The Roles and Contribution of Sogo-Shosha in Developing Countries

1. The Roles and Contribution of Sogo-Shosha in Developing Countries ~Cases from Mitsubishi Corporation～ December 15, 2012 Mitsubishi Corporation Senior Vice President Tomohiko Fujiyama

2. INDEX About Sogo-Shosha（Mitsubishi Corporation) Sogo-Shosha’s Function Creation and Expansion of Value Chains in Developing Countries CSR and Compliance ODA Activities Concluding Message Proprietary & confidential

3. About Sogo-Shosha（Mitsubishi Corporation) Proprietary & confidential

4. Sogo-Shosha & Mitsubishi Corporation • Sogo-Shosha; General Trading Company • Mitsubishi Corporation, MITSUI & CO., LTD. , Sumitomo Corporation, ITOCHU Corporation and Marubeni Corporation • Solution Providers with a variety of functions with an extended global network in various industries and businesses. • Mitsubishi Corporation • President & Chief Executive Officer : Ken Kobayashi • Date Established : July 1,1954 （Registered April 1,1950） • Capital :\204,446,667,326 (Approximately US$2.5 billion) • 6 Business Groups(Approximately 10,000 customers around the world) • Over 200 offices around the world • More than 500 subsidiaries and affiliates • Around 60,000 employees on a consolidated basis （Mitsubishi corporation, 5,800 employees） • Operating transactions \20trillion (Approximately US$245 billion) • Consolidated net income¥ 450 billion (approximately US$5.5 billion) (As of FY2011) Proprietary & confidential

5. Nippon Yusen Kabushiki Kaisha Mitsubishi Heavy Industries Mitsubishi Corporation Mitsubishi Materials Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Mitsubishi Estate ・・・ History of the Mitsubishi Companies The Mitsubishi Group 1885 Nippon Yusen Kabushiki Kaisha 1943 MitsubishiHonsha (Holding Company) 1908 The reformation of company organization Mitsubishi Goshi Kaisha Shipbuilding Div. Mitsubishi Shipbuilding Co., Ltd. 1870 1886 Sales Div. 1954 Break up Mitsubishi Mail Steamship Co. Tsukumo Shokai Mitsubishi Company Mitsubishi Trading Co., Ltd. Mining Div. Foundation of marine transportation business Banking Div. Mitsubishi Mining Co., Ltd. Real Estate Div. The expansion of business by undertaking state-run enterprises disposed of by the government The Mitsubishi Bank Co., Ltd. ・・・ Coal Mining Shipbuilding 1946 Mitsubishi Honsha was dissolved and the operating companies were fragmented into small companies according to the dissolution of the ZAIBATSU ordered by the GHQ ・・・・ Copper Mining & Smelting ◆Presidents of Mitsubishi Group◆ 1873 1885 1893 1916 1945 Mitsubishi “Kinyo Kai “ 28 companies ①Yataro Iwasaki ②Yanosuke Iwasaki ③Hisaya Iwasaki ④Koyata Iwasaki Proprietary & confidential

