Difference between revisions of "Marubeni" - New World Encyclopedia

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{{Infobox Company  
 
{{Infobox Company  
 
| company_name = Marubeni Corporation  
 
| company_name = Marubeni Corporation  
| company_logo = [[Image:Marubeni logo.svg]]
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| company_logo =  
 
| company_type = [[public company|Public]] [[Kabushiki kaisha|KK]] ({{tyo|8002}})
 
| company_type = [[public company|Public]] [[Kabushiki kaisha|KK]] ({{tyo|8002}})
 
| foundation      = 1858 (as private company)<br />1949 (division)
 
| foundation      = 1858 (as private company)<br />1949 (division)
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| homepage = [http://www.marubeni.com/ www.marubeni.com]
 
| homepage = [http://www.marubeni.com/ www.marubeni.com]
 
}}
 
}}
[[Image:Marubeni-Osaka-hq-01.jpg|right|thumb|Osaka head office of Marubeni in Chuo-ku, Osaka, Japan]]
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{{Nihongo|'''Marubeni Corporation'''|丸紅株式会社|Marubeni Kabushiki-gaisha}} ({{tyo|8002}}) is a [[Japan]]ese trading company and one of the largest [[sogo shosha]], (general trading companies) in Japan. Marubeni has 12 business divisions: [[agriculture|agri]]-marine products; [[chemical]]s; development and [[construction]]; [[energy]]; [[finance]], [[logistic]]s, and new [[business]]; [[forest]] products and general [[merchandise]]; [[information]] and [[communication]]; [[metal]]s and [[mineral]] resources; [[plant]] and [[ship]]; [[power project]]s; [[textile]]s; and [[transportation]] and [[industrial machinery]].
{{Nihongo|'''Marubeni Corporation'''|丸紅株式会社|Marubeni Kabushiki-gaisha}} ({{tyo|8002}}) is a [[Japan]]ese trading company, one of the largest GTCs ([[Sogo shosha]]) in Japan.  
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Marubeni's name combines the Japanese words for "circle" and "red." It was founded, in 1858, from humble beginnings. Company founder, Chubei Itoh, began the company by peddling Ohmi [[linen]] on a market circuit. In 1872, he opened a wholesale drapery store, "Benichu," in [[Osaka]], and gradually expanded into foreign trade with commercial goods. His son, Chubei Itoh II, brought a practical and international outlook to the business. Itoh II studied in [[England]] for one year and developed a new [[business model]]. Itoh II purchased directly from manufacturers instead of through foreign trading houses. He then developed the company further by the use of low-interest local capital to finance exporting products from Japan to several other countries. Marubeni continued expanding its trade into many industries and like most others, benefited when demand for its products was increased by economic expansion, and weathering economic downturns. There are 120 Marubeni Group offices worldwide with more than 500 associated companies.
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==History== 
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===Foundation ===
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[[Image:Marubeni-Osaka-hq-01.jpg|right|thumb|240px|Osaka head office of Marubeni in Chuo-ku, Osaka, Japan]]
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Chubei Itoh (1842–1903), the founder of Marubeni was born in what is now called [[Toyosato, Shiga|Toyosato-cho]], [[Inukami District, Shiga]] Prefecture, the second son of Chobei Itoh. From an early age he was involved in the family trading business, making his first business trip when he was eleven years old with his brother Manjiro, to sell goods in the town of Goso in Houzuki Village. Marubeni considers itself to have been founded in 1858, when Chubei began peddling Ohmi linen, following the ''mochikudari'' system. Chubei traveled a regular circuit of market towns, taking orders with a sample book and having the goods delivered by express messenger to a designated inn. The following year he observed the foreign trade activity in [[Nagasaki]] and determined to open his own trading business at the earliest opportunity. In 1861, Chubei joined the Eiku trade association of Ohmi merchants who took drapery and cloth goods to Kyushu, and later became a representative of this organization.<ref>Itochu Group, [http://www.itochu-group.com/history/index_e.html  Chubei Itoh]  Retrieved October 8, 2008.</ref>
  
==History==
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At that time it was fashionable to open shops in Kyoto, but in 1872, Chubei challenged convention by opening a drapery shop, '''Benichu,''' a drapery shop, at Motomachi 2 chome in [[Osaka]]. That same year, Chubei's older brother, Chobei Itoh opened Itoh-chobei Shoten, a drapery wholesale store in [[Fukuoka|Hakata]], [[Kyushu]]. Chubei divided his profits equally between providing for his family, building his business and paying his employees. He loved freedom and rationality, telling his staff that "prosperity can only be found where true liberty lies." and encouraging younger staff to openly voice their opinions at regular in-house meetings. He hosted [[sukiyaki]] parties with his staff each month on days ending on a "1" or a "6," and regularly organized social events for them to attend plays or [[sumo]] matches.<ref>Ibid.</ref>
===Foundation era===
 
The company's founder, Chubei Itoh, was born in what is now called [[Toyosato, Shiga|Toyosato-cho]], [[Inukami District, Shiga]] Prefecture. The company considers its founding year to be 1858, the year in which Chubei began peddling of Omi linen. In 1872, Chubei stopped peddling and opened '''Benichu''', a drapery shop, at Motomachi 2 chome in [[Osaka]]. That same year, Chubei's older brother, Chobei Itoh opened Itoh-chobei Shoten, a drapery wholesale store in [[Fukuoka|Hakata]], [[Kyushu]].
 
 
In 1883, Chubei used the “Beni” mark as the store's logo. This was the beginning of the company's name of Marubeni. The next year in 1884, Benichu was renamed '''Itoh Main Store''' and '''Itoh Kyoto Store''', a drapery wholesale store was established in [[Kyoto]]. Thereafter the company expanded its operations, establishing the [[woolen]] fabric import and wholesale store, '''Itoh West Store''' in Osaka, the [[cotton]] thread wholesale store, '''Itoh Yarn Store''', [[Kobe]] branch, and other operations.  
 
  
In 1903, Chubei passed away and his son, Seiichi, assumed the name Chubei II. In 1914, the Company was reorganized from a proprietorship into '''C. Itoh & Co.''' In 1918, the [[limited partnership]] was divided into '''Itochu Shoten Ltd.''' with the Main store and Kyoto store at its center, and '''C. Itoh & Co., Ltd.''' with the yarn store and the Kobe Branch at its center. These two companies were the forerunners to Marubeni Corporation and [[Itochu]] Corporation, respectively.
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Chubei’s personal motto was, "Trade is the karma of the [[Bodhisattva]], the nobility of the way of trade is to achieve the will of Buddha by filling the world's wants from the benefits of buying and selling; true profit from work (a merchant's profits can only be gained by the merchant's own efforts; only such profit is true profit).
  
===Marubeni Shoten era===
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In 1883, Chubei began to use the “Beni” character as the store's logo. In 1884, Chubei changed his store’s name to Itoh Honten (headquarters), and opened '''Itoh Kyoto Store,''' a drapery wholesale store in Kyoto. In 1885, he formed the foreign trading company "Itoh Sotoumi-gumi" with Tetsujiro Sotoumi, steadily expanding the business to trade in general merchandise of many kinds. Later he opened ''Itoh West Store,'' a [[wool|woolen]] fabric import and wholesale store, in Osaka, and the Itoh Itomise (Thread and Yarn Store), and other enterprises. He served as the headman of Toyosato Village (now Toyosato Town) until his death in 1903.
After [[World War I]] (1914&ndash;1918), the [[commodity market]] plummeted, bankrupting many companies and banks, and Itochu Shoten Ltd. and C. Itoh & Co., Ltd. also suffered large losses. For this reason, C. Itoh & Co., Ltd. spun off its trading division, which was the Kobe branch, and its overseas branches to start '''Daido Boeki Kaisha Ltd.''' In 1920. Daido Boeki opened new branches and offices in several countries, such as the [[Philippines]], [[China]], [[Indochina]], and [[Indonesia]], and grew steadily by handling textiles, sundries, linen, rubber, and other products.  
 
  
Itochu Shoten merged with '''Ito-chobei Shoten''', which had remained under sound management, to form '''Marubeni Shoten Ltd.''' in March 1921. At that time the company had only one branch in Kyoto, and was at best a textiles wholesaler, handing silk and wool fabrics. In 1931, the Osaka branch was established, and this branch began to concentrate on trading and eventually opened branches and offices throughout China and in [[India]] and expanded the goods to handle to include construction materials, machinery, sundries, food products, etc., in addition to textiles. The Osaka branch's sales grow rapidly and in 1937 clearly exceeded those of the Main store, accounting for 62% of overall sales.
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===C. Itoh & Co.===
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Chubei Itoh was succeeded by his son, Chubei Itoh II. The beginning of the [[Russo-Japanese War]] in 1904 created a sudden demand for [[cotton]] in [[Japan]], causing the industry to develop dramatically. Itoh Honten rapidly developed its overseas trade, setting up an [[export]] department in 1904, a [[Shanghai]] office in 1906 and a branch office in Gyeong-seong ([[Seoul]]), [[Korea]] in 1907. In 1908 the four businesses and one factory previously run by different branches of the Itoh family were consolidated into one company, with Chubei Itoh II as the managing director, and opened a [[Tokyo]] branch. The export department was set up as a separate business with the name of '''Itoh Exports,''' opened branch offices in [[Hankou]] and [[Manila]], and established a joint venture called ‘Kyoekisha’ using local capital in Korea and [[China]].
  
