“The House of Sumitomo’s policy emphasizes the need for the most careful consideration when contemplating embarking on a new business. Nevertheless, I urge you to be energetic in proposing improvements to existing businesses and in identifying sound and beneficial new businesses.”

# Sumitomo’s Business Philosophy

# Director-General

(Left) Sumitomo’s Business Rules were issued in 1928, The reference to the Besshi Copper Mines was removed from the Business Principles (right). This text has remained part of the business philosophy of Sumitomo Group companies to this day.

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.

Kankichi Yukawa (1868-1931): Kankichi Yukawa was born in 1868 as the eldest son of Kansai Yukawa, a retainer doctor of Kishu Shingu Domain (present-day Shingu City, Wakayama Prefecture), and his wife Yae in Shingu-machi (present-day Chiho 1-chome, Shingu City). He graduated from Tokyo Imperial University in 1890 and joined the Ministry of Communications. Upon joining Sumitomo in 1905 on the recommendation of Masaya Suzuki who was Yukawa’s senior at university, he was appointed manager of the Head Office to assist Director-General Suzuki. In 1910 Yukawa was promoted to director and was positioned No. 3, following Suzuki and Nakada. That year he also became manager of Sumitomo Copper Rolling Works. He became director of Sumitomo Steel Foundry in 1915 and director and chairman in 1925. During his term of office as the fifth Director-General of Sumitomo, he reached 60, the retirement age, in 1928, but his term of office was extended for three years so that he could serve as a guardian of Tomonari, the 16th family head, who was still young. Noting Tomonari’s personal development, Yukawa resigned in 1930 before the expiration of the extended term of office.