6. Organizational Structure Board of Directors （Members of the Board (12) (as of July 1, 2012)) President Corporate Staff Section • Internal Audit Dept. • Corporate Strategy & Planning Dept. Global Environment & Infrastructure Business Development Group Business Service Group • Corporate Communications Dept. / Corporate Administration Dept. / CSR & Environmental Affairs Dept. / Legal Dept. / Global Human Resources Dept. • Global Strategy & Business Development Dept. • Logistics Management Dept. / Corporate Accounting Dept. / Risk Management Dept. / Finance Dept./ • Structured Finance, M&A Advisory Dept. / Investor • Relations Dept. • Global Environment & Infrastructure Business Development Group CEO Office • Global Environment & Infrastructure Business Development Group Administration Dept. • New Energy & Power Generation Div. • Environmental & Infrastructure Business Div. • Business Service Group CEO office • IT Service Business Div. • Information Systems Development Dept. • Corporate Systems Development Dept. Industrial Finance, Logistics & Development Group Energy Business Group Metals Group Machinery Group Chemicals Group Living Essentials Group • Industrial Finance, Logistics • & Development Group • CEO Office • Industrial Finance, Logistics • & Development Group • Administration Dept. • Real Estate Investment & • Management Unit • Asset Finance & Business • Development Div. • Real Estate Development • & Construction Div. • Logistics Div. • Energy Business Group • CEO Office • Energy Business Group • Administration Dept. • Africa, Europe and • America E&P Business • Unit • Asia E&P Business Unit • E&P New Business • Development Unit • Natural Gas Business Div. • A • Natural Gas Business Div. • B • Petroleum Business Div. • Carbon & LPG Business • Div. • Metals Group CEO • Office • Metals Group • Administration Dept. • Steel Business Div. • Ferrous Raw Materials • Div. • Non-Ferrous Metals • Div. • Machinery Group CEO • Office • Machinery Group • Administration Dept. • Plant & Engineering • Business Div. • Industrial Machinery • Business Div. • Ship & Aerospace Div. • Motor Vehicle Business • Div. • Isuzu Business Div. • Chemicals Group CEO • Office • Chemicals Group • Administration Dept. • Phoenix Unit • Saudi Petrochemical • Project Unit • Commodity • Chemicals Div. A • Commodity • Chemicals Div. B • Functional Chemicals • Div. • Life Sciences Div. • Living Essentials Group • CEO Office • Living Essentials Group • Administration Dept. • Living Essentials Group • Information System Office • Global Consumer • Business Development • Unit • Retail & Healthcare Div. • Foods (Commodity) Div. • Foods (Products) Div. • Textiles Div. • General Merchandise Div. Proprietary & confidential

7. Global Network MC has more than 200 Offices & Subsidiaries, as well as over 500 group companies in approximately 90 countries around the world. Proprietary & confidential

8. Comparison of MC’s Business Models to Others Consulting Firms Selling knowledge and know-how piece by piece ( short-term ) Apply specialized functions and services Directly assess the specific needs of customers Charge a one-time only consulting fee Undertake no risk Obtain Profits Investment Funds Using knowledge and know-how to recoup ROI ( short-to-medium term ) Apply specialized services to evaluate the value of a business or company (some also offer hands-on support) Undertake short-term investment risk without getting involved in the business operations Identify projects that fit their investment criteria Sell off shares in the companies once they have raised these companies’ corporate value Obtain Profits MC(Sogo-Shoshas) Creating “new businesses” by applying knowledge and know-how (long-term) Undertake risk through long-term commitment to businesses Put various, integrated functions and services to use Get involved in product transactions, receive dividends, etc. Identify latent needs of customers and industries Cyclical approach, applying “knowledge based on all aspects of a long-term flow of products and services” Obtain Profits Sogo-Shoshas gain new business as payoff for their success in consulting and risk-taking. Proprietary & confidential

9. 2.Sogo-Shosha’s Function Proprietary & confidential

10. J/V tank marine transport storage consulting Changes in Social and Economic Environment around Sogo-Shosha 2000s 1950s 1960s 1970s 1980s 1990s Criticism ofSogo-Shoshafor buying-up “The WinterYears” ofSogo-Shosha “Middlemenwill die” Sogo-Shoshaon the decline Transaction Constructing Stronger Value Chain supply chainmanagement high-tech goods,technique andservice heavy & chemical industry products traditional products of light industry Utilizing these functions counter trade Finance debt guarantee project finance trade finance securitization/asset finance lease Investment factoryconstruction PE investment / incubation resource development Ｍ＆Ａ Global Business Enterprise Logistics processing &distributing center intermodaltransportation large specialvessel Information country risk overseasinformation businessinformation technologyinformation planning Proprietary & confidential

11. MC’s Business Models (Value Chains) Reaping profits by optimizing* “every link in every value chain” via “mutually beneficial partnerships” * Making the most economical choices at each stage of business, reducing the environmental burden, and taking full advantage of corporate and human resources within each value chain, all the while ensuring the highest level of satisfaction amongst end users and customers. Partner (Company A) Partner (Company B) Trading Raw Materials Developing Resources Manufacturing & Processing Intermediary Distribution Retail Eliminating Bottlenecks Business Investment (Company C) Eliminating Bottlenecks Logistics Finance Business Investment (Company D) Consulting Providing Market Needs JIT Inventory Control Examples of functions and services provided by MC Ideal Value Chain Hypothesis (Based on this hypothesis, bottlenecks are first defined and optimum partners selected to eliminate these bottlenecks, then solutions provided) MC Group Specialized Knowledge & Know-How (Products & Industries × Regions × Functions & Services) Proprietary & confidential

