innovation & corporate development segment - mitsui & corporate development segment business...

Innovation & Corporate Development Segment

Business Portfolio

ICT business, featuring added value

unique to Mitsui•High-speedInternetinfrastructurebusinessin

emergingeconomies

•Operationofserviceplatformsandservicebusiness,

includingmarketing

•BroadcastingservicesandTVshoppingbusiness

•IoT

•SI,cybersecurity,andcloudservicebusiness

Expanding into new areas by utilizing fi nancial

and logistics expertise to evolve our business•Assetmanagement,leasingandinsurance

•Buyoutinvestmentandventureinvestment

•Commodityderivativesandprovisiontoclientsand

groupcompanieswithhedgingtoolsforpricefluctuationrisks

ofcommodities

•Logisticscenterbusinessincludingwarehousinganddelivery

centersandtheestablishmentandproposaloflogisticsstrate-

giesforclients

Risks and Opportunities

Emerging economies expecting

high growth and new business

Emergingeconomiesareshowinghighgrowthpotentialinthe

ICTbusinessfield,particularlyincommunicationsinfrastructure,

whereexpandedinvestmentisexpected,aswellasintheservice

businessindustry,whichhasalsoseenashiftininvestment.In

addition,suchthingsashigh-speedInternetinfrastructureand

TVshopping,bothwidespreadindevelopedcountries,aregrow-

inginemergingeconomies.

Creating business by capturing ICT innovation

and a change in business model

Therapiddeploymentofsmartphonesandtabletsandtheevo-

lutionofICTinfrastructure,suchascloudcomputing,aredriving

thecreationofavarietyofnewbusinessesthatutilizeIoT

(InternetofThings)andBigData.Businessenvironmentsare

changingrapidly,andasaresult,thereisaneedtotakeswift

actionastechnologicalinnovation,aswellasnewservicesand

businessmodels,leadsthewaytowardanext-generationsociety

inwhichadvancedICTservicesandtherealeconomyareclosely

linked,asdemonstratedbytheoptimalcontrolofinfrastructure.

Expansion of global asset

management business

Giventherecenttrendinwhichcountriesaroundtheworldare

implementingmonetaryeasinginitiativesandenhancingtheir

legalframeworks,Mitsuiisexpandingitsrealestateassetman-

agementbusiness,combiningtheknowledgeoftherealestate

andfinancebusinesses,inbothdevelopedandemergingecono-

miesaroundtheworld.

Supporting corporate growth through the provi-

sion of management know-how and risk capital

Buyoutfundsandotherprivateequityfunds,whichprovide

managementknow-howandfunding,areplayinganincreas-

inglyimportantroleinsupportingcorporategrowth.Moreover,

fromtheviewpointofinstitutionalinvestorslookingtodiversify

investmentriskandinvestmenttargets,privateequityfundsare

expectedtocontinuetobeanattractiveassetclass.

Continued diversifi cation of global logistics

needs due to growth in consumer markets in

emerging economies

WhilelogisticstoandfromJapanaredeclining,intraregional

logisticsandlogisticsinfrastructureareexpectedtoexpand

amongemergingcountriesastheireconomiesandconsumer

marketsgrow.Furthermore,duetothediversificationofcon-

sumerneeds,thereisaneedforvalue-addedlogisticsservices.

IT&CommunicationBusinessUnit CorporateDevelopmentBusinessUnit

ExecutiveManagingOfficer,

ChiefOperatingOfficerof

IT&CommunicationBusinessUnit

NobuakiKitamori

ExecutiveManagingOfficer,

ChiefOperatingOfficerof

CorporateDevelopmentBusinessUnit

YasuyukiFujitani

BusinessOverview

MITSUI&CO.,LTD.ANNUALREPORT201660

Strengths

•Creationofbusinessmodelsthatleverageournetworkof

strongdomesticandoverseaspartners

•DevelopmentofnewbusinessareasthatleverageourcoreICT

subsidiariesandourresultsinventureinvestment

•Nurturingofhumanresourcesinmanagement,investment,

andriskmanagement

Updates of Current Medium-term Management Plan

Participation in TV shopping business in India

InOctober2015,Mitsuicompletedanadditionalinvestmentin

NaaptolOnlineShoppingPrivateLimited(Naaptol),whichoper-

atesaTVshoppingbusinessinIndia(Mitsui’scurrentshareis

approximately25%).Naaptolisaleadingcomprehensivehome

shoppingbusinessoperatorinIndia,whichmanages24-hourTV

shoppingchannels,merchandisingthatleveragesadvertising

networksande-commerce.

