[Company analysis] Sojitz Corporation (双日)

「Sojitz Corporation (双日)」is one of the largest general trading companies in Japan and they specialized in non-resourse field. Even though they are not included in the five largest Japanese trading companies(「Mitsubishi Corporation(三菱商事)」,「Sumitomo Corporation(住友商事)」,「Mitsui & Co., Ltd.(三井物産)」,「Itochu Corporation(伊藤忠商事)」and「Marubeni Corporation(丸紅)」). In the commercial aircraft sales business, they have the top market share in Japan, and in the automobile field, they have the second largest net sales after「Toyota Tsusho Corporation(豊田通商)」The number of consolidated employees is approximately 18,793.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Sojitz Corp.
Company name (Japanese)	双日
Date of establishment	Tuesday, April 1, 2003
Headquarters location	〒100-8691 東京都千代田区内幸町2-1-1
Capital	160,339
Consolidated sales	1,856,190
Consolidated operating profit	94,882
Consolidated total assets	2,297,059
Consolidated capital	661,607
Capital adequacy ratio	28.8%
Consolidated number of employees	18,793

 

 

 

2. Summary and Features

 
As a general trading company, 「Sojitz」is carrying out business in a very wide range of fields from automobiles, aerospace, metals, resources, energy, social infrastructure, chemistry, consumer goods, and food products. The current「Sojitz」was formed by the business integration between「Nissho Iwai Corporation(日商岩井株式会社)」and「Nichimen Corporation(ニチメン株式会社)」in 2004. At the time of the business integration, both company names included the Japanese word "Sun", so they decided new company name as "Sojitz", which means the twin sun.

Among them, the origin of「Nichimen」is closely related to the cotton spinning business promoted by the Japanese government during the Meiji Restoration period. At that time, the Japanese government initiated cotton spinning business as a means of developing modern industry. The problem was, there was a high risk in cotton imports, because it was monopolized by limitied number of companies. To overcome this, they established new trading company in Osaka in 1892, and its name was「Japan Cotton Trading Co., Ltd.(日本綿花株式会社)」, the predecessor of「Nichimen」. Since its establishment,「Nichimen」continued to expand its business, eventually they were able to handle not only to cotton, but also to flour, starch production, steel, electronics, and automobiles.

As for the「Nissho Iwai Co., Ltd.」, it was established by the merger of「Nissho Company」and「Iwai Sangyo Company」in 1968. 「Nissho」was a company founded in Kobe in 1902. At the time of its begining, it specialized in sugar trade, but soon it started to handle wheat, steel, tobacco, beer, insurance, shipping and shipbuilding. 「Iwai Sangyo」started steel trading since its establishment in 1901 and has grown as a metal and machinery trading company. Under the direction of the Japanese government, in 1968, the two companies had an equal merger. Then, they are conducting business centering on industrial projects such as LNG and steel.

Currently,「Sojitz」has approximately 440 subsidiaries and affiliates in Japan and around the world. Especially in Asia and North America, they are conducting automobile assembly and sales business for「Suzuki Motor Corporation(スズキ)」,「Mitsubishi Motors Corporation(三菱自動車工業)」,「Subaru Corporation(スバル)」,「Hyundai)」and「Isuzu Motors Ltd.(いすゞ自動車)」. In addtion,「Sojitz」is also Japan's largest commercial aircraft distributor, acting as an agent for「Boeing」,「Bombardier」and「Ruag Space」in Japan.

This company also handles airport-related monitoring systems used for baggage inspections, and it also carrys out a part-out business for aircraft. In other words, they purchase aircraft not for operation purpose but for dismantling and selling the parts. Besides, by taking advantage of the aviation industry sector, they are also involved in the hotel business around the airport. 「Sojitz」has overwhelming presence in the aviation business and it is a unique feature of this company, which is different from other general trading companies.

 

 

 

 

3. Major Business

 

■ Automobile business 
They carry out automobile assembly and sales business in Asia and North America.

■ Aerospace business 
They are acting as an agent for「Boeing」,「Bombardier」,「Ruag Space」etc. in Japan. In particular, they have a cooperative relationship with「Boeing」for more than half a century, and they have an 85% share of the civil aviation market in Japan.

■ Metals and Resources Division
This company has the top share in the coal import business from Russia and Indonesia, and is also the top class sales in Japan for ferroalloys, rare metals and iron ores.

■ Energy and Social Infrastructure Division
They are engaged in oil development projects and onshore gas pipe development projects in the US Gulf of Mexico. In the field of power generation, they are participating in power generation projects around the world such as Vietnam and Sri Lanka.

■ Chemical department
In the rare earth business, they boast the highest handling volume in Japan. They also carry out cosmetics business through their own brand. In 2017,「Sojitz」acquired a German chemical company to strengthen its methanol supply.

■ Living industry sector
They also sell consumer goods such as casual shoes, surfboards and bags. In particular, they have been a business partner since the establishment of「Nike」in 1972. 

■ Food and agriculture
Their grain business handles approximately 30,000 tons of wheat from the United States, Canada and Europe each year. In September 2008, they became the first general trading company to enter the tuna aquaculture business. In the tobacco business, they also have exclusive import and distribution rights for「Philip Morris」.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated revenue		1,555,349	1,816,459	1,856,190
Consolidated net income		44,075	61,694	94,882
Consolidated total assets		2,138,466	2,350,351	2,297,059
Consolidated net assets		577,970	625,124	661,607
Breakdown of sales	Automobile business	144,259	188,118	242,499
	Aviation industry・Information business	88,552	75,414	0
	Aviation industry・Transportation infra business	0	0	27,811
	Environment・Industrial infra business	114,355	134,737	0
	Machinery・Medical infra business	0	0	107,010
	Energy business	47,464	56,604	0
	Energy・Social infra business	0	0	74,791
	Coal・Metal business	260,716	324,081	383,170
	Chemicals business	399,799	515,601	505,101
	Food・Agriculture business	138,117	143,283	128,293
	Retail・Living business	285,791	292,462	317,373
	Industrial infra・Urban development business	28,779	45,884	33,267
	Others	47,511	40,270	36,871