BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

2 Capital and Business Alliance with TomenIn March 2000, Toyota Tsusho concluded a capital andbusiness alliance with Tomen. With the automotive sectorat its core, Toyota Tsusho struggled to grow stronger inthe nonautomotive sector, and its motivations alignedwith Tomen, which was motivated to establish a morerobust management structure to further its businessopportunities. Forming an alliance would improve atToyota Tsusho the environment-, information-, andlifestyle-related businesses that Tomen specialized inand strengthen Toyota Tsusho’s opportunities in thenonautomotive sector.Of the third-party allotment of new shares totaling30 billion yen that Tomen scheduled, Toyota Tsushoassumed 7.5 billion yen worth and set five goals: (1)interaction of personnel including executive positions,(2) leverage of supplier and sales routes and other tradeareas, (3) exchange of information concerning industrytrends and other aspects of management, (4) pursuit ofother matters necessary to achieve the objectives of thealliance, and (5) establishment of an alliance council.All of Toyota Tsusho’s goals and its investment wereintended to expand the business management expertiseand management resources of each company.As the two companies looked for ways to enjoy themutual benefits of their business alliance council, inOctober 2000, Toyota Tsusho inherited part of themanagement of the Steel Products Sales Department ofTomen and its subsidiaries. This enabled Toyota Tsusho’sMetals Division to further leverage the capabilities ithad demonstrated to the Toyota Group companies andcultivate its nonautomotive customers.3 From Alliance to MergerThe positive effects of the alliance rose steadily. In2000, Toyota Tsusho acquired not only part of the ironand steel business of Tomen but also began sharingTomen’s chemical tanks in Thailand. In 2001, ToyotaTsusho started to share its food product warehousesat its Indonesian logistics company and its Houstonoffice in the U.S. with Tomen in an effort to improvethe efficiency of operations. Meanwhile, the companiessought to integrate their nonferrous metals businesses,textile machinery businesses, marine fuel oil businesses,and insurance businesses and to improve the efficiency ofthose businesses to expand them.The bond between the two companies deepened as aresult and they looked for ways to merge. The companies’shared aim was for their traditional businesses to take agreat leap. In addition, Toyota Tsusho believed that themerger would unify the management structure for quickerdecision-making, heighten the value chain by allocatingmanagement resources for overall optimization, andreduceprocurementcoststhroughcentralizedfunding.4 A New Departure via ManagementIntegrationAfter five years in the business alliance that startedin 2000, Toyota Tsusho and Tomen decided to integratetheir management. In February 2005, the two companieslaunched PROJECT-V and began to build a vision forthe future, starting with management integration in thefollowing year. Eight people from Toyota Tsusho andeight people from Tomen formed the group that beganplanning the integration. Toyota Tsusho introduced theToyota Tsusho Group Way policies and thereby initiateddiscussions about the fundamental philosophy and visualidentity (VI), including the Toyotsu Group slogan.Approval of a basic agreement for the merger wasarrived at in October 2005 and included agreement on themerger date, of April 1, 2006, and a merger ratio of OneToyota Tsusho share to Tomen’s 0.069. It was agreed thatToyota Tsusho would be the surviving company, but theemphasis was on a spirit of equality with regard to theSigning ceremony for capital and business alliance with Tomen (2000) Merger with Tomen (2006)122