We have developed the Sumitomo Electric Group 2030 VISION, which describes our basic attitude toward greater contribution to society, as well as a direction for the growth of the Sumitomo Electric Group in a world facing great transformation.
The Sumitomo Electric Group will pursue its ambition to achieve a “Green Planet” and a “Safer” and more “Comfortable” Society, relentlessly challenging ourselves to use technology for good.
Direction for the Sumitomo Electric Group in an Era of Great Transformation
This year 2022 has been a turning point in my five years as President. Unprecedented headwinds, such as the COVID-19 pandemic since 2019 and the Russian invasion of Ukraine, have impacted our business. To overcome various difficulties, the members of the Sumitomo Electric Group have strived toward its business operations as a whole for these five years. The Group announced the five-year medium-term management plan “VISION 2022” in 2018. The concept is “Contributing to a better society by leveraging our expertise in connectivity and transmission technologies through concerted efforts of the entire Group,” and the strategy to realize the vision is to strive for further growth through enhancement, expansion, and innovation of the five business segments of Automotive, Infocommunications, Electronics, Environment & Energy, and Industrial Materials, aiming to achieve a balanced business portfolio. In FY2021, the total consolidated operating profit of four business segments other than the Automotive segment was a record high, and all businesses grew, nearing the ideal portfolio. In particular, the Environment & Energy segment achieved an all-time high profit with a tailwind of GX*1. We satisfied the requirements of not only customers but also society with our accumulated engineering and sales expertise.
In contemporary society with increasing globalization in all aspects, imminent risks (such as global warming, COVID-19 and other infectious diseases, natural disasters, the Russian invasion of Ukraine, and other geopolitical risks) will directly and significantly affect business operations, and they will accelerate various types of transformation in personal lifestyles and the global society and industries. Because a precise, prompt, and flexible response to the transformation is required, we have formulated the Sumitomo Electric Group 2030 VISION, which provides a broad direction for the Group, to achieve its ideal future “Glorious Excellent Company” for 2030.
Honoring both the Sumitomo Spirit and the Sumitomo Electric Group Corporate Principles
The Sumitomo Electric Group 2030 VISION consists of Management Policy, Society 2030 & Business Domains, Business Direction, and Business Foundations & Targets.
Management Policy stipulates anew that even in an era of great transformation, honoring both the immutable philosophy of the Sumitomo Spirit and the Sumitomo Electric Group Corporate Principles, we manage the Group based on the spirit of “contributing to the public benefit through business” while striving to ensure mutual prosperity with our stakeholders. Based on these basic beliefs, we summarize the important management policies: pursuing top technology, expanding global presence, diversity & inclusion, and sustainability into purpose.
The Sumitomo Electric Group has provided products and services that contribute to a safer and more comfortable society since its founding. Looking ahead to 2030, it is increasingly important to achieve sustainability for our planet. Therefore, we have added green and environmentally friendly society to Society 2030. To realize Society 2030, we will continue to provide an extensive range of products and services for the development of infrastructure and industries. Acknowledging energy, info-communications, and mobility as our three key areas, and including areas where they are fused, we will unleash all of its capabilities to contribute to the ideal society by capturing various customer needs, such as GX*1, DX*2, and CASE*3.
Specifically in the field of Energy, it is important to address a further increase in the adoption of renewable energy, such as solar and wind power, for a carbon-free society. Direct-current transmission grids that allow long-distance power transmission between power generation and consumption sites, rechargeable batteries that balance the electricity supply and demand in response to the intermittency issues of renewable energy sources, and integration and control due to the increase of distributed energy sources, such as solar power, rechargeable batteries, and EVs, will be required. The Sumitomo Electric Group will satisfy these needs through its extensive portfolio of products and services, such as power cables, electrical substation equipment, batteries, and engineering.
In April 2022, the large-scale redox flow battery system, which is used for the interconnection between large-scale wind farms and the power system, started operation together with Hokkaido Electric Power Network, Inc. Since vanadium electrolytes in the batteries can be used semi-permanently, the system is an eco-friendly storage solution. We will actively cultivate the market. In addition, we have superiority in the field of high-voltage direct-current cables, which are being introduced at an accelerating pace in the world against a backdrop of increasing needs, such as further introduction of renewable energy, expansion of wide-area power trading, and improvement of the reliability of power supply. We will focus our efforts on this field, including the expansion of our production capacity.
Contribute to building a better society by pursuing Top Technology and innovation on a global scale, using the integrated capabilities of the Sumitomo Electric Group.
