TOYOTA TSUSHO CORP. IN 2014 TTC Corporation Leadership  Hiroshi Chiwa (President, 1990s to 2001) laid the groundwork for TTC’s first two major acquisitions: purchase of Kasho Corp. in 2000 and initial investment in Tomen Corporation that led to subsequent acquisition in 2006.  Masaaki Furukawa (President 2001 to 2005, previously served as Managing Director and Vice President) is often credited with transforming TTC from a cautious export- oriented company primarily serving Motor into a global-centric multi-functional business. In 2001, when Furukawa became President, the Yomiuri Shimbun quoted him as saying " has had a reputation as a company that taps a stone bridge to confirm Background safety but does not cross it. But from now on we will cross the bridge" and, in doing so, "I want Toyota Tsusho Corporation (TTC), founded in the to convert my company from one relying on 1930s to provide financing for Toyota vehicles, is Toyota Motor into one that leads the Toyota now one of the largest trading companies in the Group". Furukawa wanted to build a worldwide world. The company is the trading unit for the distribution network in which TTC’s existing , which includes Toyota Motor core businesses – steel and vehicle trade – grew Corporation and auto parts maker (e.g., air- steadily, while making a leap in three other conditioning) Corporation. As part of its fields: IT, environment, and consumer goods. family relationship, Toyota Tsusho exports Toyota  Junzo Shimizu (President 2005-2011; held vehicles around the world, particularly in emerging executive positions at Toyota Motor and served markets (Toyota Motor handles sales directly in as head of TTC’s Corporate Division) led the larger mature markets). In addition, TTC makes and integration of the Tomen Corporation brokers a wide array of industrial and consumer acquisition in 2006, which substantially goods. TTC is headquartered in (near expanded TTC’s business beyond the auto Toyota Motors) and in . sector, as well as placing initial emphasis on building value chain integration skills within the Major Investors divisions. As he took office, Shimizu said in TTC’s 2005 annual report that he was pleased to Toyota Motor owns 22% of the company and see “fewer employees sitting in offices wearing Toyota Industries owns 11%. Other investors neckties” moving huge amounts of commodities include Master Trust Bank of (5%); Japan by phone; instead, he wanted employees to Trustee Services Bank (4%); Bank of Tokyo- work in field around the world to create new UFJ (2%); Sumitomo Insurance value for in customers’ value chains, including (1%), Aioi Nissay Dowa Insurance (1%), Tokio transportation, engineering, and logistics. He Marine and Nichido Fire Insurance (1%), and viewed globalization of production and value Nippon Life Insurance (1%). chain services as a central driver of growth.  Toyota Motor Corporation (founded in 1933  Jun Karube (President 2011-present; joined and headquartered in Toyota City near Nagoya) TTC in 1976; served as director of Global makes motor vehicles, parts, and accessories in Strategic Integration division in the mid 2000s Japan, North America, Europe, and Asia. and then head of the Machinery and Electronics  Toyota Industries Corporation (founded in 1926 division) has continued to expand TTC’s reach, and headquartered in Kariya, Japan) makes most recently with the acquisition of CFAO in machinery, automobiles (Toyota RAV4) Africa, as well as increasing the emphasis on and engines, and material handling equipment value chain integration. Upon becoming (e.g., forklifts), and offers logistics services in President, Karube created a new “Global Japan and internationally. Originally a Production Parts & Logistics” division as an manufacturer of automatic looms, Toyota outgrowth of the Global Strategic Integration Industries was the genesis of Toyota Motor. unit, to generate external business as well as

