Using the Mitsubishi Materials Group's unique business model to help resolve social issues

Q. 2011 must have been a turbulent year.

We definitely faced some major upheavals in 2011, but it was also a year in which we worked flat-out to deal with risks posed to the Mitsubishi Materials Group by the threat of natural disasters. Japanese industries across the board had to contend with disasters such as the Great East Japan Earthquake and flooding in Thailand. The resulting damage had a serious impact on our business activities too, requiring a huge amount of effort to put things right again. We nonetheless pulled together as a group, and managed to restore operations and restart production even earlier than planned.
60 of our group premises were damaged by the Great East Japan Earthquake in particular. Having learnt from our experiences during the earthquake however, we were able to quickly assemble an emergency task force and take precise action when the floods hit in Thailand. If we had acted even a fraction slower, many of our customers would have been seriously affected, as well as ourselves.
Following the Great East Japan Earthquake, we reconfigured our business continuity plan (BCP) in the event of an earthquake. Having worked hard to raise awareness at each of our premises since then, we are now getting individual group companies to devise their own BCP, using ours as a model.
The Great East Japan Earthquake was a dreadful tragedy, but one of the positives to come out of it is that we have established a framework that will enable us to operate on a higher level. Although the business environment was extremely tough for a time, compounded by the record-high yen and uncertainty regarding power supplies, it underlined the strong sense of solidarity, bonds and potential that we have within the Mitsubishi Materials Group, even at times like that.
We have put in place mechanisms to enable as many group employees as possible to take part in volunteer recovery activities in the area affected by the earthquake and have continued to provide our full support. As a result, I think that many of our employees have come to realize the importance of remembering and preserving the experiences that people in the affected area have been through.

Q. Having got underway during such a turbulent year, how are you progressing with your new Medium-Term Management Plan?

We kicked off our new Medium-Term Management Plan, "Materials Premium 2013: Aiming for New Value Creation," in 2011 and have been working together as a group to achieve our goal of generating unique synergy as an integrated business, by establishing a Materials Premium. With an underlying focus on our growth strategy and enhancing our financial position, we have divided our growth strategy into two key elements.
The first of these revolves around expanding business in overseas markets, especially in emerging countries. Our strategy during this first fiscal year was to accelerate ongoing initiatives at the divisional level and to expand into new areas, in an effort to secure a foothold for growth in emerging markets in particular.
In terms of significant overseas achievements during fiscal 2012, we started production at Copper Mountain Mine in the metals sector and installed exhaust heat generation facilities in the cement sector, in an effort to further prioritize business development in China. In the advanced materials and tools sector meanwhile, we established a new company to manufacture sintered and automotive components. We also completed a new plant to manufacture end mills in Indonesia, where production is already underway. In the electronic materials and components sector, we have made development a top priority at our mother plant in Japan. We have also been working to increase production capacity and improve technical standards at the local level, by adopting mass production policies at plants in Malaysia and Thailand for instance.
This being the first year of our Medium-Term Management Plan, we don’t have any clear results or figures showing how much of a difference we have made as yet. We nonetheless have lots of projects underway and are determined to keep on pushing those projects forward so that they yield concrete results in the future.
The second key element behind our growth strategy is based on establishing "Materials Premium".
The Mitsubishi Materials Group is an integrated business spanning various different industries. Our goal is to make the most of the wide-ranging materials, products and technologies at our disposal to generate a unique kind of synergy and create new value. Our flagship smelting and cement recycling system is a zeroemission system that reuses waste products from outside sources to the fullest possible extent and effectively recycles byproducts from smelting plants into raw materials for cement plants, and vice versa. This system epitomizes what we mean by "Materials Premium." It is central to our goal of creating a recyclingoriented society, through our wide-ranging resource and recycling operations, which are amongst the Mitsubishi Materials Group's biggest strengths.