12. 3. Development of Value Chains in Developing Countries

13. Overview of our Business Offices in Thailand MC Metal One Thailand TIS Thai-MC • Mitsubishi Corporation has two entities in Thailand as locally incorporated companies, Mitsubishi Company (Thailand) Ltd. and Thai-MC Company Limited with about 240 employees. • Mitsubishi Corporation invests in around100 companies in Thailand with roughly 12,000 employees. About 70 Japanese expatriates are seconded to 42 major affiliated companies. • Mitsubishi Company (Thailand) Ltd. • Capital: 250 million THB (625 million JPY) • Shareholder: Mitsubishi Corp. 100% Consolidated Management Metal One Isuzu Manufacture Manufacture Manufacture • Thai-MC Company Limited • Capital: 800 million THB (2 billion JPY) • Shareholders: Mitsubishi Company (Thailand) Ltd. 25% • Mitsubishi Corporation 24%24％ • Thai domestic partners51% MC Thailand Examples of Main Investees ： Tri Petch Isuzu Sales （Vehicle sales）, Metal One (Thailand)　（Steel Import）, AMSCO（Starch Manufacturing and Sales）, M-TIS （Maltitol Manufacturing and Sales）, DMC（Food Whole Sales）, MC Logi Thailand（Logistics）, MSAT（Steel Trading, Coil Center）, DMET（Steel Fabrication）　 Thai Partners Japanese Company Thai Company Proprietary & confidential

14. Foreign Business Act in Thailand • Foreign Business Regulations were announced in 1973 and Foreign Business Act was enacted in 1999. • Foreign Business Act defines activities of foreign companies in three categories in the framework of national development. • Companies with 50% or more foreign investment are considered “Foreign Companies”. 1st Category: Businesses with special domestic concernse.g.Agriculture, Fishery, Real Estate etc. 2nd Category: Businesses relating to national security, traditional and folk art, natural resources and environmente.g. Production of weapons, Transportation etc. 3rd Category: Businesses in which domestic companies are not yet competitive.e.g. Rice milling, Construction, Service Industries etc. JETRO Web Site, December 2012 : http://www.jetro.go.jp/world/asia/th/invest_02/ ASEAN-Japan Centre Web Site, December 2012: http://www.asean.or.jp/ja/asean/know/country/thailand/invest/guide/appendix08.html Proprietary & confidential

15. Background of Restrictions on Foreign Companies • Growing nationalism in Thailand in 1970’s. • Protection of domestic industries from foreign competitionForeign InvestmentvsDomestic Industrial Protection • Foreign Business Regulations in 1973Companies with 50% or more domestic investment are domestic companies • Foreign Investors can provide necessary resources to the domestic companies 51% 49% 49% 51% • Gradually transfer the business to domestic companies 51% x 51% = 26% of Domestic Investment Proprietary & confidential

16. Business Development of Mitsubishi Corporation in Thailand • Mitsubishi Corporation invests in companies in Thailand through Thai MC together with Thai domestic partners. • Affiliated companies of MC in Thailand become Thai domestic companies • Japanese manufactures also invest in companies in Thailand on their own • Create new Employment and achieve Technical Transfer • Mutual development of Japanese and Thai domestic companies • ex) Vehicle Business with Isuzu Motors Proprietary & confidential

17. MC’s Automobile Business Value Chain in Thailand Machinery Group Upstream (Raw materials) Trading Downstream(Products) Finance Investment Automobile Value Chain Manufacturer Sales Company Dealer Consumer Manufacturing &Assembly(Isuzu Motors) Domestic sales Export sales Domestic dealer in Thailand Thailand Trading Investment Logistics Maintenance & service Investment Investment Trading Auto Finance Investment Finance Procurement: ・Steel plates ・Auto parts (Manufacturer, supplier Investment 93 countries Trading Proprietary & confidential