1

provide value chain support to the other concluded an agreement to develop the Camberwell divisions. As he came into the leadership coal project in . position in 2011, Karube said that his key priorities for the company were to accelerate 2000s - Expanding value chains, strengthening overseas business development and strengthen earning power, creating new businesses: global alliances, while establishing TTC’s  During the early 2000s, TTC undertook further second and third core earnings drivers (the Life global expansion of auto components. Ventures & Community and Earth & Resources field) included a vehicle safety and emissions testing alongside the automotive field (Mobility). systems alliance with the U.S. company Environmental Systems Products (ESP); a Toyota Tsusho Evolution venture with Kobe Aluminum to develop Birth to 1970s – From consumer finance to the aluminum suspension forgings in the U.S.; a Toyota Groups’ trading company: The first venture with Toyota Group members Denso and incarnation of TTC, Toyoda Kinyu Kaisha, was Toyota Industries to remanufacture automotive founded in 1936 to provide consumer financing for air-conditioning compressors in the U.S.; a new Toyota vehicles and then expanded into the trade center in Mexico to process electrical sheet steel field in 1945. Following the forced dissolution of for automotive parts such as transformers; and holding companies after the Second World investments in the Zeon Corporation's new War, a successor company Nisshin Tsusho Kaisha Polymix Company in Guangzhou, to was founded in 1948. During the early 1950s, the produce carbon masterbatch for rubber parts in company set up offices in Dhaka, Tapei, Hong automobiles. Furukawa also worked with the Kong, Bangkok, Jakarta, and Dallas. The company, Nichimen Corporation (a trading company that renamed Toyoda Tsusho Kaisha in 1956, established is part of the Sanwa Bank Group) to transfer its first overseas joint venture in in 1957 Nichimen's Daihatsu Motor business to Toyota and its first overseas subsidiary in New York in Tsusho in order to expand Daihatsu's sales and, 1960. In 1964, the company began exporting Toyota in turn, widen the scope of TTC’s own vehicles, starting with the Dominican Republic. automotive business. During the next ten years, the company set up  TTC also continued the expansion beyond auto. subsidiaries in Brazil, , Belgium, the o In 2000, TTC acquired Kasho Corp., a Philippines, , , Australia, and Japanese trading company with activities , to complement existing regional in Asia, the U.S., and the U.K. that subsidiaries in Thailand and the U.S. In 1977, TTC produced rubber, chemicals, pulp & paper, listed on the Nagoya and Tokyo stock exchanges. In agricultural products, processed foods, 1979-1981, the company expanded in China, marine products, and general merchandise. including Shanghai and Guangzhou. o Also during the early 2000s, Toyota Tsusho invested in Tomen Corporation, 1980s – 1990s - Overseas forays as Toyota which had diverse business ventures, globalizes: In 1985, cumulative exports of finished including chemicals and , vehicles produced by Toyota, Daihatsu, and Hino foodstuffs, IT, telecom and power supply (all part of the Toyota Group) reached 1 million equipment, and . In 2006, TTC then units. In 1987, the company changed its name to acquired Tomen (which was about half the Toyota Tsusho Corporation. As the Toyota Group’s size of TTC) for ¥176 billion (US$1.7 companies expanded manufacturing overseas, billion), TTC’s largest deal to date. Toyota Tsusho established dealerships and other bases overseas and began manufacturing Toyota 2010s - Widening business areas, sustaining vehicles in India and Pakistan. In 1998, in its largest growth: Toyota Tsusho is now broadening and overseas foray to date, TTC set up a production deepening operations in existing businesses while venture to produce Toyota SUVs in India, plus a accelerating investment in new ones. TTC is steel and logistics center also in India. In the same emphasizing renewable energy, businesses in Africa, year, TTC formed a joint venture with Mitsubishi and other areas with significant expansion in Chemical (Japan) and Sinopec (China) to demand. In 2012-2013, TTC completed acquisition manufactured polypropylene compounds for high- of CFAO, a French trading company with auto and grade molded vehicle parts. In 2000, together pharmaceutical operations centered on Africa. with , TTC bought a stake in Shenyang Shenfei, a bus production firm in China. In an early initiative beyond the vehicle sector, in 1991, TTC