=== Sanko and Daiken ===
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In 1909–1910, Chubei Itoh II went abroad to study in [[England]], visiting the U.S.A. on his way. While in England, he gained experience as a businessman and formulated new trading methods that became the basis of Marubeni today, such as trading directly with businesses in the U.K. rather than through the foreign trading houses to gain more profit for Japan, and making use of low interest rates in the U.K. to finance importing. Chubei Itoh II’s international outlook and practical approach to business were the key to Marubeni’s growth into a major international corporation.
As the business performance of Marubeni Shoten, C. Itoh & Co., Ltd., and others recovered, the move to unify all of the Ito family business strengthened. In September 1941, the three companies of '''Kishimoto Shoten Ltd.''', a steel trading company for which Chubei Itoh served as an officer, Marubeni Shoten and C. Itoh & Co., Ltd., where merged to form '''Sanko Kabusiki Kaisha Ltd.''' Soon after, however, the [[Pacific Ocean theater of World War II]] erupted and brought strong economic regulation, which made conducting company activities difficult and limited trading to China and [[Southeast Asia]].  
 
  
In September 1944, the three companies of Sanko, Daido Boeki, and '''Kureha Cotton Spinning Co., Ltd.''' (which was established by Chubei Itoh) were merged to form '''Daiken Co., Ltd.''' It has 103 affiliated companies inside and outside of Japan. The production division alone was involved in 16 different major company groups; the commercial division handled shipping and delivery of textiles, heavy industry, and chemical industry products, grains, fertilizer, etc., and also provided materials to the military. The war ended soon after, however, and the company lost all of its overseas assets.  
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In 1914, the Company was reorganized from a proprietorship into '''C. Itoh & Co.''' In 1918, the [[limited partnership]] was divided into '''Itochu Shoten Ltd.''' with the Main store and Kyoto store at its center, and '''C. Itoh & Co., Ltd.''' with the yarn store and the Kobe Branch at its center. These two companies were the forerunners to Marubeni Corporation and [[Itochu]] Corporation, respectively.
  
When the war ended in 1945, Daiken had more than 5,000 employees. Of these, approximately 2,200 were military personnel or were involved in military work, and approximately 1,000 people were in China and Southeast Asia. These people were brought back to Japan after the war, but many of them had to be laid off due to the economic recession in Japan.  
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===Marubeni Shoten era===
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In the wake of [[World War I]] (1914–1918) and the Great Depression, the [[commodity market]] plummeted, bankrupting many companies and banks, and Itochu Shoten Ltd. and C. Itoh & Co., Ltd. also suffered large losses. In response, C. Itoh & Co., Ltd. spun off its trading division, which was the Kobe branch, and its overseas branches, into '''Daido Boeki Kaisha Ltd.''' In 1920. Daido Boeki opened new branches and offices in several countries, such as the [[Philippines]], [[China]], [[Indochina]], and [[Indonesia]], and grew steadily by handling [[textiles]], sundries, [[linen]], [[rubber]], and other products.  
  
In February 1948, Daiken was designated as being subject to the Law for Elimination of Excessive Concentrations of Economic Power, which was part of the measures to break up the [[zaibatsu]] (large [[holding company|holding companies]]) and was divided into the four companies of '''Marubeni Co., Ltd.''', '''C. Itoh & Co., Ltd.''', '''Kureha Cotton Spinning Co., Ltd'''. and '''Amagasaki Nail Work Ltd.'''
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In March 1921, '''Itochu Shoten''' merged with ''Ito-chobei Shoten'' to form ''Marubeni Shoten Ltd.'' At that time the company had only one branch in [[Kyoto]], and was at best a textiles wholesaler, handing [[silk]] and [[wool]] fabrics. As Japan entered the Showa Era (1926–1989) there was a revolution in women’s [[fashion]]s, from Japanese style to Western style. From 1924 onwards, ''Marubeni Shoten Ltd.'' traded in processed [[cotton]], which increased in importance each year until it became the principal export product. Kureha Cotton Spinning was founded in 1929. Marubeni Shoten Ltd. increased its trade in raw materials  such as cotton, rayon and rayon yarn, central to the development of the Japanese textile industry, and became a major textile trading concern. In 1931, the Osaka branch was established, concentrated on trading, and eventually Marubeni Shoten Ltd. opened branches and offices throughout China and in [[India]] and expanded its trade to include construction materials, machinery, sundries, food products, and other materials in addition to textiles. In 1937, the Osaka branch's sales exceeded those of the Main store, accounting for 62 percent of overall sales. Branches were opened in [[Calcutta]], Semarang, [[Bangkok]], [[Bombay]], and [[New York]], and an international network of representatives operated in [[South America]], [[Africa]], and [[Australia]].
  
=== Launch of Marubeni===
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=== Sanko and Daiken ===
On [[December 1]], [[1949]], Marubeni Co., Ltd. was established based on the commercial supremacy and employees of the old Marubeni Shoten, Daido Boeki and Kishimoto Shoten. The new company was capitalized at ¥150 million, had 1,232 employees, and Shinobu Ichikawa from Marubeni Shoten was named as president. The old Marubeni Shoten building in Motomachi 3 chome, Higashi Ward, Osaka was used as the headquarters.  
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As the business performance of Marubeni Shoten, C. Itoh & Co., Ltd., and others recovered, the move to unify all of the Ito family business strengthened. In September 1941, the three companies of '''Kishimoto Shoten Ltd.,''' a steel trading company for which Chubei Itoh served as an officer, Marubeni Shoten and C. Itoh & Co., Ltd., were merged to form '''Sanko Kabusiki Kaisha Ltd.''' Soon after, however, [[World War II]] erupted in the Pacific, resulting in strong economic regulation, which made conducting company activities difficult and limited trading to China and [[Southeast Asia]].  
  
When established, the company had a headquarters in Osaka, two branches in Tokyo, and other branches in Kobe, Kyoto, [[Nagoya]], [[Hiroshima]], [[Fukui]], [[Kokura]], and [[Yokohama]], but not a single overseas office.  
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In September 1944, the three companies of Sanko, Daido Boeki, and '''Kureha Cotton Spinning Co., Ltd.''' were merged to form '''Daiken Co., Ltd.''' It had 103 affiliated companies inside and outside of Japan. The production division alone was involved in 16 different major company groups; the commercial division handled shipping and delivery of textiles, heavy industry, chemical industry products, [[grain]]s, and [[fertilizer]]; and also provided materials to the military. When the war ended soon afterward, the company lost all of its overseas assets.  
  
On December 1, 1949 private companies were allowed to export; in January 1950 imports were liberalized.  
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When the war ended in 1945, Daiken had more than 5,000 employees. Of these, approximately 2,200 were military personnel or were involved in military work, and approximately 1,000 people were in China and [[Southeast Asia]]. These people were brought back to Japan after the war, but many of them had to be laid off due to the economic recession in Japan.  
  
On the day of the company's establishment, President Ichikawa said the company's management policy would be to build operations on the three areas of exports, imports, and domestic operations, and that the company philosophy would be fairness for sales and activities, innovation for always nourishing the spirit of progress in regards to work, and harmony for management and labor. This was the start of the company creed of fairness, innovation, and harmony.  
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In February 1948, Daiken was identified as subject to the Law for Elimination of Excessive Concentrations of Economic Power, one of the measures to break up the Japanese [[zaibatsu]] (large [[holding company|holding companies]]). It was divided into the four companies of '''Marubeni Co., Ltd.,''' '''C. Itoh & Co., Ltd.,''' '''Kureha Cotton Spinning Co., Ltd.,''' and '''Amagasaki Nail Work Ltd.'''
  
The first financial results after establishment (December 1949 to March 1950) showed sales of ¥5 billion, 80% of which were from textiles, so the Company was a textile-centered trading company.  
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=== Launch of Marubeni===
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On December 1, 1949, Marubeni Co., Ltd. was established based on the commercial supremacy and employees of the old Marubeni Shoten, Daido Boeki and Kishimoto Shoten, with Shinobu Ichikawa from Marubeni Shoten as president. The new company was capitalized at ¥150 million, had 1,232 employees, and used the old Marubeni Shoten building in Motomachi 3 chome, Higashi Ward, Osaka as its headquarters. The company had  two branches in Tokyo, and other branches in Kobe, Kyoto, [[Nagoya]], [[Hiroshima]], [[Fukui]], [[Kokura]], and [[Yokohama]], but not a single overseas office.  
  