18. Unit Sales of Isuzu Vehicles in Thailand and for Export Phase Ⅰ Import～Assembly Phase Ⅱ Domestic production policy &Expansion of supporting businesses Phase ⅢProduction hub &Export from Thailand Thousands Units Proprietary & confidential

19. Challenge for the future development of value chains • Need to expand value chains to other countries • Decentralization from the current management system intensively governed by headquarters and Japanese staff • Globalization of human resources, and greater utilization of National Staff talents Proprietary & confidential

20. 4. CSR and Compliance Proprietary & confidential

21. MC’s Corporate Philosophy – “Three Corporate Principles” Corporate Responsibility to Society（所期奉公, “Shoki Hoko”） Strive to enrich society, both materially and spiritually, while contributing towards the preservation of the global environment. Integrity & Fairness （処事光明, “Shoji Komei”） Maintain principles of transparency and openness, conducting business with integrity and fairness. Global Understanding through Business （立業貿易, “Ritsugyo Boeki”） Expand business, based on an all-compassing global perspective. Proprietary & confidential

22. To Create Sustainable Corporate Value Mitsubishi Corporation views efforts in regards to CSR and environmental affairs as one of its most important management issues. Therefore Mitsubishi corporation is engaged in promoting a range of initiatives aimed at realizing a sustainable society. Screening Process for Loan and Investment Proposals • As a part of Mitsubishi Corporation’s strategic decision-making process, loan and investment proposals are examined by Executive Committee. • Screening and review process is takes into account not only financial and legal risks but also environmental, social, and governance factors. Proprietary & confidential

23. Policy for Sustainable Supply Chain Management Mitsubishi Corporation Policy for Sustainable Supply Chain Management Mitsubishi Corporation strives to ensure that business is conducted responsibly throughout its supply chains. In order to convey this stance to suppliers, the company has established the “Mitsubishi Corporation Policy for Sustainable Supply Chain Management,” which it expects all suppliers to understand, embrace and abide by. • Forced Labor : Suppliers shall employ all employees of their own free will with no employee being subject to forced or bonded • labor. • (2) Child Labor : Suppliers shall not employee people under the minimum legal working age of the country in question. • (3) Safe and healthy Working Environments : Suppliers shall work to provide employees with safe and healthy working • environments. • (4) Freedom of Association : Suppliers shall respect the right of employees to associate freely and for these groups to negotiate • working environments, wages and other matters with employers. • (5) Discrimination : Suppliers shall strive to ensure equal opportunities in the work place and shall not engage in discrimination • with regard to recruitment and employment practices. • (6) Abuse and Harassment :Suppliers shall respect employees' human rights and must not tolerate abuse or any form of • harassment. • (7) Working Hours :Suppliers shall ensure that employees' working hours and use of leave entitlements are appropriately • monitored so as not to infringe upon any statutory regulations. • (8) Suitable Remuneration :Suppliers shall pay employees at least the statutory minimum wage and shall not unreasonably • reduce wages. • (9) Anti-corruption:Suppliers shall engage in fair business practices, avoid corruption including bribery and extortion, • and comply with applicable laws and regulations. • (10) Environment : Suppliers should work to protect the environment and will consider the environmental impact of • their business activities on local communities and ecosystems. • (11) Information Disclosure : Suppliers shall disclose information with respect to the aforementioned matters in a • timely and appropriate manner. Proprietary & confidential

24. Monitoring Sustainable Supply Chain Management • 【Monitoring】 • In order to ensure that suppliers operate in accordance with the Policy for Sustainable Supply Chain Management, Mitsubishi Corporation requires suppliers to complete self-assessment questionnaires. In addition, the company conducts onsite evaluation of suppliers. • 【Non-Compliances and Corrective Actions】 • Where Mitsubishi Corporation identifies cases of non-compliance with the Policy, it communicates its remediation requirements to partners and provides support for redressing specific issues. MC reserves the right to disengage with partners who do not take appropriate measures to remedy non-compliance. Proprietary & confidential