2

Major Business Lines (2014 revenue share) TTC Organization in 2013

Metals (24%): Steel construction materials; Regional Offices & Affiliates nonferrous metal ingots; precious metals; wire rods;  Japan: 14 offices (head offices in Nagoya & steel tubes; copper; steel & copper alloy products; Tokyo, plus 9 branches and 3 sub-branches) iron & steel scrap; nonferrous metals scrap;  Overseas: 51 offices (26 trading subsidiaries aluminum & ferro-alloy products; pig iron; vehicle plus 25 country offices) recycling; waste catalysts; rare earth metals.  Divisional production and sales affiliates (inc. minority equity): 936 in about 50 countries Electronics and chemical products (22%): Electronic devices; automotive embedded software Leadership committees that report to the CEO development; network integration services; software;  Enterprise Risk Management Committee: mobile phones; organic, fine, & inorganic chemicals; Assess risks and set risk buffer limits chemical additives; batteries & electronic materials;  CSR Committee: Plan building blocks of CSR, pharmaceuticals and pharmaceutical ingredients. including safety, environment, compliance, and corporate contributions Machinery, energy, and projects (20%): Machine  Executive Committees: Councils to deliberate tools, industrial & textile machines, testing & business execution, including Executive Board measuring instruments, electronic & construction Members’ Meeting, Operating Committee, machines, environmental equipment, & industrial Policy Committee, Investment and Loan vehicles; liquefied petroleum gas, petroleum Committee, and Investment and Loan Meeting. products, coal, crude oil, petrochemical, & natural  Corporate Management Committees: gas products; infrastructure projects; water treatment; Councils for executives in charge of divisions to energy & electric power supply services. discuss strategic themes that span the company.

o Human Resources Enhancement: Human Automotive (17%) resource training.  Vehicles: Passenger vehicles, commercial & o Corporate Business Promotion: New light vehicles, two-wheeled vehicles, trucks & business involving the whole company. buses, automotive parts. o Overseas Regional Strategy: Strategies for  Vehicle components and services: Component key overseas markets, as well as emerging parts for automotive production; automotive nations and resource-rich countries. accessories and materials; packaging materials; o Cost Reduction and Kaizen Promotion: logistics; tire and wheel assembly services; Improvements and cost reductions techno park services. throughout company o IT Strategy: Company IT strategies Global production parts & logistics (12%): Components for auto production, tire and wheel assembly; techno-parks, auto accessories, packaging Evolving Vision and Current Strategy materials; logistics

Food and agribusiness (4%): Feed & oil seeds; Vision 2010: In 2000, TTC established Vision 2010. grains; processed foods; food ingredients; agriculture, They planned to operate the automotive business as marine, and livestock products. their core venture, while expanding in three fields: Digital (IT & electronics), Ecology (environmental,

Consumer products and services (2%): Life & building on experience in used car recycling), and health, property & casualty insurance; security Life & Living (consumer products and services). In brokerage services; nursing-related products & doing so, the company had the goal of moving past is services; medical facilities & services; medical traditional function as a trading company, to equipment; lodging & living facilities, commercial developing new markets and technologies and facilities, & housing services; housing & office becoming being a value integrator for customers and materials; textile raw materials & apparel. other stakeholders. Value integration in procurement and other parts of the value chain was becoming

particularly important as major customers such as

Toyota Motor expanded overseas.

3

Vision 2015: In 2006, under the new leadership of synergies between its divisions, particularly as Junzo Shimizu, Toyota Tsusho prepared Vision they link into the three core fields (Life and 2015—Lead the Next, which called on the company Community, Earth and Resources, and to realize a 50:50 earnings ratio for the automotive Mobility). TTC believes that many value chain sector and sectors beyond the automotive sector integration services will have higher margins businesses by the ending March 31, 2016, than basic trading activities. from the 2006 share of 70:30. Since this time, the company has worked to establish second and third core earnings drivers alongside the automotive sector. In 2013, TTC still realized about 60% of its revenue from the auto sector.

