In 1925, in his inauguration speech at the management meeting following his assumption of office as the fifth Director-General, Kankichi Yukawa stated, “Existing businesses are, of course, important, but Sumitomo should vigorously commit itself to the pursuit of new businesses.” He expressed his own resolve to develop new businesses.
Yukawa’s decision to join Sumitomo was prompted by his experience during a visit to the United States in 1897 as an official of the Ministry of Communications (present-day Ministry of Internal Affairs and Communications), which convinced him of Japan’s pressing need to develop the capability to make steel plate and electric wire. Eyeing the potential of steelmaking, he promoted fostering of a Japanese steelmaker, diversifying Sumitomo’s business interests from copper production centering on mining. In one facet of this initiative, as the manager of Sumitomo Copper Rolling Works (present-day Sumitomo Electric Industries and forerunner of former Sumitomo Metal Industries and former Sumitomo Light Metal Industries), Yukawa focused on the pipe-making business. In 1912 Sumitomo became the first Japanese company to make seamless copper pipe successfully. In 1915 the Sumitomo Steel Foundry (forerunner of Sumitomo Metal Industries) began manufacturing steel products such as hubcaps, wheel axles, gears and bogies for naval and railway use.
In 1927, two years into his tenure as Director-General, Yukawa removed the Besshi Copper Mines—referred to in the Rules Governing the House of Sumitomo as the “eternal asset” for successive generations of Sumitomo—from the direct control of Sumitomo joint-stock company, and repositioned them as an affiliate under the control of Head Office. Yukawa’s decision was in accordance with the second article of the Business Principles of Sumitomo: “Sumitomo’s business interests must always be in harmony with the public interest; Sumitomo shall adapt to good times and bad times…” He succinctly expressed his posture as, “Don’t rest on your laurels but be sensitive to new trends and pioneer new businesses.” Although spinning off the Besshi copper mine business was a radical new departure for Sumitomo, he made it clear the decision was inspired by the philosophy underpinning Besshi, the foundation of Sumitomo.
Grasp the spirit of the era, cultivate new businesses with an enterprising élan, and eliminate and consolidate businesses as necessary. This is the essence of doing business.