New Year's Greeting

Happy new year everyone!

To the employees of the Toyota Tsusho Group all around the world and to all their family members, I extend to you the warmest of greetings upon the start of 2019.

In welcoming the new year, I would like to talk about my request to all of you for this year while looking back on last year.

Starting off with looking back on last year, after the baton of president was passed to me in April, I made effort to talk with the people of as many genba as possible, with our customers in Japan and overseas, and with employees of our corporate group.

Upon doing so, I was able to once again confirm the high level of distinctively Toyota Tsusho value-added work being carried out with honest attention paid to safety and quality of service at various genba. I was deeply moved by everyone's positive outlook, which unveiled itself to me through such things as the many questions and opinions I received.

I would like to continue visiting many genba and talking with many people this year, as well.

Now, regarding the business environment surrounding us, Japan's economy, with increased exports and other elements, continued to recover, while, among developed countries, the economies of the United States and Europe generally shifted toward a sound footing. In emerging countries, signs of recovery continued, with improvement in business confidence due to rallies in the prices of resources and primary commodities.

On the other hand, with occurrences such as trade frictions spurred by nationalistic and protectionist trade policies worsening and affecting the world economy, and with U.S. monetary policy triggering instability in the currencies of emerging countries, risks became heightened. This made it a year in which concerns began to surface about how our businesses could be negatively affected.

Large factors of concern continue for 2019, such as worsening U.S.-China trade friction, Brexit-linked chaos in the European economy, and risks related to political situations in the Middle East.

Looking at the world of industry, technological innovation, such as in the form of AI and IoT, is accelerating its advance in all industrial sectors. Among other developments, the fact that IT-related companies, characterized by GAFA (Google, Apple, Facebook, and Amazon), accounted for the greater number of the world's top 10 companies in terms of highest aggregate market value last year is testament to the changing times.

For example, even in the automotive world, which is one of our main battlegrounds, we have seen the birth of new inter-industry alliances with digital-technology companies. It was a year in which I became acutely aware that it will become extremely difficult for our company to continue the growth we have achieved thus far by relying solely on our conventional way of engaging in business.

On other fronts, there were continuous news reports about companies in Japan being suspected of violating the law, fraudulence stemming from the falsification of data on quality, and other similar issues. I ask that you apply yourselves to your daily work with faithfulness and sincerity, keeping in mind that everything we do needs to begin with ensuring safety and with ensuring compliance with rigorous standards of corporate ethics. Whether it be for meeting the expectations of our customers or for making profit, deviation from the rules is never permitted.

I want everyone to once again take to heart that our being an organization that can regulate itself is what will enable us to give meaning to our corporate philosophy of aiming to "be a value-generating corporation that contributes to the creation of prosperous societies".

Next, I would like to share with all of you my requests.

Following our company's large deficit three years ago (for the year to March 31, 2016), we achieved a complete turnaround by focusing on securing reliable profitability in projects, making the most of our expenditures, and avoiding waste, and, for the current fiscal year, as well, we are maintaining healthy progress toward achieving our target of 140 billion yen in profit attributable to owners of the parent, bringing into sight three consecutive years of record-high net income.

However, the profits we are now achieving are the results of the investments and sales efforts made in the past. I have a severe sense of crisis regarding the possibility that, if we are unable to adeptly respond to the enormous changes in the environment surrounding us, not only will growth become dull, the only thing that will be waiting for us is decline.

Against such a backdrop, the first thing that I would like you to do is to cherish what it is that defines our Toyota Tsusho distinctiveness and to pursue new heights.

When I talk about our Toyota Tsusho distinctiveness, which has been built up over the years, I am referring to the traits of Toyota Tsusho we acquired as we grew, as we aimed to become a global company, and as a member of the Toyota Group. It is a distinctiveness based on our desire to approach our customers and to "Be the Right ONE" by the sweat of our brows.

The second thing that I would like you to do is to promote digitalization and globalization.

When it comes to digitalization, I want you all to have a sense of curiosity about new technologies and to go to genba and learn, so that you can think about how to apply digitalization to your work.

For us, 2019 is the first year of our digital transformation. With full participation by all employees, let us advance our digitalization.

As for globalization, it is necessary to accelerate regional business creation that focuses on region-specific needs. To do so, it is extremely important to advance autonomy for regional and local self-regulation, to further self-reliance based on self-initiative, and to give play to diverse personalities, skills, and ways of thinking, in other words, to promote Diversity & Inclusion.

In the promotion of digitalization and globalization, I ask all members of management to take the initiative, to lead to the best of your abilities, and to pull your teams forward. I ask members of the millennial generation and those in the middle who form the backbone to be responsible for the core and to heighten the added value of your work. And I ask the so-called "digital natives" to substantially make proposals based on your own sensibilities and ideas.

With courage in hand, let us take up the challenge of trying something new, even on a trial basis, for the creation of our next businesses.

I want each of you to view the various changes facing you as opportunities, and I want you to engage in the pursuit of Toyota Tsusho distinctiveness and in digitalization and globalization with the mind-set that change is not to be feared, but to be enjoyed and created.

In closing, please let me wish all of you and your families a year full of smiles and happiness.

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