MIRA INFORM REPORT

 

 

Report No. :

334395

Report Date :

31.07.2015

 

IDENTIFICATION DETAILS

 

Name :

SOJITZ CORPORATION

 

 

Registered Office :

2-1-1 Uchisaiwaicho Chiyodaku Tokyo 100-8691

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014 (consolidated)

 

 

Date of Incorporation :

December, 1982

 

 

Com. Reg. No.:

(Tokyo-Minatoku) 049977

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)     

 

 

Line of Business :

Subject is a general trading house:

 

Subject operates through following divisions :-

 

Machinery Division

Automotive Unit, Environment & Infrastructure Unit, IT Business Unit, Marine & Aerospace Unit

 

Energy & Metals Division

Energy & Nuclear Unit, Coal & Non-ferrous Metals Unit, Ferrous Metals & Steel Products Unit

 

Chemicals & Functional Materials Division

Chemicals Unit & Functional Materials Unit

 

Lifestyle Business Division

Foods Resources Unit, General Commodities & Textile Unit, Forest Products & Real Estate Development Unit

 

 

No. of Employees

15,915

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Good

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

Japan - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

Company name

 

SOJITZ CORPORATION

 

 

REGD NAME

 

Sojitz KK

 

 

MAIN OFFICE

 

2-1-1 Uchisaiwaicho Chiyodaku Tokyo 100-8691 JAPAN

Tel: 03-6871-5000     Fax: 03-6871-2430

 

URL:                             http://www.sojitz.com/

E-Mail address:                        info@sojitz.com

 

 

ACTIVITIES

 

Subject is a general trading house:

 

Subject operates through following divisions:-

 

Machinery Division

Automotive Unit, Environment & Infrastructure Unit, IT Business Unit, Marine & Aerospace Unit

 

Energy & Metals Division

Energy & Nuclear Unit, Coal & Non-ferrous Metals Unit, Ferrous Metals & Steel Products Unit

 

Chemicals & Functional Materials Division

Chemicals Unit & Functional Materials Unit

 

Lifestyle Business Division

Foods Resources Unit, General Commodities & Textile Unit, Forest Products & Real Estate Development Unit

 

 

BRANCHES

 

7 domestic, 87 overseas

(Subsidiaries/affiliates): 117 domestic, 322 overseas

 

 

CHIEF EXECS

 

YOJI SATO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES                    FAIR                                         A/SALES          Yen 4,056,577 M

PAYMENTS      no complaints                      CAPITAL           Yen 160,339 M

TREND             STEADY                                   WORTH            Yen 459,853 M

STARTED                     2003                                         EMPLOYES      15,915

 

                       

COMMENT

 

GENERAL TRADING HOUSE. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

 

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

4,014,639

45,316

15,981

(%)

346,286

(Consolidated)

31/03/2012

4,494,237

62,228

-3,649

11.95

329,962

31/03/2013

3,934,456

28,052

13,448

-12.46

411,298

31/03/2014

4,046,577

44,033

27,250

2.85

492,959

31/03/2015

4,230,000

55,000

33,000

4.53

..

Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS

 

The subject company was established in Apr 2003 by forming a joint holding company, named Nissho Iwai-Nichimen Holdings Company, by the then Nissho Iwai Co and Nichimen Co, and subsequently in Apr 2004 the two merged into Sojitz Corp as captioned.  The holding company, at the same time, renamed Sojitz Holdings Corporation.  The merger was formed in order to restructure the two firms through supports from financial institutions including the then UFJ Bank (now MUFG), the main bank for the two firms.  On 01/Oct/2005, in order to further streamline the Group’s management framework, Sojitz Holdings merged with its principal operating arm and wholly owned subsidiary, Sojitz Corporation.  The company’s name was then changed to Sojitz Corporation.  This is a general trading house succeeding the business rights & operations of the said two firms, excluding liquidation or separation of unprofitable divisions & operations.  This is the sixth-ranked general trading house.  Major handling items are machinery, energy & resources, which former Nissho Iwai Corp was the stronger, and textiles, which the former Nichimen Corp was stronger.  Highly competitive in fields of aircraft, lumber and urban development.  The company is intensifying Brazil’s cereal crop cargo pickup/export business for Asia.  It is investing Yen 16 billion in local major firm to expand commercial distribution channels.  The number of electricity IPP projects has reached 10 in total, with 3 IPP projects became operational in 2013. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 4,046,577 million, a 2.8% up from Yen 3,934,456 million in the previous term.  Earnings were led by brisk automobile sales in Russia and stronger demand for chemicals and fertilizers in Southeast Asia.  The recurring profit was posted at Yen 44,033 million and the net profit at Yen 27,250 million respectively, compared with Yen 28,052 million recurring profit and Yen 13,448 million net profit, respectively, a year ago

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 55,000 million and the net profit at Yen 33,000 million, respectively, on a 4.5% rise in turnover, to Yen 4,230,000 million.  Earnings & operating profits will expand, led by sales growth of automobiles and foodstuff. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

           

Date Registered:           Dec 1982

Regd No.:                                 (Tokyo-Minatoku) 049977

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                   2,500 million shares

Issued:                          1,251,499,501 shares

Sum:                             Yen 160,339 million

           

