Mitsui & Co“Our philosophy is challenge and innovation.”

Mitsui & Co. is one of the world’s largest and most diversified trading, investment and service companies with a long history. The historic company, which was the first Japanese trading house to enter Germany in 1899, has developed from a pure trading company into a global investment group that unites a large number of companies and is active in areas ranging from raw materials to pioneering sustainability technologies. J-BIG spoke with Georg Buellesbach, Managing Director of Mitsui & Co. Deutschland GmbH, about his company’s eventful history, its current business strategy with 16 business units, the role of the German subsidiary and its future plans in the areas of sustainability and the energy transition.

J-BIG: The origins of Mitsui & Co. date back many hundreds of years. How did this extraordinary corporate history begin?

Georg Buellesbach: There are many stories about the origins of Mitsui. According to one of these, a samurai came across three springs while walking on his land. In one of them, he found a treasure, and so he named himself Mitsui, which means ‘three springs’ in Japanese. This is said to be the mythical origin of the Mitsui family.

The historical facts begin in the early 17th century in Matsusaka, in present-day Mie Prefecture. The Mitsui were originally a samurai family who had to give up their title after a defeat against Oda Nobunaga and were resettled. Under Takatoshi Mitsui, who was born in 1622, the Mitsui family developed into a successful merchant family. He travelled to Edo, now Tokyo, and opened a textile shop called ‘Echigoya,’ which sold silk for kimonos.

Traditionally, textile shops did not sell their goods directly from the store. Instead, they visited customers at home, took orders on account, and delivered the products to their homes. What made Takatoshi’s business unusual was his introduction of innovative and flexible sales methods, such as ‘cash payment at fixed prices’ and selling products by the piece instead of in large quantities. These methods enabled Echigoya to grow into the largest textile shop of the Edo period. Incidentally, the shop is the predecessor of today’s Isetan Mitsukoshi Ltd., one of Japan’s largest department stores. By selling fabrics for cash, the Mitsui family could also pay their taxes to the shogunate in Edo in cash instead of in the form of goods from Matsusaka. It was these financial elements that enabled Takatoshi to establish a money-changing business, which later developed into today’s Sumitomo Mitsui Banking Corporation. Success in various business sectors ultimately led to the rise of the Mitsui Group.

J-BIG: When did Mitsui begin its international expansion?

Georg Buellesbach: The decisive turning point came in the 19th century. After the end of the Edo period’s national isolation policy and Japan’s subsequent opening up, the Mitsui family realised on trips to Europe that the level of prosperity achieved through industrialisation was significantly higher there than in Japan. Following the Meiji Restoration, Japan’s clear goal was to catch up with and overtake the major economic powers, the USA and Europe.

In 1876, the historic Mitsui & Co. trading company, or Mitsui Bussan in Japanese, was founded with just 16 employees. Under Takashi Masuda, the first president who spoke fluent English, the company began to systematically do business abroad. The first branches were opened in Shanghai, Paris, Hong Kong, New York and London. The former Mitsui & Co. quickly became a dominant player in the Japanese export of silk fabrics, coal and rice, but above all in the import of industrial machinery from Europe.

In the 19th century, cotton spinning experienced rapid growth in Japan. The former Mitsui & Co. contributed significantly to strengthening the industry by importing numerous looms. At that time, we also supported the inventor Sakichi Toyoda, who had founded a loom company that laid the foundation for today’s Toyota Motor Corporation.

Thanks to the successful development of these business areas, by 1909 the company had achieved a 25.9 per cent share of Japan’s exports and a 22.8 per cent share of its imports.

J-BIG: How did Mitsui come to Germany?

Georg Buellesbach: The history of the former Mitsui & Co. in Germany began back in 1899, when Sadaichiro Takemura, the first representative of the historic Mitsui & Co., opened an office in Hamburg. This made us the first Japanese trading company to come to Germany. Hamburg was chosen as the location because the port provided access to a large number of trade routes at the time.

