Part of a network of companies that was founded by a samurai centuries ago, Mitsui & Co. now does battle in the marketplace. Mitsui & Co. spearheads the Mitsui Group, one of Japan's largest keiretsu (companies loosely connected through cross-ownership). A leading Japanese general trading firm (sogo shosha), Mitsui & Co. has about 450 subsidiaries in a wide range of industries. Its major business units are engaged in the production and sale of chemicals, electronics and information, energy, foods, iron and steel, nonferrous metals, textiles, and machinery. The company's largest revenue generators are its trading activities in the energy and chemical sectors.
Mitsui & Co.'s strategic role as a sogo shosha brings together marketing, financing, logistics, risk management, and IT and process development functions on behalf of its many subsidiaries.
Mitsui's energy sector, through its MOEX Offshore 2007 subsidiary, will likely see impairment losses on property, equipment, and mineral rights from its involvement with the massive oil rig fire and subsequent oil spill in the Gulf of Mexico during the summer of 2010. Though determining the exact cost of the incident and just who will pay for it may be at issue in the US court system for years, Mitsui expects it may have some liability once the incident is sorted out. The devastating earthquake and tsunami in Japan also hurt Japan's economy and Mitsuis overall performance in 2010.
Beyond that, many of Mitsui's key markets, including North America and Western Europe, were recovering from a recession in 2010, slowing sales of many of its products and services. Mitsui's revenues fell about 20% in 2010 compared to 2009, while its net income remained flat year-to-year.
However, the global recovery, led by higher commodity prices lifted Mitsui's revenues and net income in Fiscal 2011.
Eyeing opportunities in the North American gas market, Mitsui in 2010 announced plans to invest $1.4 billion to develop a shale gas project in Pennsylvania with Anadarko Petroleum. It also teamed up with Penn West Energy Trust to form an $850-million natural-gas joint venture to develop an oil shale play in British Columbia.
Also in 2010 Mitsui teamed up with US fertilizer company Mosaic for a joint venture in a phosphorus ore development project in Peru. Mitsui will spend $275 million to acquire a 25% stake and voting rights in a subsidiary of Vale, while Mosaic will hold a 24% stake. Mitsui is seeking to obtain a steady supply of phosphate, which is used in its fertilizer production operations.
Mitsui entered a 50-50 joint venture with Dow Chemical in 2010 to build and operate a membrane chlor-alkali facility located at Dow's Freeport, Texas, complex. The new facility is expected to begin operations in mid-2013. Mitsui formed yet another joint venture with Dow in 2011, to develop biofuels and biopolymers, or organic plastics, in Brazil. The 50-50 operation will use Dow's sugar cane production to develop ethanol and packaging materials, offering a "green alternative" and replacement product for the flexible packaging, hygiene, and medical markets. Mitsui entered the water infrastructure business in China in 2010 through a 50-50 joint venture with Singapore's Hyflux Ltd., a major provider of integrated water management services. Mitsui plans to do business with local governments and in areas with many industrial complexes by leveraging Hyflux's technological expertise and its own business network.
In 2011 Mitsui agreed to raise its stake in Brazilian grain broker Multigrain SA to almost 90% by buying a 44% stake from US grain company CHS Inc. for $480 million. Mitsui, which hopes to improve its competitiveness on the global grain market, previously owned about half of the company.
Also that year Mitsui entered a joint venture with Russian automaker Sollers to construct Toyota vehicles in a production facility in Vladivostok. The venture would be the first Japanese auto assembly operation in Russia's Far East region. The deal calls for the the Mitsui/Sollers JV to manufacture about 30,000 vehicles a year, and distribute them throughout the Russian Federation via the Trans-Siberian Railway.
Mitsui also agreed acquired Mercian Corporation's pharmaceutical and chemical businesses in 2011. Mercian's drug and chemical businesses, known as MBS Company, utilize fermentation technology and had sales of $95 million in 2010. Mitsui aims to boost its business in substances such as anti-cancer bioagents and will position MBS as part of its core group.