TheTVshoppingmarketinIndiaisexpectedtogrowatan

annualaveragerateof45%,anditwillreach¥500billionin

marketsizeby2020.Inthisbusinessenvironment,wedeliver

high-qualityproductstoourcustomersthroughNaaptol,which

supportstheoperationofmultilingualTVshoppingandnation-

widelogisticsnetworks,basedonourknow-howandexpertisein

TVshoppingbusinessesinJapanandChina.

Investment and participation in company

that develops and sells IoT data

management software

Mitsuihasenteredintoastrategicbusinesspartnershipwiththe

U.S.companyOSIsoft,LLC(OSIsoft),whichdevelopsandsells

IoT/M2M(MachinetoMachine)datamanagementsoftwarefor

industrialcustomers.Additionally,inMarch2016Mitsuiacquired

anequitystakeinthecompany.Recently,thereisagrowing

needforoptimizedoperationsthatleverageevenmore

sophisticateddataanalysisandvisualizationaswellas

innovationsinbusinessmodels.PISystem,adatamanagement

infrastructuredevelopedbyOSIsoft,hasahighlevelversatility

thatcancentrallymanageavastamountofoperationaldata,

workingtoimprovecustomers’operationalefficiency,quality,

andsafety,aswellassupporttheirstrategicdecisionmaking.PI

Systemhasbeenintroducedatover1,000electricandutility

companiesaswellasat95%ofmajoroilandgascompanies

aroundtheworld.Throughthisstrategicbusinesspartnership

andinvestment,wewillsupporttheexpansionofOSIsoft’sPI

Systemthroughitsglobalnetworkofaffiliatedcustomersand

businesspartnersandwilllooktodevelopnewIoTsolutionsthat

bridgeourcustomerswithOSIsoftandvariouspartners.

Initiatives in domestic buyout fund

InSeptember2015,Mitsuiestablishedtheprivateequityfirm

MSDInvestmentsLtd.(MSDInvestments)incollaborationwith

SumitomoMitsuiBankingCorporationandtheDevelopment

BankofJapanInc.Mitsuiinvested¥10billioninafundmanaged

byMSDInvestments,whichhasbegunoperations.

ManycompaniesinJapantodayfaceachallengingeconomic

environmentandawiderangeofmanagementproblems,

includingintensecompetitionindomesticandoverseasmarkets

aswellasbusinesssuccessionissues.Asastrategicpartnerwith

along-termoutlook,MSDInvestmentswillleveragethebroad

rangeofnetworksandbusinessknow-howpossessedbyits

threesponsorstorealizetheself-relianceandsustainabilityofits

portfoliocompanies.Inthisway,MSDInvestmentswillassist

thesecompaniesinadvancingtothenextphaseofgrowth.

MitsuiwilldrawuponitsexpansivenetworkbothinJapan

andoverseas,aswellasthebusinessmanagementknow-howit

hascultivatedovertheyears,tocontributetothegrowthofthe

portfoliocompaniesofMSDInvestmentsbysupportingtheir

globalexpansionandimprovingtheirmanagement.

ProgramshootingimageatNaaptol

Iron&Steel

Products

Mineral&Metal

Resources

Machinery&

Infrastructure

Chemicals Energy Lifestyle Innovation&

Corporate

Development

Americas Europe,

theMiddleEast

andAfrica

AsiaPacific

MITSUI&CO.,LTD.ANNUALREPORT2016 61

• Manyyearsofexperienceininvest-

ingintheUnitedStates,anincuba-

tioncenterfornewbusinesses

• Widerangeofbusinessactivities

withdeeprootsinSouthand

CentralAmerica

• Diversehumanresourceswith

strongrootsintheregion

• FastgrowingmarketssuchasTurkey,AfricaandtheMiddleEast

• Abilitytostructureprojectsinnewbusinessfieldsbasedon

relationshipswithtrustedleadinglocalpartnersestablished

overtheyears

• Diversehumanresourcesstronglyrootedinthelocalcommu-

nitiesthatenableustouncoverinnovativebusinessactivities

thatengagedistinctiveregionalcharacteristics,andpromptly

reacttochangesinthelocalbusinessenvironments

• Countriesandregionswhereeconomies

arecontinuingtogrowmarkedly

• Relationshipswithtrustedleadinglocal

partnersestablishedovertheyears

• Diversehumanresourceswithstrongroots

intheregion

StrengthsintheThreeOverseasRegionalSegments

©dgordonphotography

AmericasSegment

EMEA(Europe,theMiddleEastandAfrica)Segment AsiaPacificSegment

BusinessOverview

MITSUI&CO.,LTD.ANNUALREPORT201662