Q. Social sustainability has once again been thrust into the spotlight in the wake of the earthquake.

The Great East Japan Earthquake brought to light a number of different social issues. Japan has found itself confronted with countless challenges that need to be resolved as a result. Urgent priorities in order to restore the affected area include processing rubble, addressing energy issues and carrying out decontamination.
There are many ways in which we can contribute to this process through our operations here at the Mitsubishi Materials Group. Our cement business is a prime example. We have been taking in waste products that are difficult to treat, including rubble from the earthquake itself and growing volumes of coal ash due to Japan's increased reliance on thermal power stations, and recycling them into raw materials or thermal energy, taking great care to preserve the quality of our cement. By processing such large volumes of waste, our cement plants are playing a major role as a key piece of social infrastructure.
The earthquake has undoubtedly raised levels of disaster prevention and safety awareness amongst members of the public. As well as that however, it has underlined the importance of cement, as an essential basic material underpinning safe, secure and sustainable development, in terms of our everyday lives and disaster prevention.
A great deal of attention is being focused on the renewable energy sector too, in response to issues with power and other forms of energy. We have a proven track record in geothermal power, with operations covering everything from geological surveys at the exploration stages and steam detection technologies designed to locate geothermal resources, to actually operating power plants. As there aren’t many companies that are capable of doing all of that, we are always working to improve initiatives from a longterm standpoint so that we can live up to society’s expectations. In addition to generating geothermal energy, we also supply key components for use in technologies such as solar power, hybrid cars and electric vehicles. We want to make the most of our technologies and expertise in areas such as these so that we can make a difference to society as a group.
On a global level, environmental contamination from harmful waste is becoming an increasingly serious social issue, caused by substances such as sewage sludge, heavy metals and e-waste (waste from used electrical and electric equipment) as emerging countries struggle to keep up with their own rapid economic development. Although we are working on a number of projects aimed at harnessing the Mitsubishi Materials Group’s specialist technologies and expertise in resources, recycling and other environmental fields at the local level, we consider it our mission to contribute to society through our core operations, in order to help resolve global issues such as these.

Q. What are your thoughts on CSR within the international community, as the group continues to expand its operations overseas?

The first step when engaging in business activities overseas is to establish an understanding of the law, current affairs and national characteristics of the relevant country. Then you’ve got to overcome any specific or cultural differences so that you can blend seamlessly into the local environment as a corporate citizen. I also believe that you can only be truly successful overseas if you reinvest some of the money you earn back into the local economy, to enable your business to grow and contribute to the sustainable development of the local area.
Stakeholder communication is vitally important too. It may sound obvious, but companies have a wide range of stakeholders, all of whom have different interests. Living up to the expectations of all those stakeholders is far from easy. It is nonetheless crucial to explore different avenues of communication so that you can find a middle ground that keeps everyone happy. At our third stakeholder meeting in February 2012, we received a number of invaluable comments and suggestions from different experts. There are always opportunities to interact with customers and investors on a day-to-day basis, but the meeting underlined just how important it is to provide opportunities like that, to listen to different opinions and provide a wider range of information.
A lot of our businesses within the Mitsubishi Materials Group wouldn’t be feasible without the understanding and support of our various stakeholders, from people living in overseas mining development areas, or in the vicinity of cement plants processing waste from the earthquake, to local hot spring operators in geothermal development areas. That is why we need to adopt a more global perspective and keep on improving our communication skills.
Having had considerable experience working overseas, it seems to me that companies don’t struggle to be aware of CSR in Europe and the United States as they do here in Japan. The overriding impression is that there is no need to mention CSR because it is already ingrained in corporate cultures in Europe and the United States. In Japan, meanwhile, we cannot say that CSR is thoroughly ingrained in corporate cultures, considering we still need to be conscious of and pay close attention to CSR. We will only achieve the genuine article once CSR comes naturally, without thinking.

Q. Could you tell us about the global human resource development initiatives that you are focusing on at the moment?

Our business activities here at the Mitsubishi Materials Group rely on tens of thousands of employees. That’s why it's so important to harness the potential of individual employees and improve their skills. They are the source of our competitive edge as a company. We have set out a policy of "training for all," to give all of our employees access to training opportunities, and are committed to human resource development based on lifelong education and learning. We are particularly focused on reinforcing global human resource development. We have put in place a system to provide employees with training before being assigned overseas, spearheaded by our Group Training Center. The curriculum covers subjects such as the legal system, cultural and historical understanding, local customs, and CSR. Language skills are important too, but employees will struggle to really make a difference in other countries if they are not equipped with additional knowledge and skills such as these.
Another message I've always trying to get across to our employees is "Materials Pride." What I'm trying to say is that I want employees to go about their work with confidence and take pride in being part of a business that supplies the basic materials that underpin society. No matter how much the external environment may change, we want our employees to keep on going about their work with determination and a sense of speed, to work hard at self-improvement and to continually aspire to do better.

Q. Finally, do you have any message for the group's stakeholders?

Our Corporate Philosophy here at the Mitsubishi Materials Group is to do our bit "for people, society and the earth." The Great East Japan Earthquake made me appreciate the true meaning of that philosophy more than ever.
As a corporate group, we are committed to continually overcoming social issues and making a lasting contribution, so that we can help maintain sustainable development throughout society. I believe this is the best way to repay the trust that our shareholders have placed in us, whilst at the same time growing as a group.
I hope that we can continue to rely on the support and understanding of all of our stakeholders in the future.