With the start of the [[Korean War]] in June 1950, the extraordinary demand created by the war caused improving market conditions, which resulted in a rapid increase in the Company's sales to ¥50.6 billion for fiscal 1950. However, when an agreement was reached in the cease fire talks started in 1951, the markets for the three products of textiles and soy beans, rubber, and leather collapsed, causing many trading companies, including the Company, to suffered big loses, and causing the Company to ask for help from banks and spinning companies.  
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On December 1, 1949, Japanese private companies were allowed to export; in January 1950, imports were liberalized. The first fiscal year (December 1949 to March 1950) Marubeni Co., Ltd. had sales of ¥5 billion, 80percent of which were from textiles, so the Company was a textile-centered trading company.  
  
The Company's first overseas office was the [[New York City|New York]] office, which was established in April 1951, and then in November of the same year the Company's first overseas subsidiary, '''Marubeni Company (New York) Inc''', was established. In 1951 other offices were established in [[Karachi]] and [[Portland, Oregon|Portland]], and these were followed in 1952 by offices in [[London]], [[Singapore]], [[Mexico]], [[Manila]], [[Hong Kong]] and others so that by the end of 1954 the Company had 22 overseas subsidiaries and opened overseas representative offices to become a true trading company.  
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The start of the [[Korean War]] in June 1950, created an extraordinary demand that improved market conditions, resulting in a dramatic increase in sales, ¥50.6 billion for fiscal 1950. When an agreement was reached in the cease fire talks in 1951, the markets for textiles, soy beans, rubber, and leather collapsed, causing big losses, and forcing the company to ask for help from banks and spinning companies.  
  
Thereafter, as the Japanese economy expanded, the Company's sales grew to where in 1953 sales reached ¥134.9 billion, surpassing the ¥100 billion mark. As the Company's operations expanded its capital was increased until it reached ¥1.5 billion in February 1955.
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Marubeni’s first overseas office was established in [[New York City|New York]] in April 1951, and in November of the same year '''Marubeni Company (New York) Inc''', was established as its first overseas subsidiary. Other offices were established in [[Karachi]] and [[Portland, Oregon|Portland]] in 1951, followed in 1952 by offices in [[London]], [[Singapore]], [[Mexico]], [[Manila]], [[Hong Kong]] and other cities. By the end of 1954 the company had 22 overseas subsidiaries and numerous overseas representatives, making it a true trading company. As the Japanese economy expanded, Marubeni’s sales grew to ¥134.9 billion in 1953, and its capital reached ¥1.5 billion in February 1955.
  
 
===Merger with Iida===
 
===Merger with Iida===
The government decided that the trading companies needed to be strengthened to expand the country's trade and so established a policy to strengthen them. Because the trading company '''Iida & Co., Ltd.''' had sustained a large loss from the collapse of the soybean market, that company's main bank, [[Fuji Bank]], decided that a merger with another trading company was the only way to restructure that company and so asked Marubeni to cooperate. Marubeni agreed to the merger, judging that it was in accordance with the country's policy to strengthen the trading companies, and so on September 1, 1955, Marubeni and Iida merged to form '''Marubeni-Iida Co., Ltd.'''
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In 1955, '''Iida & Co., Ltd.,''' which had sustained a large loss from the collapse of the soybean market, sought a merger with Marubeni, in accordance with a government policy ot strengthen trading companies. On September 1, 1955, Marubeni and Iida merged to form '''Marubeni-Iida Co., Ltd.''' Marubeni profited from Iida & Co., Ltd.’s strong position in the domestic steel trade, and its dominance in the wool, leather, machinery, and fuel trades.
  
Iida called 'Takashimaya' in Japan, was founded in Kyoto in 1829 by Iida Shinshichi, a native of what is now Takashima County, Shiga Prefecture, to retail used clothing and cotton cloth. Later, the company also handled dry goods and sundries as well as concentrated on trading. In 1916, the trading division was spun off to form Iida, and then in 1919 the dry goods and retail division was spun off to form Takashimaya Drapery Store Co., Ltd., which is the forerunner of today's [[Takashimaya]] Department Store.
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Marubeni-Iida established a chemicals department in 1957, and mediated the transfer of polyethylene production technology from the [[United States]] to [[Showa Denko]]. In 1958 it actively pioneered new business fields, such as the start of automobile exports to the United States by [[Nissan Motors]], which greatly expanded the sales of machinery and other products handled by the non-textile division. Sales in 1965 reached ¥1.1351 trillion, and the company employed 5,943 workers in more than 70 companies in Japan alone.  
 
 
Just before the merger, Iida had fiscal 1955 sales of ¥31.8 billion with textiles accounting for 44% of sales and non-textiles accounting for the remaining 56% of sales. In particular, as a member of the Tookakai, a group of steel wholesalers designated by [[Nippon Steel|Yahata Steel and Fuji Steel]], the company had a strong position in domestic steel trade. The company also held advantageous commercial supremacy for wool, leather, machinery, fuel, and other items, which were succeeded to by Marubeni-Iida through the merger, which was a major milestone in Marubeni-Iida's development into a general trading company.
 
 
 
In 1960, the government announced the Income Doubling Plan, which began the period of rapid economic growth and the expansion of heavy and chemical industries, such as steel, petrochemicals, synthetic textiles, and automobiles.
 
 
 
In line with this background, Marubeni-Iida established a chemicals department in 1957 and mediated the transfer of polyethylene production technology from the [[United States]] to [[Showa Denko]], and in 1958 actively pioneered new business fields, such as the start of automobile exports to the United States by [[Nissan Motors]], which greatly expanded the sales of machinery and other products handled by the non-textile division. This caused a decrease in the Company's ratio of sales accounted for by textiles from 65% in fiscal 1955 immediately after the merger with Iida to 50% in fiscal 1959, and then 35% in fiscal 1964.
 
 
 
Sales also increased from the ¥198.9 billion immediately after the merger with Iida to ¥612.7 billion in fiscal 1960 and then beyond the one trillion yen mark in fiscal 1964 to ¥1.1351 trillion. During this time new workers were actively hired, which increased the number of employees to 5,943 people as of the end of March 1965. In addition, the investment in many companies and the establishment of new companies increased the number of subsidiaries and affiliates from the original 4 at the launch of the new Marubeni to 70 companies in Japan alone. The Company's capital was increased several times so that by 1963 it reached ¥15 billion, ten times the ¥1.5 billion in 1955.
 
 
 
In May 1964, President Ichikawa, who had lead the Company for the 14 years since the launch of the new Marubeni, was named as chairman and Vice President Hiroshi Hiyama became president.
 
  
 
===Merger with Totsu===  
 
===Merger with Totsu===  
In April 1966, Marubeni merged with '''Totsu Co., Ltd.''', which was a trading company specializing in metals and one of sales agents of Nippon Kokan K.K. (now [[JFE Holdings|JFE]]) (merger was registered June 1). Marubeni-Iida succeeded to the employees and commercial supremacy of that company.  
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In April 1966, Marubeni merged with '''Totsu Co., Ltd.,''' a trading company specializing in metals and a sales agents for Nippon Kokan K.K. (now [[JFE Holdings|JFE]]). The merger with Totsu created a close relationship between Marubeni-Iida and NKK and doubled the sales of Marubeni-Iida's previously weak metals division.  
  
Totsu was founded in 1918 as '''Asano Bussan Co., Ltd.''', a trading company that handled 65% of Japan's crude oil imports before [[World War II]]. After the war some operations were spun off from Asano Bussan to establish '''Asahi Bussan Co., Ltd.''', and then in 1961 the two companies remerged to form '''Tokyo Tsusho Kaisha, Ltd.''' and later on the company's name was changed to Totsu Co., Ltd. Before merging with Marubeni-Iida, the company had sales of approximately ¥200 billion, 65% of which were accounted for by metals-related operations, and approximately 1,600 employees.  
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During the second half of the 1960s, when Japan's real economic growth exceeded 10percent, the country's industrial output, such as steel and automobiles, increased rapidly, creating a growing demand for raw materials. In response, Marubeni-Iida began developing a variety of businesses that are now the core of the company, such as importing [[iron ore]] from [[Australia]] and raw [[coal]] from [[Canada]]; constructing a pulp plant in Canada; operating salt fields in Australia; forming a textile joint venture in Thailand; establishing an automobile sales company in [[Belgium]]; and constructing a steel distribution processing center, grain silos, chemical tanks, and high-rise condominiums in Japan.  
  
The merger with Totsu created a close relationship between Marubeni-Iida and NKK and strengthened Marubeni-Iida's previously weak metals division such that in 1966 the sales of the metals division were double that before the merger and rivaled those of the textiles division. The sales ratio of heavy and chemical industry products, such as metals, machinery, and chemicals, now accounted for more than 50% of Marubeni-Iida's sales.
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After the merger with Iida in 1955, Marubeni-Iida had a close relationship with Fuji Bank, leading to the formation in 1960 of Fuyo Development Co., Ltd. (now Fuyo General Development and Finance Co., Ltd.), with 17 other companies including the Fuji Bank, NKK, Showa Denko, and [[Taisei Corporation]]. In 1966 the Fuyo Conference, consisting of the presidents of [[Fuyo Group]] companies was formed, and Fuyo Air Services Co., Ltd. (1968) and Fuyo General Lease Co., Ltd. (1969) were established by its member companies, including Marubeni-Iida.  
 