Global 2020 Vision: In 2011, now under the leadership of Jun Karube, Toyota Tsusho prepared the Global 2020 Vision to clarify its mission over the coming decade. The Global 2020 Vision calls on the company to establish business mainstays in three  Expansion in Africa: Toyota Tsusho has core fields and to create synergies among them. The identified Africa as the source of greatest company uses the term “Try-1” to reflect the goal of geographic growth over the next decades, with achieving a balance in three business fields. somewhat less competition so far. The  Mobility: Contributes to the evolution of next- company believes that all three of its core generation automobiles. fields offer relevant value to customers  Life and community: Contributes to throughout the continent. improvements in living conditions.  Earth and resources: Contributes to solving global issues.

“G Value”: In 2006, TTC adopted the slogan of “G value with you” to highlight three major messages (TTC sometimes adds “Green” as a fourth “G”)  Global: Expanding activities in a global arena  Glowing: Maintaining a healthy, glowing enthusiasm and passion  Generating: Continually generating new business

Performance target: The company’s current Current Challenge: 2014 numerical target is to achieve net income of ¥130 billion (US$ 1.3 billion) and ROE of 12% to 15% by Each of TTC’s markets has strong competitors, March 31, 2018 ($709 million and 6.3% in 2014). including other trading companies, more specialized multi-national firms, and domestic firms. TTC offers some differentiated products (such as the Toyota Current strategy: TTC’s current strategy brand) but faces strong price competition for many emphasizes two main themes: value chain basic products. TTC believes that differentiation integration and expansion in Africa. advantage in the future largely will arise from  Value chain integration: Toyota Tsoshu was a specialized services and value chain integration. pioneer in offering integrated services to its clients, beginning as early as the 1990s. Today, The current challenge for Toyota Tsusho is to grow within each of its divisions, T seeks to offer profitably, both by expanding its individual value added services throughout the full value businesses and by identifying opportunities to chain that brings goods and services to its leverage activities among its businesses. customers’ product markets. In addition, the company seeks to identify value chain

4

Sources Exhibits  https://www.capitaliq.com/CIQDotNet/company.  Toyota Tsusho in Africa aspx?companyId=877208  Trading sector competitors  http://www.mergentintellect.com/index.php/sear  Major acquisitions: Kasho (2000), Tomen ch/companyDetails/690537790/competitors# (2006), & CFAO (2012) profiles  http://en.wikipedia.org/wiki/Toyota_Tsusho  Strategic activity, 2000-2014  http://www.referenceforbusiness.com/biography  Initial value chain integration: Early 2000s /F-L/Furukawa-Masaaki.html examples  Toyota Tsusho home site  Value chain integration in TTC’s seven divisions o http://www.toyota- in 2013 tsusho.com/english/ir/individual/history/  TTC global auto dealership network, 2006 o http://www.toyota-  Examples of synergies across the three core tsusho.com/english/corporate/history.html fields o http://www.toyota-  Principal subsidiaries & affiliates, by division tsusho.com/english/corporate/history_kash  Available in spreadsheet o.html o Income statement, balance sheet, &  Toyota Tsusho annual reports, 2004 to 2013 employment trends, 1985-2014  Multiple on-line sources o Business lines and geographic segment trends, 2002-2014 o Competitor financials, 2008 & 2013 o CFAO financial trends, 2006-2013 o Subsidiaries: Countries & divisions o Toyota Group financials (Toyota Motor, Toyota Industries, Denso)

