SHOSHA Activities - Wide Range of Business Fields

Wide Range of Business Fields

In the following pages a varied number of business fields of major SHOSHA will be introduced. You will learn how the SHOSHA's activities cover major sections of the Japanese economy.

Steel

In the field of steel, SHOSHA sells a wide range of materials (e.g., sheet, pipes, rails, rods & wires, stainless steel, and specialty steel) to customers inside and outside Japan. They not only make deliveries on a “just-in-time” basis through their network of domestic and foreign agencies, but may also have their own inventories and offer value-added fabricating services such as cutting coil supplied from steel makers to meet customer needs and plating at surface processing plants of their own establishment.

Profile of Business Fields

Non-Ferrous Metals

Besides iron and steel, the SHOSHA handle all other types of metals, including aluminum, copper, nickel, and rare metals. Many non-ferrous metals are subject to intense price fluctuation. To assure a stable supply on a long-term basis, the SHOSHA are investing in various mines and going into the smelting business. Another role is to develop new applications and demand for such metals. In addition to the traditional physical trading based on actual demand, they are also involved in metals dealings, the creation of diverse investment commodities making full use of derivatives, and the establishment and sales of commodity funds.

Mineral Resources

The development and import of iron ore and other mineral resources are another traditional business of the SHOSHA that have been a vital engine for economic growth in resource-poor Japan.
The SHOSHA work for a steady supply of mineral resources through their integrated scope of services, ranging from natural resources exploration and negotiations with the relevant governments and interested parties to the sustainable maintenance of the ownership rights and interests, through financing and direct equity participation, and in the management of mine operations themselves.

Profile of Business Fields

Machinery and Plants

The SHOSHA handle various kinds of machinery including construction machinery and machine tools. Particularly notable is their ability to propose and coordinate, independent of specific manufacturers, a best mix of global sourcing for the construction of power plants, chemical factories and other types of plants overseas, as well as to coordinate various other functions from financing and construction to operations management and maintenance services. Independent power producers (IPP) exemplify this type of business which draws on the comprehensive capabilities of the SHOSHA.

Transport Machinery

The transport machinery business of SHOSHA spans the land, sea, and air sectors such as automobiles, railway systems, ships, and aircraft, In the area of automobiles, for example, the SHOSHA have built dealer networks for Japanese-made models around the world, set up offshore assembly plants, and engaged in component supply and supply chain management (SCM) along with the offshore migration of production by Japanese automakers. As for aircraft area, the SHOSHA not only sell planes to domestic airlines but also sell used planes to third parties and furnish financing and operating leases.

IT and Content

The SHOSHA are engaged in a broad areas in this field — everything from satellite launches and network construction of IC (Information Communications) to terminal sales of mobile telephones. In recent years, their activities are no longer confined to the handling of hardware; they have been participating in the development of applications, invention of e-business models resting on e-commerce, production of contents (e.g., cinema and animation) and its sales promotion worldwide, investment in and operation of broadcasting business (e.g., satellite broadcasting and CATV), and incubation of all sorts of information technology (IT) business.

Profile of Business Fields

Construction and Real Estate Development

In this field, the activities of SHOSHA encompass total regional development, construction, sale, and management of condominiums, detached houses, and other housing in other countries as well as in Japan, leasing and distribution, and the development and sales of industrial estates abroad. In addition, they are vigorously pursuing business in real estate funds making efficient use of the know-how of financial technology accumulated through their conventional trading activities.

Profile of Business Fields

Energy

A stable supply of energy resources is a vital task for Japan, which has few of its own. The SHOSHA are active on this front as well. They are involved in the development and import of crude oil, liquefied petroleum gas (LPG), and liquefied natural gas (LNG) in the upstream sector, oil refining and trading of crude oil and petroleum products in the midstream sector, and the management of LPG sales stores and filling stations in the downstream sector. In recent years, they have also started to step up their business in power distribution and environment-related business along with the development of new energy as a result of the deregulation of the power sector.