 
Accompanying the merger, Marubeni-Iida undertook a major organizational restructuring and implemented a two headquarters system consisting of the exiting Osaka Headquarters and making the Tokyo branch the Tokyo Headquarters. In addition, most of the administrative departments were moved to the Tokyo Headquarters, so essentially the Tokyo Headquarters became the center of the Company.
 
 
 
During the second half of the 1960s Japan's real economic growth exceeded 10% to enter a true high-growth period. At this time, the country's industrial output, such as steel and automobiles, increased rapidly, which created the issue of procuring raw materials to meet this growing demand.
 
 
 
In response to this, Marubeni-Iida began developing a variety of businesses that are now the core of the company, such as importing iron ore from [[Australia]] and raw coal from [[Canada]]; constructing a pulp plant in Canada; operating salt fields in Australia; forming a textile joint venture in Thailand; establishing an automobile sales company in Belgium; and constructing a steel distribution processing center, grain silos, chemical tanks, and high-rise condominiums in Japan.
 
 
 
Since the merger with Iida in 1955, Marubeni-Iida has had a close relationship with Fuji Bank, and the desire to increase mutual cooperation among companies, the main bank of each of them is Fuji Bank, lead to the formation in 1960 of Fuyo Development Co., Ltd. (now Fuyo General Development and Finance Co., Ldt.), a developer company, with 17 other companies including the Fuji Bank, NKK, Showa Denko, and [[Taisei Corporation]]. In 1966 the Fuyo Conference consisting of the presidents of [[Fuyo Group]] companies was started, and then in 1968 Fuyo Air Services Co., Ltd. and 1969 Fuyo General Lease Co., Ltd. were established by member companies including Marubeni-Iida.  
 
  
 
===Company name changed to Marubeni Corporation===  
 
===Company name changed to Marubeni Corporation===  
1969 marked the 20th year since the company started anew as the Marubeni Corporation, and in fiscal 1969 sales exceeded ¥2 trillion reaching ¥2.1642 trillion, and at the end of March 1970 employees numbered 7,556.
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[[Image:Marubeni Corporation (Tokyo head office).jpg|thumb|right|240px|Tokyo head office of Marubeni in Chiyoda, Tokyo, Japan]]
 
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On January 1, 1972, the company changed its name from Marubeni-Iida to '''Marubeni Corporation.''' During the same month, the office of the Tokyo headquarters was moved from the Otemachi Building to the newly constructed Marubeni Building at Takebashi Station in Tokyo, which is still the headquarters office building today.  
[[Image:Marubeni Corporation (Tokyo head office).jpg|thumb|right|250px|Tokyo head office of Marubeni in Chiyoda, Tokyo, Japan]]
 
On January 1, 1972, the company changed its name from Marubeni-Iida to '''Marubeni Corporation'''. During the same month, the office of the Tokyo headquarters was moved from the Otemachi Building to the newly constructed Marubeni Building at Takebashi Station in Tokyo, which is still the headquarters office building today.  
 
  
In July 1973, the Company merged with '''Nanyo Bussan Co., Ltd.''', a trading company specializing in non-ferrous metals (the merger was registered in November) and Marubeni succeeded to the commercial supremacy and employees of that company. Nanyo Bussan was established in 1934 to import non-ferrous metals, such as copper ore from the Philippines and other areas, and before the merger had ¥13.8 billion in sales and 138 employees. Because Marubeni was weak in copper ore imports, merging with Nanyo Bussan was a major benefit.
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In July, 1973, the Company merged with '''Nanyo Bussan Co., Ltd.,''' a trading company specializing in non-ferrous metals, and acquired its interests in copper ore imports.
  
 
===Oil crisis and criticism of trading companies===  
 
===Oil crisis and criticism of trading companies===  
As the international competitiveness of Japanese industry strengthened, exports increased and the trade surplus grew while at the same time the United State's trade deficit increased, so in response, in August 1971 the United States ceased the conversion of dollars to gold and established import surcharges. This was called the "[[Nixon Shock]]," and this was used as an opportunity to switch the major world currencies from a fixed exchange rate system to a variable exchange rate system.  
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In August 1971, alarmed by its growing trade deficit ("[[Nixon Shock]]"), the United States ceased the conversion of dollars to [[gold]] and established import surcharges. The major world currencies from a [[fixed exchange rate]] system to a [[variable exchange rate]] system, causing the [[yen]] to strengthen. The Japanese government, worried about a strong yen recession, implemented aggressive fiscal support, easier financing, and a low-interest-rate policy. This, coupled with a rise in grain prices due to poor weather overseas and a rise in the price of [[crude oil]] when the [[Yom Kippur War]] broke out, caused runaway inflation in Japan. The mass media blamed the trading companies for the price increases, accusing them of cornering the market or hoarding. Until that time, the general trading companies had admired as Japan's economic pioneers for developing overseas markets and investing in new businesses, but as sales grew to several trillion yen, they were criticized for their sheer size. As the Japanese economy became massive, the growth slowed and the emphasis changed from heavy industry, such as steel and heavy equipment, to light industry, such as [[electronics]].  
  
This caused the yen to strengthen, so the Japanese government, with was worried about a strong yen recession, implement aggressive fiscal support, easier financing, and a low-interest-rate policy. This resulted in pouring too much money into market, which in turn caused prices to rise. In addition, poor weather overseas caused grain prices to rise, and then in October 1973 the [[Yom Kippur War]] broke out, causing the price of crude oil from [[Persian Gulf]] oil-producing countries to rise greatly. These factors caused the February 1974 [[wholesale price index]] in Japan to rise 37% over the same month the previous year to create a state of runaway inflation. At this time the mass media blamed trading company activities for the price increases saying the trading companies were probably cornering the market or hording.  
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===Lockheed scandal===
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In February 1976, Marubeni’s credibility was damaged when it was implicated in a scandal involving the sale of [[Lockheed Martin|Lockheed]]'s wide-bodied Tri-Star passenger plane to Japan's largest domestic carrier, ANA. Lockheed contracted Marubeni to act as its representative in the multi-million dollar negotiations. The former vice-chairman of Lockheed, Carl Kotchian, testified that a Marubeni official made arrangements for Lockheed to pay US$300,000 (US$50,000 for each of six planes originally ordered) to the president of the airline, as well as US$100,000 to six government officials, in accordance with "Japanese business practices," to secure the contract. By July 1976, prosecutors had arrested nearly 20 officials of Marubeni and All Nippon Airways. The scandal nearly brought down the Japanese government. The case directly contributed to passage of the [[Foreign Corrupt Practices Act (1977)]] in the [[United States]], which forbids U.S. companies from making payments to officials of foreign governments for the purpose of obtaining or retaining business.  
  
Until that time the general trading companies had been well thought of as Japan's economic pioneers for developing overseas markets, investing in new businesses, and other activities, but as sales grew to several trillion yen, the sheer size of the trading companies was criticized. In addition, as the Japanese economy became massive, the accustomed double-digit growth changed to single-digit growth and industry changed from heavy industries, such as steel and heavy equipment, to light industries, such as electronics.  
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Marubeni was seriously damaged by the public image resulting from the scandal; more than 40 municipalities canceled contracts, and several international ventures were terminated. The company implemented a reform of its management structure, distributing many of the president's administrative responsibilities to a board of senior executives and adding checks and balances at the executive level. Marubeni recovered quickly and by 1977, its trading volume was double that of 1973. Marubeni consolidated its international trading network and expanded its business in the United States, Australia, [[Brazil]], Britain, [[West Germany]], and [[Sweden]]. Marubeni also opened or expanded offices in the [[Soviet Union]], the [[People's Republic of China]], the [[Middle East]], and Africa. In the early 1980s Marubeni was involved in the development of coal mines in the United States and Australia, a copper mine in [[Papua New Guinea]], and nonferrous metal mines in Australia and the [[Philippines]].<ref>Answers.com, [http://www.answers.com/topic/marubeni-corporation Marubeni Corporation.] Retrieved October 9, 2008.</ref>
  
During this time of economic transition, the Company's sales exceeded 5 trillion yen in fiscal 1974 to reach ¥5.5484 trillion yen. Then in May 1975 President Hiyama became the chairman and Vice President Taiichiro Matsuo became the president.  
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==="Wintry period for trading companies"===
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During the first half of the 1980s Japan's real economic growth remained around a low 3percent, and the country faced the problem of disposing of overcapacity, especially in the materials industry. The strong [[Japanese yen|yen]] decreased export profits, leading manufactures to reduce the commissions paid to trading companies or bypass them altogether and directly export their own products. Increases in expenses and labor costs, and the poor performance of subsidiaries and affiliates, increased the trading companies’ difficulties, and the period came to be called the "wintry period for trading companies."
  