25. For “Sustainable Societal Value” “Sustainable Environmental Value”（CSR） Example of Monitoring Sustainable Supply Chain Management in Vietnam • Monitoring Saigon 3 Garment Joint Stock Company (SG3) • In September 2010, staff from Mitsubishi Corporation conducted a site visit of SG3, a major Vietnamese apparel manufacturer and one of our suppliers. • As part of this process, a series of interviews were conducted with SG3's Corporate Social Responsibility Manager, while an inspection of the company's factory production site was also undertaken. • No issues were identified • The factory's operations produce very few CO2 emissions. • It is SG3's policy not to employ any workers under the age of 18, and it was confirmed that adequate measures and checks are in place to verify the ages of all new recruits. • With regards to health and safety, numerous notices and bulletins are posted around the factory to remind employees of necessary precautions and procedures. • Appropriate protective equipment such as masks and gloves was also seen to be utilized. • In addition to this monitoring conducted by Mitsubishi Corporation, SG3 also undergoes regular auditing with regard to environmental and social issues. Proprietary & confidential

26. 5.ODA Activities Proprietary & confidential

27. Roles of ODA Contribute to the peace and development of the international community, and thereby to help ensure Japan’s own security and prosperity 《ODA Charter 2003》 ODA projects can be good opportunities for private companiesto penetrate into markets of developing countries Proprietary & confidential

28. History of Japanese ODA Japan used to be a recipient country of ODA after World WarⅡ. From 1946 to 1951, Japan borrowed 5 billion USD from the World Bank etc. for infrastructure such as Tokaido Bullet Train, Tomei Highway, Kurobe Dam.） 2011FY Amount of Bilateral Cooperation 1954 Started payment of war reparations to Asian countries Total 1,335 billionyen (16.3 billion USD) Yen Credit 1,062 billion yen (13.0 billion USD) Grant Aid 152 billion yen (1.9 billion USD) Technical Cooperation 122 billion yen (1.5 billion USD) ※International comparison includes amount of contributions to US etc. as well. The above amounts include bilateral cooperation only. 1958 Started providing loan assistance（Yen Credit） 1969 Started providing Grant Aid 1989 Japan became the Top Donor in the world 2011 Japan ranks 5th for providing ODA Proprietary & confidential

29. Functions of Sogo-Shosha for ODA Our Function Project Coordinator & Promoter • Confirm needs of Recipient Governments, Assistance Policy of Japanese Government, and Technical Competitiveness of Japanese Suppliers and Contractors • Propose appropriate projects as Japanese ODA • Project management of actual projects, coordinating manufacturers, general contractors etc. and providing logistics services. Proprietary & confidential

30. The reasons why MC works on ODA in Corporate Group Recent Trend • Struggle to keep the quality in severe competition • Other Sogo-Shosha are not as active in ODA as before • Necessity of great care for Compliance Issues Mitsubishi Corporation continues ODA Grant Aid apart from business departments Proprietary & confidential

31. ODAGrant Aid Policy of Mitsubishi Corporation • Grant ODA to be promoted by International Economic Cooperation Office, under MC regional strategy as one important tool to explore new markets in developing countries • Profit is not prioritized in promoting Grant ODA <Indonesia>Port and Airport Security Equipment <Kenya> African Institute for Capacity Development <Afghanistan> TV Broadcasting Facility Proprietary & confidential

32. Public Private Partnership promoted by JICA In April 2008, the Government of Japan announced “Public-Private Cooperation for Accelerated Growth” • Preparatory Survey for PPP Infrastructure • Preparatory Survey for BoP business promotion • Private Sector Investment Finance Proprietary & confidential

33. Example of our Activities in Mozambique • Mozal S.A.R.L Aluminum Smelting Project • Mozal Community Development Trust • Hitachi Construction Machinery Business Proprietary & confidential

34. Demining Machines in Mozambique • Japan donated demining machines for Mozambique as ODA. • PPP with Japan, Yamanashi Hitachi Construction Machinery and Mitsubishi Corporation Proprietary & confidential

35. Demining Machines in Mozambique Proprietary & confidential

36. 6. Concluding Message Proprietary & confidential

37. Message • Importance of Partnerships and Inclusive Growth • Japanese Experience can contribute to Developing Countries Proprietary & confidential

38. Thank you for your attention Proprietary & confidential