5

Exhibit. Toyota Tsusho in Africa, 2013-2014 In recent years, TTC has expanded the value chain in [excerpts from 2013 annual report] this region to include leasing, other sales financing services, and used vehicle sales. In addition, they OPPORTUNITY IN AFRICA conduct logistics, processing, and recycling As economic growth in the BRICs begins to show businesses to support the automotive industry in signs of deceleration, Africa, together with Southeast South Africa. These efforts are expanding the scope Asia and Latin America, is displaying growth rates of their business to include the full auto lifecycles. that exceed the global average. The driving force TTC’s operations in Africa include downstream behind this growth is the region’s explosive areas, such as automobile sales. The company population growth. In 2012, the total population of believes that this represents an edge over the Africa was roughly 1.0 billion. In 2020, this figure is competition. Distributors in eight African countries in anticipated to expand to around 1.2 billion. which the company invests have a combined As the population grows, fundamental social Japanese staff of 45 members, which is the largest of infrastructure, such as roads and electricity-related any Japanese general trading company operating in systems, will need to be constructed, and the region Africa. They also employ 2,500 local staff members will increasingly develop its wealth of natural from which they actively seek skilled employees to resources. These trends are anticipated to fuel fill managerial positions. economic growth over the medium- to long-term, and TOYOTA TSUSHO IN AFRICA IN THE 2010s the benefits of this growth will be felt by the populace, resulting in a rise in income levels and the In the 2010s, TTC is creating new business based on expansion of the middle-income demographic. synergies between the regional foundations and Accordingly, the markets for automobiles and other operational knowledge they have accumulated. In consumer goods are forecast to grow. Egypt, they previously focused on power plants. In 2011 they branched out with the establishment of a Toyota Tsusho views Africa, with its exceptionally joint venture with Toyota Motor Corporation that high growth potential, as an important strategic conducts a complete knock-down (CKD, shipment of regions. They plan to be a leader in the region. complete production kits for local assembly) business TOYOTA TSUSHO EXPERIENCE IN AFRICA entailing the contract assembly of SUVs and related quality management tasks. This venture was made Toyota Tsusho’s history in Africa began in 1922, possible by the trust they have established with local when they purchased cotton wool from Eastern government and companies while developing Africa. Since then, they have expanded their business infrastructure businesses as well as human resources foundations in this region, primarily developing and other assets they have accumulated. operations in Northern Africa with an emphasis on constructing power plants. They have a track record This success was also brought on by the experience in Egypt, where rising electricity demand has led they have accumulated through assembly businesses them to receive orders for 31 power plants, with a in Eastern and Southern Africa. As such, this total value of approximately ¥200 billion. represents a prime example of leveraging the strength of regional foundations to expand from the Earth and Engagement in the automotive business in this region Resources field to the Mobility field. began in 1964, when they started exporting completed automobiles to Kenya. Later, in 1991, they At the same time, TTC has expanded from the invested in local distributors in Angola and three Mobility field into the Earth and Resources field. other countries. Then in 2001, they acquired This transition was marked by the receipt of an order distributors for Toyota automobiles in seven for a geothermal power generation project in Kenya countries, including Kenya, from a British trading in 2011. The project is will have Kenya’s largest company. They have continued to steadily develop generation capacity and will generate 25% of the automotive operations focused on the English country’s current total generation volume; the order speaking regions of Eastern and Southern Africa, has reached ¥30 billion. The company was entrusted even when political unrest led a number of with this project thanks to the strong relationship they companies to withdraw from the region. In 2013, have established with the government throughout the they were conducting the automotive business, which automotive businesses as well as the synergies involves the sales of completed automobiles and created with the power plant-related knowledge they repair parts as well as the provision of related after- have developed in Egypt. Roughly 44% of Kenya’s sales services, in 30 countries throughout Africa. electricity is generated through hydropower, but the operating ratios of the country’s hydropower

