Trust Recovery Growth Vitalization - Marubeni

Strategy by Business Segment
Metals & Mineral Resources Division
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Building a business base to weather market changes
During the past three years, efforts to bolster the division structurally
through organizational enhancements and tackling
problem assets have paid off. Today, the division possesses an
improved financial position and mostly highly productive assets,
and is prepared to assume a more aggressive posture. Moving
forward, as we invest in increasingly larger-scale projects, we
plan to sustain project valuation and invest in projects where
risks can be more easily managed. The goal is to create an
earnings structure that can steadily generate profits even under
adverse market conditions.
Division Strategies and Strengths
Through the development of ore and coal mines, and participation
in smelting projects overseas, the Metals & Mineral
Resources Division secures its own supply of resources and
works to boost the profitability of its businesses. At the same
time, the division engages in trading and is involved in downstream
businesses that harness metal resources, notably electronic
materials. In other words, the division aims to build a
vertically integrated value chain covering every stage, from
upstream to downstream areas, and links its extensive lineup of
products, as well as expertise, experience and a wide range of
trading house functions to maximize earnings.
In the fiscal year ended March 31, 2005, China’s powerful
economic growth fueled tight supply and demand dynamics in
the market that drove prices higher for many products, including
iron ore, coal, ferro alloys, steel scrap and other raw materials for
steel production, as well as copper, aluminum and other nonferrous
metals. In this climate, the division pushed forward in
upstream areas with resource projects and these efforts paid off
in the form of higher profitability. From a medium- to long-term
perspective, these projects will steadily bear fruit.
The division’s trading company functions, backed by its
wealth of experience and information capabilities, also assume a
Tadatsugu Nakajima
Corporate Senior Vice President, COO
prominent role as it strives to deliver products to customers in
the volumes they need, and respond rapidly to fluctuations in
product prices. Central to this is the division’s ability to supply its
own resources through investments in resource development.
In electronic materials, the division boasts the leading share
of aluminum disks used in hard disk drives (HDDs). Capitalizing
on the division’s product knowledge and sales expertise in the
aluminum disk business, Marubeni decided in June 2004 to form
a joint venture with Toyo Kohan Co., Ltd. and Shenzhen Kaifa
Magnetic Recording Co., Ltd., a subsidiary of China Great Wall
Computer Group Co for the manufacture and sale of glass substrates
used in HDDs. This combined investment culminated in
the establishment of Shenzhen KTM Glass Substrates Co., Ltd.
in December 2004. This reflected the move to glass substrates
from the aluminum disk manufacturing jointly conducted with
Toyo Kohan in Malaysia. Demand for glass substrates is
projected to grow sharply, particularly for use in notebook computers
and portable audio devices with large storage capacity.
The division is also taking steps to develop innovative materials
and technologies into new businesses and commercial products,
as illustrated by the nomination of its subsidiary, Marubeni
Metals Corporation, as the sole sales agent in Japan for LED
chips produced by Lumileds Lighting, LLC of the United States.