Mitsui | Strategy and Financial Highlights Information from ICIS

Edited from: “message from the president”, and “medium-term management outlook plan”, annual report 2007

Mitsui & Co states that during the two-year period of its medium-term strategic and financial global growth plan nearly all of its business segments recorded improved earnings, underpinned by the strong performance of the global economy. To evolve its business models, the company has made a number of investments and created business foundations in growth areas such as consumer services, which it expects to be future earnings drivers in 2007. On this basis, it will concentrate on its “new” medium-term management outlook plan.

The medium-term management outlook plan is based on the management of its strategic business portfolio to create value that meets the needs of its customers and society. In developing this financial and business vision the company says that it has “consciously focused on the qualitative elements necessary to create a Mitsui of higher value” over the next three to five years, rather than taking a purely quantitative approach based on the current environment.

It has defined the initiatives it needs to concentrate on the next two years in order to realise its vision. The external environment is believed to be highly changeable, as evidenced by the fact that net income for the year ended March 2007 exceeded the initial target of its previous plan “global growth 2007” by more than 100%, driven by sharp rises in prices of commodities such as crude oil and iron ore. It therefore believes that setting precise quantitative targets based on current earnings results would not lead the company in the right direction to ensure earnings quality and generate sustainable growth in the medium to long term.

The key initiatives in the medium-term management outlook plan are based on the tasks that remain outstanding from the previous global growth 2007 plan. For the core issue of developing its strategic business portfolio, it intends to focus on three policies:

allocating business resources more dynamically;
promoting strategic exits and asset recycling; and
accelerating the development and deployment of human resources (HR) within the group.

In pursuing these policies it will seek to create new growth models that leverage its business engineering capabilities, it will promote consumer businesses, and develop biomass ethanol, emission credits and other new energy and environment businesses.

In implementing its global strategy, it will strengthen strategic development in Asia as a part of strategies focused on the Americas, Europe and Asia and reinforce initiatives in Brazil and Russia while nurturing and developing HR globally.

In chemicals, the company intends to continue to trade on a global scale, while maintaining and strengthening its position. It plans to invest selectively, with a focus on strengthening its trading capabilities in the upstream and midstream sectors, and organising groups of specialists in specific areas in the downstream sector.

Its three main priority fields are automobiles, new energy business and flat panel display (FPD) components. In the automobile industry, it is investing globally in the resin and compounding businesses.

In FPD and other electronics, an area where rapid growth is expected, it is developing ways to utilise its supply chain management (SCM) and electronics manufacturing service (EMS) capabilities to become a “leading solutions provider”.

Outlook

In three to five years’ time Mitsui envisages achieving net income in the range of Y300bn to Y400bn, with return on equity (ROE) of 12 to 15% and total assets increasing to around Y10,000bn to Y11,000bn, with free cash flow turning positive from the year ending March 2009 as large projects under development come on stream.

For the year ending March 2008, the first year of the medium-term management outlook plan, it is targeting net income of Y240bn, ROE of 13.5% and net interest-bearing debt of Y3,000bn.

While making active investment, it also intends to increase capital efficiency by recycling around Y100bn to Y200bn of assets as part of an ongoing review of the value of all of its businesses.

ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.

A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.

See the article and analysis of the ICIS Top 100 on ICIS news.

Financial highlights: Mitsui year ended 31 March

Back to company overview page

Mitsui Company Structure

Mitsui & Co is a trading company with a portfolio that includes petrochemicals and polymers, speciality chemicals and plastics, fertilizers and inorganics. The company has reorganised its businesses into eight segments: chemical, energy, iron and steel products, iron and steel raw materials and non-ferrous metals, machinery and infrastructure, food and retail, lifestyle, consumer service and information, electronics and telecommunication and logistics and financial markets.
More about Mitsui Structure

News:

Get news on Mitsui plus the latest chemical news, information, data, market movements and analysis in one place with ICIS news

Search:

Find details on other chemical companies and suppliers with ICIS search

Newsletters:

ICIS offers a range of FREE e-newsletters to ensure that you don't miss out on the latest development and key market intelligence in your industry. If you want the latest news sent to your inbox, sign up for ICIS e-newsletters today.

Plants and projects:

Find out more about current and planned chemical plants and projects by subscribing to our comprehensive database