Several important technologies were then purchased in Germany, such as shipbuilding technology. There was a shipyard in Japan for which the former Mitsui & Co. purchased the first diesel engine from MAN in 1924. Thanks to these technological acquisitions, the historic Mitsui & Co. grew steadily until the Second World War and was one of the large zaibatsu, the powerful conglomerates of the time in Japan.

Today’s Mitsui & Co. Deutschland GmbH was officially re-established in 1954 in Hamburg. A branch office was opened in Duesseldorf as early as 1955, making us one of the first Japanese companies to settle there and helping to spark the city’s subsequent Japan boom. In 1962, the headquarters moved from Hamburg to Duesseldorf, as the city and the surrounding Ruhr area had a strong steel industry and were at the heart of Germany’s post-war economy.

J-BIG: You refer to the former and current Mitsui & Co. – does that indicate a break in the company’s history?

Georg Buellesbach: That is correct, and it is an important point in our history. The former Mitsui & Co. has no legal connection to the current Mitsui & Co., because the Mitsui Group was broken up after the Second World War by the American occupying powers, like the other zaibatsu. It was split into 220 separate entities in order to disperse overly concentrated power structures.

Previously, the former Mitsui & Co. had owned a large mining business, shipyards, steelworks and many production facilities, all of which were dissolved. The Mitsui Group reorganised itself in the 1950s as a horizontal alliance of independent companies from various industries after the end of the occupation of Japan.

Today’s Mitsui & Co. was formed through mergers of several companies that had emerged after the dissolution. These joined together in 1947 to form Daiichi Bussan Kaisha, Ltd. In 1959, it merged with other trading companies and changed its name to Mitsui & Co., Ltd. Initially, the company focused entirely on trading and did not have its own production facilities, but it soon acquired them.

J-BIG: How was Mitsui & Co. able to re-establish itself so quickly and successfully as one of Japan’s leading trading companies after the war?

Georg Buellesbach: As the former Mitsui & Co. had already had an international focus prior to the war, the company had a decisive advantage in terms of expertise in foreign markets and language skills. Good English skills remained rare in Japan for a long time, meaning Japanese producers lacked insight into global affairs due to their language skills. Thanks to the network of offices abroad and the English proficiency of many of its employees, Mitsui was able to rebuild its strong position early on.

Mitsui & Co. has always focused on global development. For example, we already had a worldwide telex network in the 1970s, enabling us to exchange information quickly and maintain a competitive advantage. Mitsui & Co. has played a pioneering role in many areas. In the 1970s, for instance, we were the first to recognise the potential of the large gas reserves in Abu Dhabi for the Japanese economy. We then proposed importing liquefied gas to Japan. We also invested in iron ore mines for the Japanese steel industry, which had limited overseas investments at the time. Over time, this has proven to be an excellent business decision.

J-BIG: With the advent of the Internet, trading houses lost their information advantage. How has your business model changed since then?

Georg Buellesbach: Naturally, we had to adapt our business model significantly and demonstrate our expertise in new areas. However, we did not see this as a crisis. Our philosophy is ‘Challenge and Innovation’ – a principle that we have embraced throughout our history. We believe that our employees possess the creative curiosity needed to develop new ideas.

We have maintained our pioneering and visionary role since our inception, and we continue to enjoy a strong market advantage thanks to our comprehensive trading expertise in numerous industries. From the post-World War II era to the present day, Mitsui & Co. has shifted its focus from pure trading to strategic investment. Many trading activities have been transferred from our headquarters in Tokyo – for example, to Mitsui Bussan Chemicals Co., Ltd. and Mitsui & Co. Steel Ltd. In addition to trading, Mitsui & Co.’s business today focuses on growth through investment and portfolio management as well as new project development.

J-BIG: Can you give us a specific example of how Mitsui & Co.’s trading activities work today?

Georg Buellesbach: Our activities always begin with identifying new market needs. We then gradually build up our trade, gain expertise and invest in related areas where we see potential. Our aim is to build cross-industry business clusters and, through these, provide solutions tailored to societal needs and issues.

