Sojitz Plans 90 Billion Yen Investment for Energy, Metals in 3-Year

Sojitz Corporation’s energy and metal unit plans around 90 billion yen of investment in 3-year through fiscal 2014 ending March 2015. The unit secured around half of the trading firm’s budget for new investment for 3-year plan allocating mainly for Australian iron ore development and coal equity expansion. The unit keeps the total assets with sales of some assets when the firm tries to improve profitability by improving the assets portfolio without asset increase. The unit builds profit base through investment and wider trading for emerging counties preparing for next growth.

Energy & Metal division president Masahiro Komiyama said the unit develops Southdown iron ore mine in Australia with total 250 billion yen of investment while the unit plans 3-4 of new coal investments and expansion of existing mines. He said the unit focuses other investment into liquid natural gas and other limited items including nonferrous metals and ferroalloys.

Mr. Komiyama said the unit seeks investment items to contribute to the trading activity. The unit also seeks further cooperation with Metal One Corporation in the steel products business.

The unit invested around 27 billion yen in fiscal 2011 compared with 65 billion yen in fiscal 2010. The unit acquired interest in Codrilla coal mine in Australia and invested to expansion projects including Canadian molybdenum mine, Canadian copper mine and Australian alumina refinery.

The unit posted 27.3 billion yen of net profit for fiscal 2011, which was 3% higher than fiscal 2010 level. However, without onetime items, the unit’s profit was 25% lower than fiscal 2010 level. The unit expects 20.5 billion yen of net profit in fiscal 2012 due to lower price of resources. The unit targets record 41 billion yen of recurring profit for fiscal 2014, which is 46% higher than fiscal 2011 level, and seeks more profit growth in and after fiscal 2015.