6 facilities have dropped in recent years due to characterized by speed and an entrepreneurial spirit. droughts. Meanwhile, electricity demand is rising by TTC believed it would be important to maintain the 5% each year, creating concern for the sufficiency of transparency of management together with CFAO’s electricity supplies. As geothermal power is a stable autonomy and continue to exist as a French company. alternative to hydropower that is a form of renewable AFRICA EXPANSION FOR TTC CORE FIELDS energy, there are high expectations with regard to the plant’s completion in September 2014.  Mobility: In the Mobility field, TTC and In addition, the company signed an MOU with the CFAO’s regional strategies complement one Kenyan Government in August 2012, with the intent another. TTC sells about 22,000 new to provide support toward realizing the country’s automobiles per year in 30 countries in Eastern national vision. As part of this agreement, the and Southern Africa, whereas CFAO sells about company will form project teams with the Vision 95,000 new vehicles each year in 32 countries 2030 Delivery Board in the automobile, power and and other markets. Accordingly, the Group’s energy, petroleum and mineral resource, sales network now spreads to 52 of the 54 environmental preservation, and agricultural countries in Africa. In addition, while the industrialization fields, in order to advance initiatives company primarily deals in Toyota Group in accordance with the vision. vehicles through its ties with Toyota Motor and Fuji Heavy Industries, CFAO handles over 20 Kenya and four other East African countries have different brands of automobiles, enabling formed a regional intergovernmental organization response to a more diverse range of consumer known as the East African Community (EAC). This needs. This union is expected to establish a union boasts a collective GDP of approximately strong market presence with a combined new US$100 billion. Viewing these five countries as a vehicle sales volume of 117,000 vehicles, for a single economic sphere, the company aims to share of around 15% of the total African market. improve profitability in the region. To this end, in  Life and Community: CFAO possesses solid November 2012 they decided to make the Nairobi foundations in the Life and Community field. office of Toyota Tsusho Africa into a local The company has built a leading position in subsidiary. They are currently developing operations Africa’s pharmaceuticals wholesaling market. in this region in the power generation and agriculture CFAO procures approximately 21,000 different fields as well as in other fields beyond Mobility. varieties of pharmaceuticals from 450 different CFAO ACQUISITION, 2012 makers, mainly European, which it sells in 21 countries in Africa and seven French overseas The CFAO acquisition helps TTC advance into territories. TTC plans to focus on the healthcare Western Africa and grow operations in the Life and field and this alliance is expected to contribute Community field. greatly to efforts in this area. By combining CFAO’s logistics knowledge, honed through CFAO is France’s largest trading company, with a wholesale supply of pharmaceuticals to history stretching back to 1887. Centered on Western approximately 5,000 drugstores and hospitals, and Central Africa, CFAO sells automobiles in 32 with support from TTC’s experience and countries. It also holds the no. 1 share for wholesale networks, TTC expects to expand the regions in drugs in Africa. It has developed a diverse portfolio which they operate healthcare businesses. that includes production and sales of beverages and beer. Leveraging its business network throughout  Earth and Resources: As Africa continues to Western and Central Africa, CFAO has recorded a experience robust economic growth, the 7% average annual growth rate since 2006. establishment of infrastructure and especially the expansion of power plants are becoming pressing In TTC’s regional expansion plans, the relationship issues. With its rich background in relation to with CFAO is complementary. CFAO’s ratio Earth and Resources, Toyota Tsusho is between automotive sector sales and sales in other positioned to make significant contributions sectors is 6:4, similar to TTC. It shares the vision of toward addressing these issues. Leveraging their strengthening operations in consumer goods, such as experience and project expertise accumulated in healthcare. TTC is facilitating union between CFAO Egypt and other countries as well as the network and the company to enable better coordination. As and reputation for reliability CFAO has fostered one such step, they dispatched a director from the over its 125-year history, TTC is seeking company to CFAO in January 2013. In addition, in business opportunities to improve its track record February 2013 they decided to maintain CFAO’s in a wider range of regions. listing on Euronext Paris. CFAO’s operations are