Major shareholders (%): Japan Trustee Services T (4.5), Master Trust Bank of Japan T (2.8), BBH-Boston GMO Int’l Intrinsic V (1.5), State Street Bank & Trust 505225 (1.3), State Street Bank West Treaty (1.1), Japan Trustee Services T6 (1.1), Japan Trusty Services T5 (1.0), Japan Trustee Services T3 (1.0), Japan Trustee Services T2 (1.0), Japan Trustee Services T1 (1.0); foreign owners (32.7)

 

No. of shareholders: 162,899

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Yutaka Kase, ch; Takashi Hara, v ch; Yoji Sato, pres; Shigeki Dantani, v pres; Shinichi Taniguchi, v pres; Yoshio Mogi, v pres; Satoshi Mizui, s/mgn dir; Tetsuya Konoda, mgn dir; Masahiro Komiyama, mgn dir; Shinichi Teranishi, mgn dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Sojitz Marine & Engineering, Sojitz Building Materials Corp, other (Tot 117 domestic &322 overseas)

 

OPERATION

 

Activities: A general trading house:

 

(Sales breakdown by Divisions):

 

Machinery Division (24%): Automotive Unit, Environment & Infrastructure Unit, IT Business Unit, Marine & Aerospace Unit;

 

Energy & Metals Division (19%): Energy & Nuclear Unit, Coal & Non-ferrous Metals Unit, Ferrous Metals & Steel Products Unit;

 

Chemicals & Functional Materials Division (16%): Chemicals Unit, Functional Materials Unit;

 

Lifestyle Business Division (38%): Foods Resources Unit, General Commodities & Textile Unit, Forest Products & Real Estate Development Unit;

 

Others (2%)

 

Overseas trading (35%)

 

Clients: [Mfrs, wholesalers] Kobe Steel, NM Life, First Retailing, Uto Kosan, Zao Severstal, Varig S.A., Auto-Isuzu PT Indofood Sukses Makmur TBK, MMC Automotriz SA, other

No. of accounts: 2,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Hitachi Zosen, Hitachi Ltd, Toyo Rubber, Yamazaki

Nabisco, Sun Building Materials Corp, Sumitomo Metal Mining, Fuji Electric Systems,

Sojitz Asia, other.

 

Payment record: No Complaints

 

Location: Business area in Tokyo.  Office premises at the caption address are leased and maintained satisfactorily.

 

Bank References:

MUFG (Tokyo)

Mizuho Bank (H/O)

Relations: Satisfactory

 

 

FINANCIALS

 

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

  Annual Sales

　

4,046,577

3,934,456

  Cost of Sales

3,848,356

3,747,211

      GROSS PROFIT

198,221

187,245

  Selling & Adm Costs

174,527

161,752

      OPERATING PROFIT

23,694

25,493

  Non-Operating P/L

20,339

2,559

      RECURRING PROFIT

44,033

28,052

　

      NET PROFIT

27,250

13,448

BALANCE SHEET

  Cash

　

120,658

424,371

  Receivables

524,826

508,690

  Inventory

301,979

297,389

  Securities, Marketable

　

　

  Other Current Assets

374,361

60,728

      TOTAL CURRENT ASSETS

1,321,824

1,291,178

  Property & Equipment

213,934

231,840

  Intangibles

107,222

108,932

  Investments, Other Fixed Assets

577,256

518,100

      TOTAL ASSETS

2,220,236

2,150,050

  Payables

514,585

515,989

  Short-Term Bank Loans

227,216

258,375

　

　

　

  Other Current Liabs

70,049

74,562

      TOTAL CURRENT LIABS

811,850

848,926

  Debentures

　

　

  Long-Term Bank Loans

838,060

818,632

  Reserve for Retirement Allw

16,917

16,158

  Other Debts

　

60,450

55,035

      TOTAL LIABILITIES

1,727,277

1,738,751

      MINORITY INTERESTS

Common stock

160,339

160,339

Additional paid-in capital

10,463

9,816

Retained earnings

33,538

13,053

Evaluation p/l on investments/securities

　

　

Others

288,776

228,238

Treasury stock, at cost

(157)

(148)

      TOTAL S/HOLDERS` EQUITY

492,959

411,298

　

      TOTAL EQUITIES

2,220,236

2,150,050

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2014

31/03/2013

Cash Flows from Operating Activities

　

46,997

55,124

Cash Flows from Investment Activities

-24,469

-11,652

Cash Flows from Financing Activities

-30,931

-56,177

　

Cash, Bank Deposits at the Term End

　

620,658

424,371

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

Net Worth (S/Holders' Equity)

492,959

411,298

Current Ratio (%)

162.82

152.10

Net Worth Ratio (%)

22.20

19.13

Recurring Profit Ratio (%)

1.09

0.71

Net Profit Ratio (%)

0.67

0.34

Return On Equity (%)

5.53

3.27

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.64.01

UK Pound

1

Rs.99.83

Euro

1

Rs.70.07

 

INFORMATION DETAILS

 

Analysis Done by :

VNT

 

 

Report Prepared by :

VNT

 

               

RATING EXPLANATIONS

 

RATING

STATUS

PROPOSED CREDIT LINE

 

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

 

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

 

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

 

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

 

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

 

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

 

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

Credit not recommended

 

--

NB

New Business

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.