant production, automatic transportation systems and automatic cargo handling systems. One successful project in recent years has been the creation and distribution of “smart cards” – designed as a quick payment system for public transportation and consumer spending outlets.

“We also have a partnership with Japanese Electric Company to supply contact-less smart cards,” says Kobayashi. “These were introduced in Hong Kong 10 years ago and in Singapore five years ago. Together our companies have supplied more than seven million cards that are used in bus systems, train systems and supermarkets. The Chinese and Singaporeans are very fond of these easy-use systems because it fits into their mentalities. I feel this technology will eventually spread around the world.”

One of the oldest Japanese firms in Singapore

Mitsui & Co, one of the Japan’s pioneer trading houses, established operations in Singapore in 1891 – just 15 years after the company was formed in Japan. Over the last 112 years, its core activities and function have changed significantly and continue to evolve.

Today, the company no longer simply transports goods from point A to point B. Mitsui & Co. Singapore now takes more of a total solutions approach to meeting its clients’ needs.

The company’s strong presence in Singapore primarily stems from the country’s large chemical industry. A major percentage of Mitsui’s business involves the transportation of Mitsui Chemicals’ products and petroleum.

While chemicals will remain the company’s core activity in Singapore, other important activities include shipbuilding and the trading of steel. Recently, the company expanded its activities into the biotechnology field. It sees great potential in this sector because of the governments’ strong support for the chemical, biotechnology, IT and semiconductor industries.

“I feel it is best for Mitsui & Co to focus on areas that are encouraged and supported by the government, so we began a biotech division three years ago,” comments Managing Director Toshiyuki Yanai. “We have formed a partnership with the National Cancer Center of Singapore, and we are currently researching the diagnosis and treatment for breast cancer.”

Yanai understands the importance of Singapore’s highly-skilled workforce, secure legal framework, excellent infrastructure and strategic location for his company. He also understands that the strong relationship that exists between Singapore and Japan will serve as an advantage as new opportunities arise in the Asia region.

“Because of the free trade agreements in this region, borders are becoming less important. Asia is becoming one region or market, and it will grow in its cooperative efforts rather than staying competitive,” says Yanai. “Today there are many similarities between Japan and Singapore, more so than most other Asian countries. So we will need to concentrate on our core strengths together to ensure our successful business relationship in the future.”

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