Hidetoshi Nishimura

Chief executive officer and president, Sojitz Holdings Corporation

Nationality: Japanese.

Born: 1942, in Japan.

Education: Kyushu University, BS, 1965.

Career: Nissho Iwai Corporation, 1965–2003, eventually CEO and president of American subsidiary, then president; Nissho Iwai-Nichimen Holdings Corporation, 2003–2004, co-CEO and president; Sojitz Holdings Corporation, 2004–, CEO and president.

Address: Sojitz Holdings Corporation, 1-23 Shiba 4-chome, Minato-ku, Tokyo 108-8408, Japan; http://www.sojitz-holdings.com/eng.

■ Hidetoshi Nishimura joined the trading house Nissho Iwai Corporation after graduating from Kyushu University with a degree in economics in 1965 and eventually worked his way up to the position of president. In April 2003 Nissho Iwai merged with Nichimen Holdings Corporation to form Nissho Iwai-Nichimen Holdings Corporation, of which Nishimura was named president and co-CEO. In 2004 that group was renamed Sojitz Holdings Corporation. Nissho Iwai had traded in ferrous and nonferrous metals, steel, industrial machinery, textiles, lumber, and grain.


In 2000, serving as the president and chief executive officer of Nissho Iwai American Corporation, Nishimura addressed the company in the annual report, outlining his strategy to adapt to quickly changing markets both domestically and abroad. His plan for growth included significant investment in subsidiaries in the company's target markets of new technology, energy, automotive, retail, and finance. With only one-third of his parent company's business being done in Japan and the majority coming from the Americas, Nishimura stressed expansion into global opportunities through Nissho Iwai's network of subsidiaries. He also pushed for more investment in areas outside the company's trading businesses.

In the next two years Nishimura oversaw integration and mergers with numerous companies. Nissho Iwai spun off its information business division to form the company ITX. The LNG business was integrated under a 50-50 joint venture with Sumitomo. In 2002 Nissho Iwai joined Sumitomo Metal Mining Company, Mitsui & Company, and Rio Tuba Nickel Mining Corporation to form a joint-venture company, with construction of a new plant begun in 2004. In January 2003 Nissho Iwai partnered with Xelo, the developer and supplier of document-related software, to promote sales of Xelo's products in the United States through Nissho Iwai American.

With respect to his business style and remoteness from his employees, Nishimura had been chided by business commentators for remarking in the Japan Times , "I want you to challenge difficulties with the attitude of devising methods that would realize goals before you utter reasons why the goals appear impossible to attain" (January 7, 2003).


On April 1, 2003, Nissho Iwai Corporation joined forces with the equally large trading company Nichimen Corporation to form Nissho Iwai-Nichimen Holdings Corporation, a firm wholly owned by both companies. The two companies transferred their respective stocks to the new holding company, which would consolidate management, subsidiaries, and affiliates. The new company would then oversee the subsidiaries and general restructuring, cut debt and jobs, and reduce selling, general, and administrative (SG&A) expenses. Hidetoshi Nishimura, the president of Nissho Iwai, was named president of the new company, while Nichimen's president Toru Hambayashi became chairman. Both men would serve as co-CEOs.

Nishimura and Hambayashi immediately laid out plans for the new holding company. Expecting to save ¥80 billion during the following year, they would cut the number of jobs from 21,000 to 17,000 and reduce the number of subsidiaries from 430 to three hundred. Reduction of SG&A would save ¥110 billion by the end of fiscal 2005 by eliminating overlapping subsidiaries.

Nissho Iwai, the sixth-largest trading house in Japan in terms of sales, and Nichimen, the eighth-largest, amassed combined sales of ¥7.5 trillion in fiscal 2001 and had a combined ¥162.4 trillion in equity capital. Together the two companies also had a high level of interest-bearing debt, topping ¥2.75 trillion. Nevertheless, the two trading houses agreed that they would not ask financial institutions to forgive what they owed.

Critics questioned why two giant, debt-swamped trading houses would join to form a new holding company. During the time of Japan's economic bubble companies made bad investments and stretched their businesses too thin. Then during the country's economic slump companies like Nissho Iwai and Nichimen had difficulty adjusting to deflation, the weak stock market, and the global economic slowdown. They abandoned healthy assets but held on to high-risk assets for fear that losing the latter would damage their equity capital. Nissho Iwai was one of the few companies that successfully streamlined business interests.

Shiroh Sakawaki, the analyst at the Daiwa Institute of Research, questioned the compatibility of the two companies. In Japan Inc. he noted that Nichimen's goal was to select and concentrate, while Nissho Iwai aimed to be a soga shosha , or all-around trading company. He suggested that the alliance would work only if Nissho Iwai came more in line with Nichimen's strategy.