Take methanol, for example, an organic alcohol that is used in a wide range of areas. Our company has been trading methanol worldwide for many years and therefore knows the market, suppliers and customers very well. Within Mitsui & Co., there is a methanol department that trades methanol in cooperation with offices around the world, including Houston, Singapore, Duesseldorf and Brussels.

Once the business had grown to a certain size, we seized an investment opportunity in Saudi Arabia and Texas, USA, where the main raw material, cheap gas, is available. This investment enabled us to set up our own production facilities and significantly expand our business. The next phase of our activities: When our customers are interested in a specific product or new technology, we are often the right point of contact. For instance, Maersk, a Danish transport and logistics group, invited us to consider investment in green methanol. We identified a Danish company, European Energy, which is developing a solar-powered e-methanol project in the European market. We invested in this project and are now able to supply green methanol.

J-BIG: How big is Mitsui & Co. today in terms of key figures – worldwide and specifically in Germany?

Georg Buellesbach: In addition to its headquarters in Tokyo, Mitsui maintains a global network of 124 offices in 62 countries and regions. We generate approximately USD 100 billion in sales and employ a total of around 5,400 people in our headquarters and the trading subsidiaries worldwide – 56,400 in the consolidated group. Here in Europe, we have 14 offices in 13 countries on the trading subsidiaries level and employ around 450 people.

in addition to its headquarters in Dueseldorf, Mitsui & Co. Deutschland GmbH has two other branches and a representative office in Central Eastern Europe. Our annual turnover is approximately 800 million euros, and we employ 165 people, 145 of whom are based in Duesseldorf. Mitsui & Co. Deutschland GmbH is an important and large part of the Mitsui & Co. Europe Ltd. company group. We belong to the Europe Bloc headquartered in London, one of the regional organisations of Mitsui & Co., Ltd.

J-BIG: What business areas is Mitsui & Co. focusing on today?

Georg Buellesbach: The areas in which we operate are multifaceted. We have 16 business units, some of which are more traditional while others are newer. However, we are constantly seeking to identify future potential and open up new fields in all of them. The 16 business units can be divided into seven main categories: Mineral & Metal Resources, Machinery & Infrastructure, Iron & Steel Products, Innovation & Corporate Development, Energy, Chemicals, and Lifestyle.

The Iron & Steel Products Business Unit is part of our traditional business and still accounts for a large part of our operations today. In recent years, for example, decarbonisation has been a major topic. From both a European and German perspective, we hold a strong position in the electrical steel sector.

Our energy-related business encompasses four specialised business units and is a major focus area. The Energy Business Unit I concentrates primarily on oil, while Energy Business Unit II focuses on LNG (liquefied natural gas). The Infrastructure Projects Business Unit concentrates on our power generation projects and recently achieved its target of 30 percent renewable energy, with wind, hydro and solar – ahead of the original deadline of 2030. On top of that, Mitsui & Co. wants to be net zero by 2050, with the interim goal of halving our GHG emissions by 2035 (compared to 2020). This has led to the creation of the Energy Solutions Business Unit, through which we are investing more extensively in areas such as carbon solutions, hydrogen and next generation fuels.

We also have a large mobility division. Mobility Business Unit I focuses primarily on automobiles, machinery for the construction and mining industry and the railway sector. Mobility Business Unit II is responsible for marine, aviation and aerospace. We are very active in ship sales, for example, and have around 120 ships built and sold each year.

Through our Basic Materials Business, which deals with petrochemicals such as methanol and ammonia, we are active in all major engineering plastics and trade in the raw materials used in plastics, which are found in products such as mobile phones and washing machines. The Basic Materials Business is a division that is completely global in scope and, unlike our other business units, remains primarily focused on trading rather than investment.

Then there is the Wellness Business, through which we invest in hospitals in Asia, pharmaceutical distribution and big data development. Additional business units include the Food Business, the IT & Communication Business and the Infrastructure Projects Business.

J-BIG: What areas are the focus in Germany?

