Happy New Year! I extend my best wishes to all of you at Toyota Tsusho companies worldwide and to your loved ones. As in previous years, I will also reflect here on the past 12 months and express my expectations of you in the coming 12 months.

Improvement continued in the world economy overall in the past year. Emerging economies benefited from a recovery in prices for natural resources. In the industrialized nations, economic growth continued in North America and Europe, and economic recovery continued in Japan, led by export growth.

The economic outlook remains favorable in 2018. China is poised to achieve stable growth, and firming prices for primary commodities bode well for recovery in emerging economies. Growth momentum is taking hold, meanwhile, in the industrialized nations.

As always, the economic landscape is fraught with uncertainty, including the potential for geopolitical developments that could undermine economic vitality. Provocations by North Korea are a persistent concern. The progress and pattern of the United Kingdom’s Brexit detachment from the European Union are another variable. We also need to be alert to the possible ramifications of protectionist moves by the US government under the Trump administration.

Especially troubling in Japan are the recent revelations of misrepresentation and even legal infractions in connection with product quality at several manufacturers. Among those manufacturers are some with which we do business. We pray for a swift resolution of the problems and restoration of the companies’ reputations. At the same time, we need to take this series of unfortunate incidents as a reminder of the importance of unwavering vigilance.

Let us recognize anew that everything we do needs to begin with ensuring safety and with ensuring compliance with rigorous standards of corporate ethics. Let us recognize, too, that even seemingly minor transgressions can become major problems and therefore warrant careful attention. In working to ensure ethical compliance, let us adhere to the principle of bad news first and fast. Let us shape a corporate culture where any problem becomes an issue for all of us to tackle and resolve together promptly.

We also need to position our company to thrive amid the technological advances that are transforming every industry. Technological progress in such realms as artificial intelligence and the Internet of Things has proceeded faster than most of us expected. It is occasioning epochal change in our largest business domain, the automotive sector.

European governments and the Chinese and Indian governments are moving, for example, to mandate a shift to electric-powered vehicles and to position their nations in the vanguard of electric vehicle technology. Automated-driving technology is also developing rapidly and is eliciting competition from companies, not traditionally associated with the automotive sector.　Sharing, too, is changing the competitive dynamics of the automobile industry.

We are on the cusp of a second-consecutive year of record earnings. Coming off a huge after-tax loss in the fiscal year ended March 31, 2016, we achieved a dramatic turnaround. We posted record earnings in the fiscal year ended March 31, 2017, as you devoted redoubled emphasis to our business fundamentals: securing reliable profitability in projects, making the most of our expenditures, and avoiding waste. And our gratifying first-half results in the present fiscal year suggest that our full-year earnings will exceed last year’s.

Our resurgence last year encompassed several proactive undertakings and unfolded under the slogan Moving On. We launched the NEXT Technology Fund to help foster new technologies and new products in diverse sectors. We moved beyond our traditionally product-focused divisional structure, meanwhile, and established our first geographically focused business unit, the Africa Division. And we inaugurated the NEXT Mobility initiative to spearhead our response to the transformative change under way in the automotive industry. That initiative straddles the pertinent business divisions and comprises a total of some 150 members.

I am counting on you to help make the most of our ongoing initiatives in furthering our business momentum. That will mean building on distinctively Toyota Tsusho strengths. We have reaffirmed those strengths and our growth priorities in the newly updated Management Mission Statement, released in November 2017.

Distinctively Toyota Tsusho strengths include, of course, capabilities born of traditional trading-company functions. Those capabilities center on the capacity for grasping customer needs through on-site interaction in trading business and operational management. They position us to provide behind-the-scenes assistance for customers through expertise, effort, and hands-on commitment.

Our distinctive strengths also include traits that we have acquired through globalization and through acquisitions and other investment activity. Another source of distinctively Toyota Tsusho strengths is our affiliation with the Toyota Group. We have nurtured those strengths by crossbreeding insights gleaned inside and outside the Toyota Group, and we have applied them fostering new business through a positive spiral of value creation.

Our task is to translate distinctively Toyota Tsusho strengths into robust and sustainable, Toyota Tsusho-like growth, into what we are calling a Distinctively Toyota Tsusho Group Surge. The operating environment will continue, of course, to present unavoidable challenges. What we need to do is minimize the impact of adverse developments in the operating environment and maximize the benefits posed by those developments. Each of us needs to be alert to opportunities and be prepared to bring distinctively Toyota Tsusho strengths to bear in capitalizing on those opportunities. That needs to include cultivating new strengths based on and adapted to advances in technology.

We mark the 70th anniversary of our company’s founding on July 1. Let this year occasion the growing business momentum of a Distinctively Toyota Tsusho Group Surge. And let this year be a richly rewarding 12 months for you, your family members, and your friends.