The [[Iranian Revolution]] that occurred in 1979 caused a temporary stoppage in crude oil production, sending up the price of crude oil again, moving it from $10 a barrel to $30 a barrel in 1980. During this time the Company's energy and chemicals division sales increased greatly and came to account for nearly the same 23% share as that of machinery and metals. During fiscal 1980 total sales also exceeded ¥10 trillion, reaching ¥10.1846. In addition, several capital increases raised the capital to ¥39.8 billion at the end of March 1981, and the shareholders' equity exceeded ¥100 billion, reaching ¥112.5 billion.
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In December 1982, a Vitalize Marubeni (V.M.) initiative to strengthen business fundamentals and improve profitability was implemented, but the company suffered costly write-offs from the reorganization of its subsidiaries, and was forced to rely on income from the sale of stock. The businesses that did expand during this period were plant exports for power systems, energy, chemicals, and exports of [[steel]] [[pipe]] for oil producing companies. Orders for power systems from around the world were a major source of profit from the 1980s through the first half of the 1990s.  
  
Marubeni have recently been criticised by the [[Burma]] Campaign UK for being a 'major source of revenue for the Burmese regime'.
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After the [[Japanese asset price bubble|burst of the Japanese bubble”]] in the 1990s, Marubeni suffered a large write off, and the drop in price of bank and other stocks caused the company to post a net loss in 1997 of ¥30.8 billion, the company's first loss since fiscal 1951. Despite this difficult business environment, Marubeni actively developed businesses, such as developing and importing LNG from [[Qatar]], purchasing a pulp plant in [[Canada]], entering the electric power generation business, entering the information and telecom businesses, such as laying fiber optic submarine cables to [[Europe]] and the United States and the [[Internet]], and establishing many business corporations in China and Southeast Asia.  
  
===Responding to the "Wintry period for trading companies"===  
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===After 2000===
In May 1981, President Matsuo became chairman and Vice President Matsujiro Ikeda became president. During the first half of the 1980s Japan's real economic growth remained around a low 3%, and the country faced the problem of disposing of overcapacity, especially in the materials industry. In addition, because the strong [[Japanese yen|yen]] decreased export profits, manufactures reduced the commissions paid to trading companies and began bypassing the trading companies and directly exporting by themselves. This made the environment facing trading companies even more severe while at the same time other unfavorable factors made the situation worse, such as an increase in expenses, especially labor costs, and the poor performance of subsidiaries and affiliates, so this period came to be called the "wintry period for trading companies."
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On October 1, 2001, Marubeni-Itochu Steel Inc. was incorporated, the first entity established by general trading firms integrating their common business operations.
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In November 2001, as the economic situation suddenly changed after the sharp decline in stock prices in Japan, the bursting of the [[dot-com bubble]], and the [[September 11, 2001 attacks]] in the U.S., Marubeni’s consolidation efforts resulted in a massive deficit of ¥116.4 billion. The company’s performance was evaluated negatively by the [[media]] and stakeholders, and the stock price temporarily plummeted below the 60-yen level in December 2001. By 2002, the company was able to record a consolidated net profit of ¥30.3 billion. By 2006, consolidated net profit amounted to ¥119.3 billion. Today there are 120 Marubeni Group offices and more than 500 associated companies worldwide.
  
To work out of this situation, in December 1982, President Ikeda proclaimed the Vitalize Marubeni (V.M.) initiative to company employees. The purpose of the V. M. initiative was to respond to the difficult business environment by creating a structure to fully utilize all employees based on changing the way of thinking throughout the company to strengthen business fundamentals and improve profitability, so the Company organization and human resource system were revised and a suggestion system implemented. But in January 1983 President Ikeda fell ill and in April he assumed a new position as director and advisor and Vice President Kazuo Haruna became president.  
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== Marubeni America Corporation ==
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Marubeni America, the largest overseas subsidiary of Marubeni Corporation. has its headquarters in New York City, with 7 other U.S. locations and more than 30 subsidiary and affiliated companies. It is a ''"sogo shosha"'' (general trading company), acting as an intermediary in all types of trade. It relies on human resources, intensive information gathering and financial resources, and has few fixed assets. Marubeni America independently trades in a broad range of commodities, agricultural goods, industrial machinery and natural resources, as well as serving as financiers and large-scale organizers for the global movement of products. It provides specialized services, including sales support, logistics planning, insurance, storage, financing and leasing, and engineering and construction services, and sometimes makes direct investments.<ref>Marubeni USA, [http://www.marubeni-usa.com/main.html Homepage.] Retrieved October 8, 2008.</ref> 
  
President Haruna continued the V.M. initiative proposed by former President Ikeda and espoused the importance of using operating profit to pay dividends and reserving allowance instead of relying on the sale of assets, but thereafter the Company suffered high write offs from the reorganization of affiliates, and so the Company continued to rely on income from the sale of stock and so the fiscal 1982 financial results showed that net after tax profit had fallen to ¥300 million.
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==Holdings==
 
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*Marubeni Europe plc (100 percent)
The businesses that did expand during this difficult environment were plant exports for power systems, energy, chemicals, etc., and exports of steel pipe for oil producing companies. In particular, strong orders for power systems were received from around the world, and this proved to be a major profit source for the Company from the 1980s through the first half of the 1990s.
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*Marubeni America Corporation
 
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*SHL Consolidated Plc (Malaysia)
===Strengthening of consolidated management===  
 
In June 1987, President Haruna became chairman and Vice President Tomio Tatsuno became president. In September 1985, the [[Plaza Accord]] reached at the [[Group of Five]] (Ministers of Finance and Central Bank Governors of five advanced nations) meeting resulted in the yen/dollar exchange rate, which at the time was $1 = ¥240, moving to the ¥190 level in January 1986 and then the ¥120 level in December 1987. This rapid strengthening of the yen hurt the performance of export industries, such as electric equipment and steel, which became known as the "strong yen recession." In response, the [[Bank of Japan]] executed a series of official discount rate reductions in accordance with the policy to grease the financial system using a very low interest rate.
 
 
 
The extra money made available by the low interest rate was put into stocks and land. In September 1985 the [[Nikkei 225]] for the first section of the [[Tokyo Stock Exchange]] stood at ¥12,000, but by the end of December 1989 it had climbed to an historic high of ¥38,915. Many companies used this increase in stock prices to procure funds by increasing capital by issuing at the market price or by issuing convertible bonds and then used the proceeds to invest in stocks. Marubeni also had a policy to actively increase capitalization which increased the Company's capital fourfold from ¥46.7 billion at the end of March 1986 to ¥192.9 billion at the end of March 1991 and increased shareholders' equity 3.5 times from ¥130.2 billion at the end of March 1986 to ¥457.5 billion at the end of March 1991.
 
 
 
From the beginning of the 1980s, Marubeni reorganized poorly performing subsidiaries and affiliates, which required large write offs, and to make Marubeni a profitable company, it was necessary to strengthen the entire Marubeni Group, so fiscal 1989 was made the “first consolidated year”.
 
 
 
The low interest rate activated the construction of homes and office buildings and personal consumption, such as automobile sales, was also good, so the economy recovered despite the strong yen. As a result, the Company's financial results for fiscal 1990 posted sales of ¥19.156 trillion and ordinary income of ¥54.8 billion, both records.
 
 
 
To suppress the rapid increases in land prices, however, the Bank of Japan tightened money policy, which caused a rapid drop in the price of stocks and land. This was the so-called “[[Japanese asset price bubble|burst of the bubble”.
 
  
During this time President Tatsuno fell ill, and in August he became vice chairman and Vice President Iwao Toriumi became president. To create a “Marubeni with a fresh face,” President Toriumi streamlined the administrative departments, reorganized and integrated subsidiaries and affiliates, and liquidated the Wrap Account and Fund Trust. As a result, the company unavoidably suffered a large write off, and the drop in price of bank and other stocks caused the company to post an appraisal loss on its stock portfolio, so for fiscal 1997 the company posted a net loss of ¥30.8 billion, which was the company's first loss since fiscal 1951.
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==Notes==
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<references/>
  
Despite this difficult business environment, Marubeni actively developed businesses, such as developing and importing LNG from [[Qatar]], purchasing a pulp plant in Canada, entering the electric power generation business, entering information and telecom businesses, such as fiber optic submarine cables to [[Europe]] and the United States and the Internet, and establishing many business corporations in China and Southeast Asia.
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==References==
 
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*Fujiki, Ryuzo. ''The Role of Japanese General Trading Company and Its Strategy.'' 1977.  
===From V-shaped recovery to a new leap forward===
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*Ishikawa, Akira, and Tai Nejō. ''Top Global Companies in Japan.'' Singapore: World Scientific, 2004. ISBN 9789812563040.
In April 1999, Senior Director Tohru Tsuji assumed the office of president and President Toriumi was appointed Chairman. Newly appointed President Tsuji announced “Vision 2000 Restructuring Plan” to rapidly promote drastic reforms in organizational as well as personnel systems, improvement of financial position, and streamlining of unprofitable operations. When the restructuring plan was completed in April 2001, Marubeni Corporation announced “@ction21,” a new two-year midterm business plan, aiming at “Shifting to Aggressive Operation” toward “Expansion and Evolution.
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*Kojima, Kiyoshi, and Terutomo Ozawa. ''Japan's General Trading Companies: Merchants of Economic Development.'' Development Centre studies. Paris: Development Centre of the Organisation for Economic Co-operation and Development, 1984. ISBN 9789264126442.
 