Georg Buellesbach: Initially, we traded mainly in chemicals, then PVC raw materials were added, and the machinery business also grew. In the mobility sector, for example, we were the main importer of all Yamaha motorcycles and Subaru cars at the time. We also supported electronics manufacturers by trading products such as Nintendo games and Toshiba electronics. Over time, as these companies expanded their own operations in Germany, they gradually took over local distribution themselves, reflecting their growing presence and capabilities in the market. Today, our most important business areas range from chemicals and plastics to steel, infrastructure projects, energy solutions and mobility. As the European market, and Germany in particular, is already well developed in the area of sustainability, Mitsui & Co. Deutschland GmbH plays an important role in the further development of these topics.

J-BIG: With such a comprehensive business portfolio, how is the company organised?

Georg Buellesbach: Each business division in the Europe Bloc reports directly to the Tokyo headquarters. Responsibility for the budget lies with Tokyo. The headquarters sets certain topics and goals, such as energy transition, for the financial year or for longer periods. Clear objectives are formulated in the form of one- and three-year plans as well as long-term visions. The business units are then responsible for implementing these plans.

Nevertheless, our company traditionally maintained a strong sense of cohesion, particularly in the joint development of new businesses and the integration of diverse industries. Our CEO places great importance on having a concrete vision for the future because planning for the next ten years – a shared horizon – unites the entire company.

As a part of the corporate organisation of Mitsui & Co., I am responsible for liaising between the individual business units, identifying opportunities for collaboration among them. We consider business development as a whole and decide which of our business areas we can bring together. When it comes to investments, we think in clusters. We consider which areas fit our business and how we can grow while creating added value for society. Trade provides the basis for our investments and gives us the necessary insights: How secure is our investment? Do we know these markets? Do we know the players?

J-BIG: What strategic goals is Mitsui & Co. pursuing in Germany for the coming years?

Georg Buellesbach: Our objectives can be divided into different categories. On the one hand, we look at the geopolitical situation and consider what role we want to play. On the other hand, we look at possible partnerships: Who do we want to work more closely with? Who are the big companies in Germany that can make a difference? Another major topic is, of course, human resources – how do we want to develop our staff and what kind of staff will we need in ten years?

In terms of business areas, sustainability has long been the dominant goal in Europe. The initial enthusiasm has waned somewhat, as companies are now questioning what can realistically be achieved as the 2030 commitments draw nearer. However, sustainability is a topic that continues to grow in importance and remains a major competitive advantage, particularly in Germany.

Many companies are now looking not only at how they can become more sustainable, but also at how sustainability solutions can be made more cost-effective or efficient. Questions such as ‘How can I produce energy more cheaply?’ or ‘How can I build a plant that requires less energy?’ are becoming increasingly important. Technological change does not happen overnight and requires a completely new infrastructure, which we aim to support through our targeted investments and cross-industry market knowledge.

For us in Germany, the entire recycling sector is also of great interest at present. We are conducting an internal study on waste management in the sense of ‘Waste to X’ – for example, what can be made from plastic waste – and have many recycling projects in the pipeline.

J-BIG: What factors are crucial to ensuring your success in the coming years?

Georg Buellesbach: Thanks to our highly diversified position, Mitsui & Co. has a solid foundation overall. We have a strong natural resources segment, which generates a large part of our profits. Even when we invest in new areas, it is important to have this foundation of solid business areas that generate reliable income.

Since we do not develop technology and produce very little ourselves, we rely on partnerships. The most important thing is that our business proposal fits our partner’s needs and our joint business aligns with the strategies of both sides. We avoid standalone areas and always look at how new business can be integrated into our clusters.

For us in Europe, it is essential to tap into new business areas. We are working on expanding our business domain. Our cooperation with the Japanese headquarters is going very well, and the European-Japanese free trade agreement creates a wide range of opportunities for us. Our position at the forefront of sustainability here in Europe enables us to provide valuable support and identify opportunities for collaboration. I see a lot of potential here for the future.