7

Exhibit. Trading Sector Competitors machine parts and industrial machinery; fuels; raw materials; foodstuffs; textiles; and other Many of the world’s leading trading companies are products worldwide. It is also involved in the based in Japan, reflecting the country’s expansion as development of industrial parks; and generation a production and trading nation after World War II. of electric power.  Chori (; founded 1861; based in  (founded 2003; based in Tokyo) operates )) operates textiles, chemicals, and as a general trading company worldwide. machinery businesses in China and globally. Segments include machinery; energy and metal  Hanwa (founded 1947; based in Tokyo) trades resources; chemicals; and lifestyle. industrial materials in Japan, Asia, and other  Sumikin Bussan (founded 1941; based in countries. Segments include steel, metal and Oksaka) operates as a trading company globally. alloys, non-ferrous metals, food, and petroleum Segments include foodstuffs; industrial and chemical. machinery and infrastructure; textiles; steel;  (founded 1858; based in Tokyo) machinery and metals; steel; raw materials; and imports and exports worldwide. Segments semi-finished goods. Sumikin Bussan was include textiles; machinery; metals; chemicals; acquired by in 2013. food; ITC; realty; energy; ICT; forest products;  Sumitomo (founded 1919; based in Tokyo) general merchandise; construction and realty; trades worldwide. Segments include metal financial services; logistics; and aerospace and products; transportation and construction electronics. systems; media, network, and lifestyle; minerals,  JFE Shoji Holdings (founded 1954; based in energy, chemical, and electronics; infrastructure; Tokyo) processes and trades steel products; raw real estate; industry development; and media. materials, machinery, chemicals and fuel; food;  Yamato Kogyo (founded 1944; based in Himeji) and electronic product planning. JFE has manufactures and sells steel products and heavy- locations in Asia, Europe, Oceania, North industry processed products, and railway track America, and South America. Acquired by JFE accessories internationally. Segments include Shoji Trade Corp. in 2012. steel; rails; and products for heavy industry.  Kanematsu (founded 1889; based in Tokyo) provides products and services in Japan, Asia Examples of trading competitors outside Japan North America, and Europe. Units include foods,  Daewoo International Corporation (Korea) is electronics, machinery; steel; and environment engaged in trading activities worldwide. and materials. Divisions include trading; resource development;  (founded 1858; based in Tokyo) and manufacturing. The company was founded imports and exports globally. Units include food; in 1967. Posco (steel) acquired Daewoo chemicals; energy; metals and minerals; International for $3 billion in 2010. transportation machinery; power projects and  C&T Corporation (Korea) is infrastructure; plant and industrial machines; engaged in engineering, construction, trading, lifestyle; forest products; finance, logistics, and and investing activities across 50 countries. IT; and real estate. Segments include trading & investment;  Mitsubishi (founded 1950, based in Tokyo) engineering & construction; wholesale and retail; operates as a global general trading company. and manufacturing. Samsung C&T, which is part Divisions include industrial finance, logistics, of the Samsung Group, was founded in 1938. and development; energy; metal; machines;  Rieter Holding AG (Switzerland) supplies chemicals; living essentials; environment and textile machinery and components for short infrastructure; and business services. staple spinning worldwide. It has two  Mitsui (founded 1947, based in Tokyo) operates segments, Spun Yarn Systems and Premium as a global general trading company. Segments Textile Components. Rieter was born in 1795. include iron and steel; minerals and metal; machinery and infrastructure; chemicals; energy; lifestyle; corporate development; food and retail; consumer service and IT; and logistics and financial services.  Nippon Steel & Sumikin Bussan Corporation (Nippon Steel Trading; founded 1977; based in Tokyo) markets and imports/exports steel;