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*Marubeni Corporation. ''Business Bulletin Marubeni.'' Tokyo: Marubeni Corporation, 1900.
On October 1, 2001, Marubeni-Itochu Steel Inc. was incorporated, which was the first entity established by general trading firms integrating their common business operations. The company has since steadily recorded good financial results by making the most of the merits of its parent companies, Marubeni and Itochu.  
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*Marubeni Corporation. ''The Unique World of the Sogo Shosha.'' Tokyo: Marubeni Corporation, 1978.
 
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*Picken, Stuart D. B. ''Historical dictionary of Japanese business.'' Historical dictionaries of professions and industries, 1. Lanham, Md: Scarecrow Press, 2007. ISBN 9780810854697.
In November 2001, as the economic situation suddenly changed after the sharp decline in stock prices in Japan, the bursting of the [[dot-com bubble]], and the [[September 11, 2001 attacks]] in the US, President Tsuji decided to move up the amortization planned in “@ction21” and to collectively clear the extraordinary loss amounting to ¥208 billion in order to eliminate the potential risk of negative profit. He also announced “@ction21 “A” PLAN (“A” stands for Acceleration)” focusing on a V-shaped recovery of business performance in FY2002, in which consolidated net profit was targeted at ¥30 billion. By implementing “A” PLAN, consolidated financial results recorded a massive deficit of ¥116.4 billion, the company’s performance was evaluated negatively by the media and stakeholders, and the stock price temporarily plummeted below the 60-yen level in December 2001. Furthermore, in March 2002, a scandal ensued when it was revealed that one of our subsidiaries, Marubeni Chikusan Corporation, falsely labeled their chicken products, further damaging Marubeni Corporation’s public image.  
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*Roehl, Thomas W., and Allan Bird. ''Japanese Firms in Transition: Responding to the Globalization Challenge''. Advances in international management, v. 17. Amsterdam: Elsevier JAI, 2004. ISBN 9780762311576.
 
 
In this fateful crisis for the company, corporate executives and employees shared the same sense of crisis, and made every effort together to recover the company’s business performance. As the result, in FY2002, the company was able to record a consolidated net profit of ¥30.3 billion, achieving the vowed V-shaped recovery. The company also reinforced its internal control system among the entire Marubeni group companies including the reconstruction of compliance systems.  
 
 
 
In April 2003, President Tsuji who achieved “A” PLAN became chairman, and Executive Vice President Nobuo Katsumata was appointed president. Under newly appointed President Katsumata’s leadership, a three-year business plan named “V” PLAN (“V” stands for Vitalize) was implemented which aimed at further developing profitability and the in-house vitality revived by “A” PLAN, as well as reinforcing the foundation of profitability and improving the company’s financial position.
 
 
 
The “V” PLAN was enacted smoothly by accelerating “Selection and Concentration” based upon portfolio management. The revenue base was steadily reinforced, and the company increased its marvelous consolidated net profit each year, which amounted to a record-high of ¥34.6 billion in 2003, subsequently surpassed in 2004 by a new record-high of ¥41.2 billion. And in FY2005, the last year for the plan, the consolidated net profit amounted to¥73.8 billion, far exceeding the initial target of ¥50 billion. The financial position was also steadily improved. When the “V” PLAN was completed at the end of March 2006, net DE ratio declined to 2.83 times, which is one quarter of the initial figure of 10.3 times; and shareholders’ equity increased to ¥663.8 billion, which exceeds the net risk asset of ¥572.6 billion, enabling the company to achieve “building of financial position which reflects the risk,” one of the most important challenges of “V” PLAN.
 
 
 
Having finalized the “V” PLAN and achieved the build-up of the foundation to “restore an energetic Marubeni which can stand up to the top trading firms,” targeted by the plan, Marubeni announced, in April 2006, a new midterm business plan named the “G” PLAN. This is a two-year project aimed at consolidating the group’s sustainable development through two-way strategies: Setting up a firm “defensive” structure by upgrading the business system that had led the “V” PLAN to a big success, while introducing an “offensive” strategy including the expansion of business scope, sophistication and diversification of the trading firms’ functions, and aggressive investment in strategic sectors. The new plan targets a yield of ¥220 billion as the total consolidated net profit for the two years, among which 100 billion yen or more should be earned in a stable manner, and ensuring ROA (return on asset) to exceed 2% or higher by severely screening prime assets. It also plans new investments of ¥500 to ¥600 billion within the two years while keeping its financial position stable.
 
 
 
FY2006 was the first year of "G"PLAN. And in the first year, the Marubeni group have already recorded ¥119.3 billion as the total consolidated net profit, ensuring the “G” PLAN a good start. The Marubeni group will continue to challenge itself to ensure the success of the “G” PLAN, which targets the two “Gs,” sustainable Growth and future Glory.
 
 
 
==Offices==
 
*Osaka office: 5-7, Hommachi 2-chome, [[Chūō-ku, Osaka|Chūō-ku]], [[Osaka]], [[Osaka Prefecture]], [[Japan]]
 
*Tokyo office: 4-2, Otemachi 1-chome, [[Chiyoda, Tokyo]], Japan
 
 
 
==Holdings==
 
*[[Marubeni Europe plc]] (100%)
 
*[[Marubeni America Corporation]]
 
*[[SHL Consolidated Plc (Malaysia)]]
 
 
 
==See also==
 
*[[Marubeni Citizen-Cincom Inc.]]
 
*[[Daishowa-Marubeni International Ltd.]] ([[DMI]])
 
*[[Marubeni Network Systems]]
 
  
 
==External links==
 
==External links==
*{{en}} [http://www.marubeni.com/ www.marubeni.com]
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All links retrieved November 7, 2022.
 
 
{{TOPIX 100}}
 
  
[[Category:Companies of Japan]]
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* [http://www.marubeni.com/ Marubeni official site] {{en}}
[[Category:Companies based in Tokyo]]
 
  
[[de:Marubeni]]
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[[Category:Engineering]]
[[ja:丸紅]]
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[[category:technology]]
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[[Category:Industry and business]]
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{{Credits|Marubeni|239181189|}}

Latest revision as of 15:54, 7 November 2022

Marubeni Corporation
Type Public KK (TYO: 8002)
Founded 1858 (as private company)
1949 (division)
Headquarters Flag of Japan Tokyo, Japan
Key people Teruo Asada, President and CEO
Industry Conglomerate (Sogo shosha)


Revenue Green Arrow Up Darker.svg ¥ 596.9 billion JPY (FY 2007)
Net income Green Arrow Up Darker.svg ¥ 147.2 billion JPY (FY 2007)
Employees 28,793 (2007)


Website www.marubeni.com


Marubeni Corporation (丸紅株式会社 Marubeni Kabushiki-gaisha) (TYO: 8002) is a Japanese trading company and one of the largest sogo shosha, (general trading companies) in Japan. Marubeni has 12 business divisions: agri-marine products; chemicals; development and construction; energy; finance, logistics, and new business; forest products and general merchandise; information and communication; metals and mineral resources; plant and ship; power projects; textiles; and transportation and industrial machinery.

Marubeni's name combines the Japanese words for "circle" and "red." It was founded, in 1858, from humble beginnings. Company founder, Chubei Itoh, began the company by peddling Ohmi linen on a market circuit. In 1872, he opened a wholesale drapery store, "Benichu," in Osaka, and gradually expanded into foreign trade with commercial goods. His son, Chubei Itoh II, brought a practical and international outlook to the business. Itoh II studied in England for one year and developed a new business model. Itoh II purchased directly from manufacturers instead of through foreign trading houses. He then developed the company further by the use of low-interest local capital to finance exporting products from Japan to several other countries. Marubeni continued expanding its trade into many industries and like most others, benefited when demand for its products was increased by economic expansion, and weathering economic downturns. There are 120 Marubeni Group offices worldwide with more than 500 associated companies.