*1 GX: Green transformation, transforming the industrial structure and socio-economy by converting to green energy that does not emit greenhouse gases
*2 DX: Digital transformation, transforming the business process, company culture, or daily life into something better using digital technologies
*3 CASE: Connected, Autonomous, Shared & Services, and Electric, the key trends in the automotive field
Not adhering to the profit-first principle, we have provided products necessary for society. We have not changed our corporate principle, satisfying social needs and contributing to society.
In the field of Communications, development of high-speed large-capacity data communications will drive the expansion of wireless and optical networks. It will also lead to the establishment of more data centers, leading to growing demands for reducing their power consumption. While base stations for 5G are being installed around the world, we have started efforts with an eye toward 6G. The Sumitomo Electric Group will continue to meet the challenge to develop innovative materials and devices, such as gallium nitride devices for base stations achieving low power consumption, large-capacity communications, and wide-area coverage; multi-core optical fibers and ultra-high fiber count cables for large-capacity optical communications; and photonics-electronics convergence wiring for power saving in communications.
In the field of Mobility, it is expected that by 2030, electric vehicles, including hybrid electric vehicles and plug-in hybrid vehicles, will constitute the majority of new vehicle sales, autonomous driving will develop to level 3, where cars actually drive autonomously under certain conditions, and various forms of mobility, such as ultra-compact mobility and flying automobiles, will emerge. In addition, linkage of vehicles with external services will be expanded.
During these changes in the business environment, we will provide new value through the power of our global manufacturing quality, high-level technological engineers, and skilled workers, which enable the production of the same product with the same quality all over the world, with a focus on wiring harnesses as our core business. Additionally, the Sumitomo Electric Group will endeavor to advance electrification and high-speed communications of automobiles, leveraging the integrated technologies of the Group, such as energy and infocommunications. We will create CASE-related new products, such as high-voltage harnesses for EVs and connectors for high-speed communications. With regard to flat magnet wires for motors in vehicles, we have enhanced production capacity to expand the wires to one of our core businesses like the wiring harness business.
We will expand the sales of these three core fields by 1 trillion yen or more and strive to grow the consolidated net sales to 5 trillion yen or more. In addition, we will review the medium-term business plan every three years to promptly and flexibly respond to the uncertain and unprecedented business environment.
We will also engage in a wide range of activities, such as recycling water resources, effective use of rare metals, and reduction of CO2 emissions, to achieve a green society.
Devotion to Sumitomo Electric Group 2030 VISION
Since its founding more than 120 years ago, the Sumitomo Electric Group has built up its core business and achieved steady growth in each of the five segments to contribute to society. We will not adhere to the profit-first principle but uphold the corporate principle that we should provide products necessary for society and contribute to society in 2030. While practicing the Sumitomo Electric Group 2030 VISION, we will find a new pillar of business and create profitable products. We have produced highly evaluated products by improving and refining existing products; however, we will bring entirely new products into the world for business continuity.
The Sumitomo Electric Group has carried out research and development in a wide range of fields, centering on the three R&D centers, including overseas sites. Redox flow batteries mentioned above were invented among them. Other promising businesses include the water treatment business using Poreflon, a special filtration membrane for wastewater purification and recycling. We will satisfy social needs, not only looking into the future from the present but also backcasting or looking back from a carbon neutral society in 2050 to the present.
We have incorporated the determination of the Sumitomo Electric Group to contribute to establishing a better society into the Sumitomo Electric Group 2030 VISION, and to fulfill the vision, the most important thing is the awareness of each employee. It is necessary to understand the corporate principle of the 2030 VISION and its meaning and to get everyone on the same page toward the same goal. I will actively disseminate information to deepen understanding of the Sumitomo Electric Group 2030 VISION in all Group companies and divisions. Each employee’s awareness that we work to create a better society will lead to the road to a Glorious Excellent Company.
Sailing into rough-water transformation
After the global financial crisis in 2008, I was appointed as the President of our German subsidiary, which had entered insolvency, and we revitalized the company in a unified effort for three years. After returning to Japan, I launched a new wiring harness project as the President of Sumitomo Wiring Systems, Ltd., a group company. Based on these experiences and as the President of Sumitomo Electric, I believe that it is truly important to build an effective system to respond to changes and make decisions in limited time. To promptly respond to changes, I am trying to constantly collect accurate information. I receive reports from surrounding members on a daily basis and attentively listen to the information, wondering if it is strictly correct or something has been partially omitted, to increase the accuracy of the information. In addition, I talk with members about the information. I believe that the interaction leads to the right decision to address unforeseen or unexpected situations or rapid changes by top management.
The world will increasingly become more uncertain toward the future. I will meticulously and boldly steer the helm of management in the rough water to enhance our corporate value.