[Company analysis] Itochu Corporation (伊藤忠商事)

「Itochu Corporation (伊藤忠商事)」is a  general trading company headquartered in Osaka Prefecture. And it is 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 2017 Fortune Global 500, this company ranked 215th. The products that「Itochu」handles are more familiar to general consumers than other general trading companies. The number of consolidated employees is approximately 102,086.

 

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	Itochu Corp.
Company name (Japanese)	伊藤忠商事
Date of establishment	1858
Headquarters location	〒107-8077 東京都港区北青山2丁目5番1号
Capital	253,448
Consolidated sales	11,600,485
Consolidated operating profit	361,492
Consolidated total assets	10,098,703
Consolidated capital	3,690,116
Capital adequacy ratio	36.5%
Consolidated number of employees	102,086

 

 

 

2. Summary and Features

 
The history of「Itochu Corporation」goes back to May 1858, when Ito Chubei(伊藤忠兵衛) and his brother Ito Chobei(伊藤長兵衛) started door-to-door wholesaling of linen. In other words,「Itochu Corporation」shares the same origin with「Marubeni Corporation」. Before the World War II, cotton spining was the core business for 「Itochu Group」.

Until this era, the sales of spinning business was huge, and「Itochu」was the largest spinning trading company in the world. Since the First World War, they have been handling machinery, automobiles, metal, etc. However, beginning of the World War II, all operating business of「Itochu」became war-oriented. So after the war, this company was the subject of conglomerate dismantling by GHQ.

However, soon after the Korean War broke out, this company was in charge for supplying the UN army with oil, aircraft, automobiles, and machinery, so luckly,「Itochu Corporation」succeeded in rebuilding. From the latter half of the 1960s, they actively carried out overseas mining and oil exploration, and begin to enter various business fields. Even now,「Itochu」has many leading companies under their group. Especially, they have advantages in food, daily life materials, information and communication, insurance, finance and general non-resource business fields.

At present, the non-resource business accounts for 83% of total sales, especially consumer products has largest portion. They also have investment portfolio and rights about fashion brands such as「Converse」,「Hunting World」,「LeSportsac」,「Mila Schön」and「Paul Smith」. In this way, 「Itochu」handles businesses that are familiar to the general consumer, that is the reason this company is very popular for job hunters. As of 2020 standard, they are more popular than even「Ajinomoto Co., Inc.(味の素)」or「JTB」.

In the automobile division, this company is acting as an import agency for「Yanase」. and in the infrastructure ㅠㅕbusiness, they have formed partnerships with「Toshiba Corporation(東芝)」and「Hitachi, Ltd.(日立製作所)」, in order to establish Vietnam's first highway in Hanoi.

 

 

 

3. Major Business

 

■ Textile business
It has been a core business since its founding, and handles clothing, fashion miscellaneous goods, etc. Currently, it has the largest sales scale in the industry, and is characterized not only by developing old American brands in Japan but also by developing and selling clothing in-house.

■ Food business
They participate in all processes from raw material procurement to distribution.

■ Housing life and information business
They carry out distribution business of wood, paper, glass, cement, etc. They also carry out mobile phone sales and real estate business, and also provide services to introduce overseas real estate information to Japanese companies.

■ Machinery business
They handle plants, infrastructure related projects, ships, aircraft, automobile distribution, etc.

■ Metal business
They are focusing not only on the development of metal and mineral resources and the steel processing business, but also on the development of new energy sources such as solar power generation and biomass.

■ Energy / Chemical business
In the crude oil and natural gas development project, they carry out trade intermediaries, such as chemicals and synthetic resins.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated revenue		4,838,464	5,510,059	11,600,485
Consolidated operating profit		288,399	316,933	361,492
Consolidated total assets		8,122,032	8,663,937	10,098,703
Consolidated net assets		2,662,811	2,984,351	3,690,116
Breakdown of sales	Textile business	528,050	522,427	593,553
	Machinery business	361,945	722,774	1,222,821
	Metal business	209,286	229,661	666,109
	Energy / Chemical business	1,426,409	1,576,750	3,124,420
	Food business	1,071,299	1,149,176	4,290,792
	Housing life and information business	548,125	594,420	890,057
	Information・Financial business	669,713	697,187	728,043
	Others	23,637	17,664	84,690