History

Foundation

Osaka head office of Marubeni in Chuo-ku, Osaka, Japan

Chubei Itoh (1842–1903), the founder of Marubeni was born in what is now called Toyosato-cho, Inukami District, Shiga Prefecture, the second son of Chobei Itoh. From an early age he was involved in the family trading business, making his first business trip when he was eleven years old with his brother Manjiro, to sell goods in the town of Goso in Houzuki Village. Marubeni considers itself to have been founded in 1858, when Chubei began peddling Ohmi linen, following the mochikudari system. Chubei traveled a regular circuit of market towns, taking orders with a sample book and having the goods delivered by express messenger to a designated inn. The following year he observed the foreign trade activity in Nagasaki and determined to open his own trading business at the earliest opportunity. In 1861, Chubei joined the Eiku trade association of Ohmi merchants who took drapery and cloth goods to Kyushu, and later became a representative of this organization.[1]

At that time it was fashionable to open shops in Kyoto, but in 1872, Chubei challenged convention by opening a drapery shop, Benichu, a drapery shop, at Motomachi 2 chome in Osaka. That same year, Chubei's older brother, Chobei Itoh opened Itoh-chobei Shoten, a drapery wholesale store in Hakata, Kyushu. Chubei divided his profits equally between providing for his family, building his business and paying his employees. He loved freedom and rationality, telling his staff that "prosperity can only be found where true liberty lies." and encouraging younger staff to openly voice their opinions at regular in-house meetings. He hosted sukiyaki parties with his staff each month on days ending on a "1" or a "6," and regularly organized social events for them to attend plays or sumo matches.[2]

Chubei’s personal motto was, "Trade is the karma of the Bodhisattva, the nobility of the way of trade is to achieve the will of Buddha by filling the world's wants from the benefits of buying and selling; true profit from work (a merchant's profits can only be gained by the merchant's own efforts; only such profit is true profit).”

In 1883, Chubei began to use the “Beni” character as the store's logo. In 1884, Chubei changed his store’s name to Itoh Honten (headquarters), and opened Itoh Kyoto Store, a drapery wholesale store in Kyoto. In 1885, he formed the foreign trading company "Itoh Sotoumi-gumi" with Tetsujiro Sotoumi, steadily expanding the business to trade in general merchandise of many kinds. Later he opened Itoh West Store, a woolen fabric import and wholesale store, in Osaka, and the Itoh Itomise (Thread and Yarn Store), and other enterprises. He served as the headman of Toyosato Village (now Toyosato Town) until his death in 1903.

C. Itoh & Co.

Chubei Itoh was succeeded by his son, Chubei Itoh II. The beginning of the Russo-Japanese War in 1904 created a sudden demand for cotton in Japan, causing the industry to develop dramatically. Itoh Honten rapidly developed its overseas trade, setting up an export department in 1904, a Shanghai office in 1906 and a branch office in Gyeong-seong (Seoul), Korea in 1907. In 1908 the four businesses and one factory previously run by different branches of the Itoh family were consolidated into one company, with Chubei Itoh II as the managing director, and opened a Tokyo branch. The export department was set up as a separate business with the name of Itoh Exports, opened branch offices in Hankou and Manila, and established a joint venture called ‘Kyoekisha’ using local capital in Korea and China.

In 1909–1910, Chubei Itoh II went abroad to study in England, visiting the U.S.A. on his way. While in England, he gained experience as a businessman and formulated new trading methods that became the basis of Marubeni today, such as trading directly with businesses in the U.K. rather than through the foreign trading houses to gain more profit for Japan, and making use of low interest rates in the U.K. to finance importing. Chubei Itoh II’s international outlook and practical approach to business were the key to Marubeni’s growth into a major international corporation.

In 1914, the Company was reorganized from a proprietorship into C. Itoh & Co. In 1918, the limited partnership was divided into Itochu Shoten Ltd. with the Main store and Kyoto store at its center, and C. Itoh & Co., Ltd. with the yarn store and the Kobe Branch at its center. These two companies were the forerunners to Marubeni Corporation and Itochu Corporation, respectively.

Marubeni Shoten era

In the wake of World War I (1914–1918) and the Great Depression, the commodity market plummeted, bankrupting many companies and banks, and Itochu Shoten Ltd. and C. Itoh & Co., Ltd. also suffered large losses. In response, C. Itoh & Co., Ltd. spun off its trading division, which was the Kobe branch, and its overseas branches, into Daido Boeki Kaisha Ltd. In 1920. Daido Boeki opened new branches and offices in several countries, such as the Philippines, China, Indochina, and Indonesia, and grew steadily by handling textiles, sundries, linen, rubber, and other products.

In March 1921, Itochu Shoten merged with Ito-chobei Shoten to form Marubeni Shoten Ltd. At that time the company had only one branch in Kyoto, and was at best a textiles wholesaler, handing silk and wool fabrics. As Japan entered the Showa Era (1926–1989) there was a revolution in women’s fashions, from Japanese style to Western style. From 1924 onwards, Marubeni Shoten Ltd. traded in processed cotton, which increased in importance each year until it became the principal export product. Kureha Cotton Spinning was founded in 1929. Marubeni Shoten Ltd. increased its trade in raw materials such as cotton, rayon and rayon yarn, central to the development of the Japanese textile industry, and became a major textile trading concern. In 1931, the Osaka branch was established, concentrated on trading, and eventually Marubeni Shoten Ltd. opened branches and offices throughout China and in India and expanded its trade to include construction materials, machinery, sundries, food products, and other materials in addition to textiles. In 1937, the Osaka branch's sales exceeded those of the Main store, accounting for 62 percent of overall sales. Branches were opened in Calcutta, Semarang, Bangkok, Bombay, and New York, and an international network of representatives operated in South America, Africa, and Australia.

Sanko and Daiken

As the business performance of Marubeni Shoten, C. Itoh & Co., Ltd., and others recovered, the move to unify all of the Ito family business strengthened. In September 1941, the three companies of Kishimoto Shoten Ltd., a steel trading company for which Chubei Itoh served as an officer, Marubeni Shoten and C. Itoh & Co., Ltd., were merged to form Sanko Kabusiki Kaisha Ltd. Soon after, however, World War II erupted in the Pacific, resulting in strong economic regulation, which made conducting company activities difficult and limited trading to China and Southeast Asia.

In September 1944, the three companies of Sanko, Daido Boeki, and Kureha Cotton Spinning Co., Ltd. were merged to form Daiken Co., Ltd. It had 103 affiliated companies inside and outside of Japan. The production division alone was involved in 16 different major company groups; the commercial division handled shipping and delivery of textiles, heavy industry, chemical industry products, grains, and fertilizer; and also provided materials to the military. When the war ended soon afterward, the company lost all of its overseas assets.

When the war ended in 1945, Daiken had more than 5,000 employees. Of these, approximately 2,200 were military personnel or were involved in military work, and approximately 1,000 people were in China and Southeast Asia. These people were brought back to Japan after the war, but many of them had to be laid off due to the economic recession in Japan.

In February 1948, Daiken was identified as subject to the Law for Elimination of Excessive Concentrations of Economic Power, one of the measures to break up the Japanese zaibatsu (large holding companies). It was divided into the four companies of Marubeni Co., Ltd., C. Itoh & Co., Ltd., Kureha Cotton Spinning Co., Ltd., and Amagasaki Nail Work Ltd.

Launch of Marubeni

On December 1, 1949, Marubeni Co., Ltd. was established based on the commercial supremacy and employees of the old Marubeni Shoten, Daido Boeki and Kishimoto Shoten, with Shinobu Ichikawa from Marubeni Shoten as president. The new company was capitalized at ¥150 million, had 1,232 employees, and used the old Marubeni Shoten building in Motomachi 3 chome, Higashi Ward, Osaka as its headquarters. The company had two branches in Tokyo, and other branches in Kobe, Kyoto, Nagoya, Hiroshima, Fukui, Kokura, and Yokohama, but not a single overseas office.

On December 1, 1949, Japanese private companies were allowed to export; in January 1950, imports were liberalized. The first fiscal year (December 1949 to March 1950) Marubeni Co., Ltd. had sales of ¥5 billion, 80percent of which were from textiles, so the Company was a textile-centered trading company.

The start of the Korean War in June 1950, created an extraordinary demand that improved market conditions, resulting in a dramatic increase in sales, ¥50.6 billion for fiscal 1950. When an agreement was reached in the cease fire talks in 1951, the markets for textiles, soy beans, rubber, and leather collapsed, causing big losses, and forcing the company to ask for help from banks and spinning companies.

Marubeni’s first overseas office was established in New York in April 1951, and in November of the same year Marubeni Company (New York) Inc, was established as its first overseas subsidiary. Other offices were established in Karachi and Portland in 1951, followed in 1952 by offices in London, Singapore, Mexico, Manila, Hong Kong and other cities. By the end of 1954 the company had 22 overseas subsidiaries and numerous overseas representatives, making it a true trading company. As the Japanese economy expanded, Marubeni’s sales grew to ¥134.9 billion in 1953, and its capital reached ¥1.5 billion in February 1955.

Merger with Iida

In 1955, Iida & Co., Ltd., which had sustained a large loss from the collapse of the soybean market, sought a merger with Marubeni, in accordance with a government policy ot strengthen trading companies. On September 1, 1955, Marubeni and Iida merged to form Marubeni-Iida Co., Ltd. Marubeni profited from Iida & Co., Ltd.’s strong position in the domestic steel trade, and its dominance in the wool, leather, machinery, and fuel trades.

Marubeni-Iida established a chemicals department in 1957, and mediated the transfer of polyethylene production technology from the United States to Showa Denko. In 1958 it actively pioneered new business fields, such as the start of automobile exports to the United States by Nissan Motors, which greatly expanded the sales of machinery and other products handled by the non-textile division. Sales in 1965 reached ¥1.1351 trillion, and the company employed 5,943 workers in more than 70 companies in Japan alone.