Profile of Business Fields

Chemicals

The SHOSHA handle variety of products in this field. The list includes petrochemicals, inorganic chemicals (sulfur, salt, etc.), precision chemicals (e.g., catalysts and fatty acids), electronic materials, agricultural chemicals, pharmaceuticals, and biochemicals. In the area of petrochemicals, they are investing in joint ventures in other countries in search of higher cost competitiveness, and are engaged in the production of ethylene, naphtha, polyvinyl chloride, ammonia, and methanol. They also distribute and sell the resulting products. In the area of general-purpose chemicals, they are aiming for the optimal supply adapted to customer needs while also making active approaches to the development of applications for high-performance chemicals.

Textiles

Textile Division of SHOSHA is handling not only apparel but also various other categories, including interior and lifestyle products, bedroom linens and industrial textile materials. In addition to the traditional business in import of cotton, wool, and other raw materials as well as distribution of yarn, woven goods, and other products, the SHOSHA take part in creating brand and import, store development and management of stores they operate directly, and provision of apparel production and logistics (SCM, etc.) capabilities through use of plants in Japan and abroad. They also are collaborating with textile manufacturers in the development and sale of new materials.

General Merchandise

The commodities that the SHOSHA handle include, everything from lumber, construction materials, paper, pulp, and chips to hides and all sorts of consumer goods. In connection with supply of lumber and pulp, they are actively promoting afforestation projects in all parts of the world and making efforts to curtail environmental burden to the minimum. In the area of consumer goods, they aspire to enrich people's lives by furnishing a diversity of high value-added products. They deal in everything from skis, bowling balls and other types of sporting gear to brand-name goods, ceramics, tires, rubber goods and electrical household appliances.

Profile of Business Fields

Foodstuff and Food Products

Japan has a low rate of food supply self-sufficiency, and the SHOSHA have enabled the Japanese people to enjoy a full dietary life by importing foodstuffs from other countries. They procure and supply the optimal items for consumer wants and needs in all areas, from materials such as grains, raw sugar, marine products, livestock products, and beverage ingredients to processed foods such as alcoholic beverages, canned foods, and dairy products. To assure supply stability and food safety, they are also making direct investment both upstream and downstream in grain elevators, livestock farms, food processing operations, and in food wholesaling and retailing.

Finance

SHOSHA kinyu (trade firm finance) traditionally refers to credit support between and among businesses. Furthermore, many people may imagine foreign exchange dealing and project finance when thinking of the financial services provided by the SHOSHA. However, in today's world where highly advanced financial technology (FT) is used, the services provided have expanded into a wide range of areas including the handling of various derivatives, the establishment and sales of funds and M&A, as well as asset liquidation, leasing, securities, investment advisory and insurance-related businesses among others.

Profile of Business Fields

Logistics

Logistics services are the keystone of SHOSHA. They have established a combined multimodal transportation system by developing logistics bases and systems in order to provide the best and fastest logistics service. The SHOSHA also operate logistics centers and manage vessels designated for this purpose. In recent years the SHOSHA have started providing such high quality services as 3PL, which supports the distribution needs of business partners and third parties and consulting on improving distribution through supply chain management (SCM ) by taking full advantage of the know- how accumulated from past business experience.

The roles and functions of SHOSHA vary according to the type of product handled.

Some of the roles and functions include supporting the complex domestic distribution system of the steel industry, exploring for natural resources overseas, exporting large scale plants, introducing unique foreign products and technologies into the Japanese market and endeavoring to ensure a stable supply of food and energy resources to Japan.

The list is extremely diverse and goes on and on. However, when looked at carefully, the similarities in the SHOSHA's established business areas could be described as follows:

  • The SHOSHA have a history of pioneering and developing various business fields with other companies as partners.
  • The overwhelming proportion of SHOSHA activities is accompanied by specific logistics services for specific products using a variety of logistics functions, led by SCM, connected to the simple flow of products.
  • The SHOSHA's activities always thrived on global activities beyond national borders.

Traditional business fields are the basic revenue sources of SHOSHA, but it is a world in which scrap and build tactics are constantly practiced to cope with and survive the ever-changing industrial structure as well as the intense competition between businesses.