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We are pleased to share the 2025 New Year’s Greetings of Yoshiya Miyabe, President & CEO of Kanematsu Corporation, to all Kanematsu Group employees.
 

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A Happy New Year to everyone at Kanematsu and the Kanematsu Group.

I hope you all had a great time during the longer-than-usual New Year’s holidays.
As we welcome the year 2025, I would like to look back on 2024 and then talk about the Kanematsu Group’s initiatives for 2025.

Looking Back on 2024

First, let’s look back on the global situation in 2024. The OECD forecast of 3.2% global economic growth turned out to be correct, as the economy maintained resilience throughout the year.

However, it was also a year of accelerated global fragmentation and heightened geopolitical risks, with the prolonged war in Ukraine as well as tension in the Middle East. In this global environment, the Nikkei stock average reached a record high of 42,226 yen in July and remained strong thereafter despite some turbulence in August.

Meanwhile, it was a volatile year for the Japanese yen, with the currency falling to 161 against the dollar in July. Although it recovered to 139 against the dollar in September, it has recently been depreciating again.

The second Trump administration will begin on January 20 in the U.S. This will impact the situation in Ukraine and the Middle East, and is also expected to add complexity to the security environment in East Asia, including Japan, South Korea, and Taiwan.

The upcoming Trump administration intends to raise tariffs as part of its trade policy, leading to deepening concerns over trade friction. Depending on how this plays out, we may be forced to review our business model and supply chain.

I ask everyone to remain attentive to the global situation and U.S. trade policy.

Medium-Term Management Plan “integration 1.0”

Kanematsu has launched the new medium-term management plan “integration 1.0.” The business plan lays out our medium to long-term goal for the period following the three-year plan to become a “solutions provider leading the transformation of efficient and sustainable supply chains.” To this end, under “integration 1.0” we aim to achieve net profit of 35 billion yen by focusing our efforts on promoting integrated management across the Group, enhancing our value proposition, and strengthening human capital.

Our basic policy is to further strengthen the ICT solutions business, the strong point of our Group, actively share information between diverse business fields, and provide solutions in areas such as DX, GX, and innovation to our 20,000 invaluable business partners.

Let’s look at some specific initiatives that were carried out in 2024, which was the first year of the business plan.

DX-related initiatives

In April we jointly established the “Nippon Cyber Security Fund 1 Investment Limited Partnership,” the first fund in Japan to specially invest in security companies, with WERU Investment, KEL, and Global Security Experts. Additional 13 companies invested/participated in the fund in July, making it one of the largest players in the Japanese cyber security industry. Going forward, the fund is expected to significantly contribute to the business development of our Group.

GX-related initiatives

We are driving GX and sustainability-related initiatives in our existing businesses and together with our business partners.

Our acquisition of ISCC PLUS certification, an international certification system for sustainable products, last year has enabled us to handle ISCC-certified biofuels and biomaterials. In April, we entered into a basic agreement with Denmark’s Danish Crown to promote the sale of sustainable pork products in the Japanese market. To address global warming, we also entered into a partnership agreement with Green Carbon, Inc. for reducing rice paddy methane emissions and promoting the distribution of environmentally friendly rice.

In July, we teamed with green/agri-tech startup TOWING toward spreading Soratan, a form of high-performance biochar, in Japan and the U.S. KG Agri Products, Inc. (KAPI) conducted a world-first trial of Soratan at a soybean test field that it owns in the U.S. Additionally, the environmentally friendly “LIMEX Aqua Jet Label” was officially adopted as printing paper for Epson-manufactured label printers.

In September, we concluded a memorandum of understanding for the joint promotion of GX-related initiatives with Indonesia’s Cimory Group, one of our strategic investments. We are considering to adopt the optimal solutions for Cimory in areas such as renewable energy, energy-saving, and fuel consumption reduction systems.

Capital policy-related initiatives

We implemented an offering of shares in October.
This is a transaction where shares owned by existing shareholders are sold to investors through a public offering. Through this offering, shares previously held by our banking partners equivalent to 7.8% of shares outstanding were purchased by Japanese and foreign investors.

In recent years, the revision of cross-shareholdings in light of the Corporate Governance Code principles and other initiatives has become a rapidly growing trend in the capital market.

We are working on the reduction of cross-shareholdings as an important measure to enhance our corporate value. In June 2024, we announced our policy to reduce cross-shareholdings.

After discussions with our banking partners, we decided to implement the offering of shares to enable our company to restructure its shareholder composition proactively while providing our banking partners with an opportunity for a smooth sale of shares.

Furthermore, we are methodically reducing the cross-shareholdings we hold in accordance with the policy announced last year. We aim to improve our capital efficiency by allocating cash inflows from the reduction of cross-shareholdings towards growth investment and shareholder returns.

Strengthening of human capital and activities for enhancing engagement

Last summer we conducted a survey on employee engagement, which is one of the KPIs for human capital.

In addition to a company-wide analysis to identify our strengths and issues, we carried out division and department-specific analyses based on the survey results. I ask you to hold meaningful discussions within your division or department so that you can understand the strengths and issues of your organization and proactively address the issues. Through these efforts, I hope we can build momentum for improving employee engagement across the entire company.

Since last April, we have been carrying out the culture design project “TANEMATSU” toward enhancing engagement. We have been holding workshops, as well as sharing interviews with officers and employees on the corporate portal site. From this month through March, we will be fleshing out the values and missions of “Kanematsu Persons.”

As this is a vitally important activity that will shape the guiding principles for Kanematsu in the future, I ask everyone, irrespective of age or position, to take part in it.

Last November, as one of the events to commemorate our 135th anniversary in August 2024, we held the Kanematsu Group Sports Festival for the first time in a decade. Taking place at Tokyo Big Sight, the festival was a great success with as many as 1,700 participants.

We plan to hold events to commemorate our 135th anniversary in Osaka, Nagoya, Hokkaido, Kyushu, and other regions too.

Business results

First-half net profit was 15.1 billion yen, up 23% from 12.3 billion yen in the previous year. Following these results, we revised our full-year net profit forecast upward from 25 billion yen to 27 billion yen. Let’s give it our utmost in the remaining three months to achieve our target.

In Conclusion

The year 2025 is expected to bring even more uncertainty to the global situation than 2024. Even in such an environment, the entire Kanematsu Group will work as one to create a structure and organization that will enable sustainable growth.

To this end, I ask everyone to keep the following points in mind:
No. 1: Act proactively and never stop gathering information.

I ask you to see and hear things firsthand, gather information from multiple perspectives, and cultivate your ability to predict what will come next. We have a broad network, both within and outside our Group, from which you can obtain live information –– it would be a waste not to use it.

No. 2: Don’t give up easily.

With any project, there are always going to be obstacles in your way. I ask you to have the strong resolve to overcome any obstacles that may present themselves. Our group is characterized by a culture of helping and supporting one another to overcome challenges.

Don’t face it alone –– share knowledge with your seniors and colleagues, and you will always find a breakthrough.

By putting these actions into practice, you will invariably improve your skills as an individual. The improvement of skills at the individual level is the foundation for growing the capabilities of the Group as a whole.

Let’s make consistent achievements toward reaching a net profit of 35 billion yen in FY2027, the final year of the medium-term management plan.

Finally, I would like to conclude my New Year’s greetings by wishing for the health and success of all of you at the Kanematsu Group in Japan and around the world, as well as your supportive families.

Thank you.

President & CEO Yoshiya Miyabe
Kanematsu Corporation