Merger with Totsu

In April 1966, Marubeni merged with Totsu Co., Ltd., a trading company specializing in metals and a sales agents for Nippon Kokan K.K. (now JFE). The merger with Totsu created a close relationship between Marubeni-Iida and NKK and doubled the sales of Marubeni-Iida's previously weak metals division.

During the second half of the 1960s, when Japan's real economic growth exceeded 10percent, the country's industrial output, such as steel and automobiles, increased rapidly, creating a growing demand for raw materials. In response, Marubeni-Iida began developing a variety of businesses that are now the core of the company, such as importing iron ore from Australia and raw coal from Canada; constructing a pulp plant in Canada; operating salt fields in Australia; forming a textile joint venture in Thailand; establishing an automobile sales company in Belgium; and constructing a steel distribution processing center, grain silos, chemical tanks, and high-rise condominiums in Japan.

After the merger with Iida in 1955, Marubeni-Iida had a close relationship with Fuji Bank, leading to the formation in 1960 of Fuyo Development Co., Ltd. (now Fuyo General Development and Finance Co., Ltd.), with 17 other companies including the Fuji Bank, NKK, Showa Denko, and Taisei Corporation. In 1966 the Fuyo Conference, consisting of the presidents of Fuyo Group companies was formed, and Fuyo Air Services Co., Ltd. (1968) and Fuyo General Lease Co., Ltd. (1969) were established by its member companies, including Marubeni-Iida.

Company name changed to Marubeni Corporation

Tokyo head office of Marubeni in Chiyoda, Tokyo, Japan

On January 1, 1972, the company changed its name from Marubeni-Iida to Marubeni Corporation. During the same month, the office of the Tokyo headquarters was moved from the Otemachi Building to the newly constructed Marubeni Building at Takebashi Station in Tokyo, which is still the headquarters office building today.

In July, 1973, the Company merged with Nanyo Bussan Co., Ltd., a trading company specializing in non-ferrous metals, and acquired its interests in copper ore imports.

Oil crisis and criticism of trading companies

In August 1971, alarmed by its growing trade deficit ("Nixon Shock"), the United States ceased the conversion of dollars to gold and established import surcharges. The major world currencies from a fixed exchange rate system to a variable exchange rate system, causing the yen to strengthen. The Japanese government, worried about a strong yen recession, implemented aggressive fiscal support, easier financing, and a low-interest-rate policy. This, coupled with a rise in grain prices due to poor weather overseas and a rise in the price of crude oil when the Yom Kippur War broke out, caused runaway inflation in Japan. The mass media blamed the trading companies for the price increases, accusing them of cornering the market or hoarding. Until that time, the general trading companies had admired as Japan's economic pioneers for developing overseas markets and investing in new businesses, but as sales grew to several trillion yen, they were criticized for their sheer size. As the Japanese economy became massive, the growth slowed and the emphasis changed from heavy industry, such as steel and heavy equipment, to light industry, such as electronics.

Lockheed scandal

In February 1976, Marubeni’s credibility was damaged when it was implicated in a scandal involving the sale of Lockheed's wide-bodied Tri-Star passenger plane to Japan's largest domestic carrier, ANA. Lockheed contracted Marubeni to act as its representative in the multi-million dollar negotiations. The former vice-chairman of Lockheed, Carl Kotchian, testified that a Marubeni official made arrangements for Lockheed to pay US$300,000 (US$50,000 for each of six planes originally ordered) to the president of the airline, as well as US$100,000 to six government officials, in accordance with "Japanese business practices," to secure the contract. By July 1976, prosecutors had arrested nearly 20 officials of Marubeni and All Nippon Airways. The scandal nearly brought down the Japanese government. The case directly contributed to passage of the Foreign Corrupt Practices Act (1977) in the United States, which forbids U.S. companies from making payments to officials of foreign governments for the purpose of obtaining or retaining business.

Marubeni was seriously damaged by the public image resulting from the scandal; more than 40 municipalities canceled contracts, and several international ventures were terminated. The company implemented a reform of its management structure, distributing many of the president's administrative responsibilities to a board of senior executives and adding checks and balances at the executive level. Marubeni recovered quickly and by 1977, its trading volume was double that of 1973. Marubeni consolidated its international trading network and expanded its business in the United States, Australia, Brazil, Britain, West Germany, and Sweden. Marubeni also opened or expanded offices in the Soviet Union, the People's Republic of China, the Middle East, and Africa. In the early 1980s Marubeni was involved in the development of coal mines in the United States and Australia, a copper mine in Papua New Guinea, and nonferrous metal mines in Australia and the Philippines.[3]

"Wintry period for trading companies"

During the first half of the 1980s Japan's real economic growth remained around a low 3percent, and the country faced the problem of disposing of overcapacity, especially in the materials industry. The strong yen decreased export profits, leading manufactures to reduce the commissions paid to trading companies or bypass them altogether and directly export their own products. Increases in expenses and labor costs, and the poor performance of subsidiaries and affiliates, increased the trading companies’ difficulties, and the period came to be called the "wintry period for trading companies."

In December 1982, a Vitalize Marubeni (V.M.) initiative to strengthen business fundamentals and improve profitability was implemented, but the company suffered costly write-offs from the reorganization of its subsidiaries, and was forced to rely on income from the sale of stock. The businesses that did expand during this period were plant exports for power systems, energy, chemicals, and exports of steel pipe for oil producing companies. Orders for power systems from around the world were a major source of profit from the 1980s through the first half of the 1990s.

After the “burst of the Japanese bubble” in the 1990s, Marubeni suffered a large write off, and the drop in price of bank and other stocks caused the company to post a net loss in 1997 of ¥30.8 billion, the company's first loss since fiscal 1951. Despite this difficult business environment, Marubeni actively developed businesses, such as developing and importing LNG from Qatar, purchasing a pulp plant in Canada, entering the electric power generation business, entering the information and telecom businesses, such as laying fiber optic submarine cables to Europe and the United States and the Internet, and establishing many business corporations in China and Southeast Asia.

After 2000

On October 1, 2001, Marubeni-Itochu Steel Inc. was incorporated, the first entity established by general trading firms integrating their common business operations. In November 2001, as the economic situation suddenly changed after the sharp decline in stock prices in Japan, the bursting of the dot-com bubble, and the September 11, 2001 attacks in the U.S., Marubeni’s consolidation efforts resulted in a massive deficit of ¥116.4 billion. The company’s performance was evaluated negatively by the media and stakeholders, and the stock price temporarily plummeted below the 60-yen level in December 2001. By 2002, the company was able to record a consolidated net profit of ¥30.3 billion. By 2006, consolidated net profit amounted to ¥119.3 billion. Today there are 120 Marubeni Group offices and more than 500 associated companies worldwide.

Marubeni America Corporation

Marubeni America, the largest overseas subsidiary of Marubeni Corporation. has its headquarters in New York City, with 7 other U.S. locations and more than 30 subsidiary and affiliated companies. It is a "sogo shosha" (general trading company), acting as an intermediary in all types of trade. It relies on human resources, intensive information gathering and financial resources, and has few fixed assets. Marubeni America independently trades in a broad range of commodities, agricultural goods, industrial machinery and natural resources, as well as serving as financiers and large-scale organizers for the global movement of products. It provides specialized services, including sales support, logistics planning, insurance, storage, financing and leasing, and engineering and construction services, and sometimes makes direct investments.[4]

Holdings

  • Marubeni Europe plc (100 percent)
  • Marubeni America Corporation
  • SHL Consolidated Plc (Malaysia)

Notes

  1. Itochu Group, Chubei Itoh Retrieved October 8, 2008.
  2. Ibid.
  3. Answers.com, Marubeni Corporation. Retrieved October 9, 2008.
  4. Marubeni USA, Homepage. Retrieved October 8, 2008.

References
ISBN links support NWE through referral fees

  • Fujiki, Ryuzo. The Role of Japanese General Trading Company and Its Strategy. 1977.
  • Ishikawa, Akira, and Tai Nejō. Top Global Companies in Japan. Singapore: World Scientific, 2004. ISBN 9789812563040.
  • Kojima, Kiyoshi, and Terutomo Ozawa. Japan's General Trading Companies: Merchants of Economic Development. Development Centre studies. Paris: Development Centre of the Organisation for Economic Co-operation and Development, 1984. ISBN 9789264126442.
  • Marubeni Corporation. Business Bulletin Marubeni. Tokyo: Marubeni Corporation, 1900.
  • Marubeni Corporation. The Unique World of the Sogo Shosha. Tokyo: Marubeni Corporation, 1978.
  • Picken, Stuart D. B. Historical dictionary of Japanese business. Historical dictionaries of professions and industries, 1. Lanham, Md: Scarecrow Press, 2007. ISBN 9780810854697.
  • Roehl, Thomas W., and Allan Bird. Japanese Firms in Transition: Responding to the Globalization Challenge. Advances in international management, v. 17. Amsterdam: Elsevier JAI, 2004. ISBN 9780762311576.

External links

All links retrieved November 7, 2022.

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