[Company analysis] Mitsubishi Corporation (三菱商事)

「Mitsubishi Corporation (三菱商事)」is developing various businesses through 1,400 consolidated operating companies in 90 countries around the world. This company 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)」) . As a Japanese general trading company, 「Mitsubishi Corporation」has the largest sales and profits. It is alsom tthe core company of the Mitsubishi Group. The number of consolidated employees is approximately 79,994.

 

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	Mitsubishi Corporation
Company name (Japanese)	三菱商事
Date of establishment	1918
Headquarters location	〒100-8086 東京都千代田区丸の内二丁目3番1号
Capital	204,446
Consolidated sales	16,103,763
Consolidated operating profit	1,987,811
Consolidated total assets	16,532,800
Consolidated capital	6,636,920
Capital adequacy ratio	40.1%
Consolidated number of employees	79,994

 

 

 

2. Summary and Features

 
The origin of「Mitsubishi Corporation」was「Kaientai(海援隊)」, which was formed by Sakamoto Ryoma(坂本龍馬) in 1865. It is said to be Japan's first corporation. After that, it was changed to「Tsukumo Trading Company(九十九商会)」by Iwasaki Yataro(岩崎弥太郎) and this is the start of「Mitsubishi group」. From the Taisho era to the First World War, they expanded their products variation dramatically. In 1918, their trading department became independent and current「Mitsubishi Corporation」was established.

Just like「Mitsui & Co., Ltd.」, after World War II, 「Mitsubishi Corporation」was target of the dissolution by GHQ, and eventually it was divided into 174 companies. However, after that, due to the relaxation of the restrictions on the activities of the former conglomerates, they were consolidated into three companies,「Fuji Shoji(不二商事)」,「Tokyo Trading(東京貿易)」, and「Tozai Trading(東西交易)」. At last,「Mitsuwa Jitsugyo」 took the trade name of 「Mitsubishi Corporation」, and absorbed the above three companies in 1954, so that「Mitsubishi Corporation」finally returns.

Although it is not well known in Japan,「Mitsubishi Corporation」is one of the five major general trading companies that is most closely associated with South Korea. Especially in the 1960s, in order to make the Korean industry as a subcontractor of Japan and make it a foothold for exports to the United States, they cooperated with Korean light industrial companies. Through this, the sales of「Mitsubishi Corporation」, which was only about 1 trillion yen until 1963, exceeded 2 trillion yen in 1965, 3 trillion yen in 1969, and 4 trillion yen in 1970. Achieving rapid growth, 「Mitsubishi Corporation」became the top of the five major general trading companies in Japan.

However, until this time, their core business was trade intermediation from「Mitsubishi Heavy Industries, Ltd.(三菱重工業)」 and「Mitsubishi Motors Corporation(三菱自動車工業)」. But from the 1970s, this company started to direct investment on resource development such as natural gas. In the 1980s, they built a supply chain for food distribution through「Mitsubishi Shokuhin Co., Ltd.,(三菱食品)」 and from the 1990s, through the convenience store chain 「LAWSON, INC.」, they entered into the general consumer market. the more they expand their business area, the more they expand their sales and profits.

The strength of「Mitsubishi Corporation」is said to be "comprehensive strength", and it has built a relatively stable management base in various fields. In resource field,「Mitsubishi Corporation」has overwhelming presence. This comapny is in charge of supplying 10% of LNG demand in Japan, and it is the world top supplier to the coal business. At the same time,「Mitsubishi Corporation」has a high level of dependence on resource business, their business performance tends to be easily affected by price fluctuations. In order to overcome this, current goal of「Mitsubishi Corporation」is to reduce the sales dependence on resource business under 30%.

 

 

 

3. Major Business

 

■ Energy business
They mainly handle oil and natural gas.  In 2014. To enhance this business,「Mitsubishi Corporation」established LNG plant design company in Canada, in collaboration with「Royal Dutch Shell」.

■ Metal business
They handle metal resources(coal, copper, aluminum) and steel products. They currently own the world's largest copper mine in Chile, South America. 

■ Global environment and infrastructure business
They carry out electric power business(thermal power / wind power), infrastructure business(FPSO / airport operation / water business), and environmental business(photovoltaic battery-related / electric power trading, etc.).

■ New business / financial business
They also handle corporate investment, leasing, real estate, urban development, and logistics. In 2011, they jointly invested with two major airlines and established LCC,「Jetstar Japan Co., Ltd.」

■ Machinery business
They handle industrial machinery (elevators, construction machinery, etc.), ships, aerospace products, and automobiles (mainly for「Mitsubishi Motors Corporation」and「Isuzu Motors Ltd.(いすゞ自動車)」).

■ Chemical business
They also handle petrochemicals, basic price products(alkali, alcohol, inorganic chemical fertilizers) and life chemistry(food chemistry, etc.).

■ Living industry business
They handle food ingredients, retail business, and medical business.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated revenues		6,425,761	7,567,394	16,103,763
Consolidated gross profits		1,328,638	1,886,640	1,987,811
Consolidated total assets		15,753,557	16,036,989	16,532,800
Consolidated net assets		5,789,011	6,265,211	6,636,920
Breakdown of consolidated revenues	Global environment and infrastructure business	38,013	38,140	43,679
	New business / financial business	60,195	49,949	43,771
	Energy business	37,663	55,711	83,437
	Metal business	414,766	452,804	501,971
	Machine business	182,061	195,593	214,322
	Chemicals business	112,976	116,154	119,146
	Living industry business	473,224	971,796	974,505
	Others	7,850	7,081	6,807
	Adjustments	1,890	-588	173