In other ways the merger appeared to be a good fit, as very little duplication of businesses or customers existed. Nishimura commented at a joint press conference in Tokyo that Nichimen, which was strong in textiles and raw materials, and Nissho Iwai, with its airplanes and energy interests, were unlikely to encounter conflict, and that their complementary natures would actually encourage cooperation and result in faster restructuring. At the press conference Nishimura and Hambayashi described the "synergy effects" that their integration plans would bring. Industry observers believed that the Nissho Iwai-Nichimen merger would be an example for other trading houses struggling during Japan's economic doldrums.

In a series of steps taken to increase capital Nissho Iwai-Nichimen planned to add up to ¥325 billion. The company floated a combined ¥278 billion in preferred shares to UFJ Bank, Mizuho Bank, and other investors. The merger also attracted the U.S. investment bank Lehman Brothers Holdings; Lehman's offer of ¥50 billion was the first investment of its kind for a foreign bank in Japan. The influx of capital was intended to cover expenses from the trading house's large-scale restructuring program.

Nissho Iwa-Nichimen also sold a combined ¥7 billion in common shares to two hundred individual investors, including Nishimura himself, after its instatement. Kyodo News reported that Nishimura said of his decision to make the purchase, "I have volunteered to subscribe to the common shares and there is no legal obstacle to my subscription" (April 25, 2003).


Six months after the merger of Nissho Iwai and Nichimen, Nishimura described the integration operations as smooth. In a September 6, 2003, interview with Kyodo News , Nishimura said that the company was "working well as a medium to fuse" the two firms. The goal of cutting the workforce by 6,200 by the end of fiscal 2005 was on track. Pay cuts of 20 percent for remaining employees were "painful measures," according to Nishimura, but were "paving the way for shifting the seniority-based system to a merit-based system" (September 6, 2003); he explained that Nissho Iwai-Nichimen would introduce a new pay system that would link pay and bonuses to workers' performances. Nishimura further described plans to combine operating subsidiaries into one company under the Nissho Iwai-Nichimen name. With that restructuring Nishimura expected to change the name of the holding company, which he believed to be "too long."


In an effort to cut costs and speed up decision making, Nissho Iwai-Nichimen Holdings integrated their central operations into a new entity called Sojitz Corporation. The holding company controlled Sojitz so that it could respond flexibly to economic and business changes and streamline its business lines. Nissho Iwai-Nichimen Holdings was then renamed Sojitz Holdings Corporation effective July 2004. Nishimura remained the corporation's CEO and president.

In a 2004 letter to Nissho Iwai-Nichimen shareholders, Nishimura and Hambayashi announced that the holding company was continuing progress with its integration and its three-year business plan. The creation of Sojitz allowed the initiation of a process of "selection and focus" intended to improve profitability. The company expected to enhance its competitiveness by establishing a multifaceted business structure.

As a sign that the company's debt restructuring and management consolidation were on the right track, Moody's Investors Service placed the B1 long-term debt ratings of Nichimen and Nissho Iwai under review for possible upgrade. Standard & Poor's reduced its long-term rating on Nichimen from B-plus to B but raised its long-term rating on Nissho Iwai to B-pi from B-minus-pi.


In addition to his 40-year career at Nissho Iwai, Nishimura served as the vice chairman of Japan Foreign Trade Council, a private-sector organization that developed international relations through trade. Nishimura was one of 58 business executives around the world to undersign a letter condemning the environmental impact of a coal-fired power plant being built in the Philippines and urging the insurance companies involved to more carefully review the standards and practices of the project.

In 1994 Nishimura, representing the Japan Overseas Development Corporation, advocated investment in infrastructure in the Greater Mekong subregion of Myanmar and Vietnam. He said in the BKK Post , "Without infrastructure, it is impossible to do business. But the important point is who should pay. It should be the government which pays for this out of tax revenue" (November 25, 1994). He went on to suggest that trade and investment insurance be made available in the region.

Nishimura traveled to spread economic good will. In March 2004 he met the prime minister of the Union of Myanmar, General Khin Nyunt. Later that year he met Kraisri Chatikavanij, the chairman and executive chairman of Thai Central Chemical Public Company (TCCC). Nyunt thanked Nishimura for Nissho Iwai's continued support, and Nishimura expressed his appreciation for TCCC's recent successes.

See also entry on Nissho Iwai K.K. in International Directory of Company Histories .

sources for further information

"Japanese Trading Powerhouse to Pad Capital Base by up to 325 Billion Yen," Kyodo News International , April 25, 2003.

Kawakami, Sumie, "Goodbye to the Glory Days," Japan Inc. , February 2003, pp. 8–10.

Kothandapani, Dharani, "Private Sector Seen as Major Player in Mekong Project," BKK Post , November 25, 1994.

"Nissho Iwai, Nichimen to Form Holding Company," Mainichi Daily News , December 11, 2002.

"Nissho Iwai, Nichimen Trading Units Set to Merge," Japan Times , February 11, 2004.

"Tokyo Holding Company Makes Good Start, President Says," Kyodo News International , September 6, 2003.

—Lorraine Savage

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