8

Exhibit. Major Acquisitions Tomen Corporation Profile (acquired 2006 after 2000 alliance) Kasho Co. Profile (acquired 2000)  Business lines before acquisition: Trading  Business lines before acquisition: Domestic company dealing in chemicals; food; textiles; sales, exports & imports: rubber; chemicals; pulp electronics; machinery; energy & paper; agricultural products; processed foods;  Sales: ¥1,577 billion ($15.5 billion; 3/31/2005) marine products; general merchandise.  Sales: ¥174 billion ($1.7 billion; 3/31/2000) Tomen events: 1920 formation – 2006 acquisition  1920: Toyo Menka Kaisha formed (Osaka); Kasho events: 1923 formation – 2000 acquisition cotton business taken over from Mitsui & Co.  1923: Shoichi Ishikawa, GM of Tokyo branch of  1947: Machinery, metals, food businesses started Kato Shokai, founds Kato Shogyo (Kasho  1949: Sanyo Oil & Fat (now Sanyo Chemical) forerunner) Tokyo, after Tokyo branch of Kato established as joint venture with Toyo Shokai burns down in the Great Kanto (now Toray Industries) Earthquake; trading activities mainly with  1950: Listed on Osaka and Tokyo exchanges Southeast Asia (capital:¥200,000)  1951: Toyomenka (Tomen America) established  1924-1926: Singapore and Kobe offices  1955: Kanegafuchi merger expands textiles  1928: Name changed to Kasho Co. Ltd.  1955: Listed on Nagoya exchange  1933-1934: Nagoya and Osaka offices  1961: Taiyo Bussan Kaisha merger expands food  1960: San Francisco office  1963: Nankai Kogyo merger expands metals  1969: Listed on 2nd section of Tokyo Exchange;  1965: Sunpot Co. (gas-fueled equipment & Kasho (U.S.) established (San Francisco) electrical appliances) formed in Hanamaki (sold  1970: Jakarta office to Chofu Seisakusho in 2007)  1977: Listed on 1st section of Tokyo Exchange  1968: Grain silo business launched; operation of  1980-1985: Beijing and Shanghai offices grain-processing complex in Higashinada started  1988: Kasho (U.S.) establishes Chicago office  1970: Name changed to Kabushiki Kaisha  1989-1990: Manila and Fukuoka, Japan offices Tomen; dual head office (Tokyo, Osaka)  1991: Divisions formed: Food; General  1980: Tohoku Grain Terminal Co. established Merchandise, Paper & Pulp; Chemical & Rubber  1983: Advanced Products (now Tomen  1993-1995: office & Myanmar Kasho Electronics Corporation) acquired  1996: Kasho acquires Tokyo Maruichi; Ho Chi  1987: Power supply business launched; wind Minh City office formed power generation project started in the U.S.  1999: Alliance with TTC  1988: Tomen Power Corporation established  2000: Acquisition by TTC (Kasho’s bank  1989: Toyomenka (U.K.) established encouraged the acquisition because Kasho was  1990: Spin-off cotton business to Toyo Cotton heavily leveraged with debt)  1990: Japan rights (trademark, exclusive development & distribution) for agrochemical Kasho integration activity product "ORTRAN acquired from Chevron  TTC integrated lines that it shared with Kasho  1990: P.T. Styrindo Mono established  TTC used Kasho’s broader consumer presence to  1990: English name changed to Tomen Corp. expand its business mix  1992: Tomen Devices Corporation established  1999: Tomen Electronics listed on 2nd Section of Tokyo Exchange  2000: Alliance & equity investment by TTC (private placement of shares worth ¥7.5 billion)  2001: Tomen Electronics listed on 1st section of Tokyo Exchange  2001: Life science business integrated with Arysta LifeScience  2001: Spin-off part of power supply business into Tomen Power (now Eurus Energy Holdings)  2003: Sunpot listed on 2nd section of Tokyo Exchange

9

 2003: Private placement (¥10 billion) to Toyota CFAO SA Profile (acquired 2012 for €2.3 billion) Tsusho and Toyota Motor  2004-2005: Tomen Devices listed on 1st & 2nd Background: CFAO SA distributes automotive and sections of Tokyo Exchange pharmaceutical products in Africa, France, and  2006: Acquired by TTC for ¥176 billion (US$ elsewhere. The company was formed as 1.7 billion) Etablissements Verminck in 1845 and changed its name to CFAO in 1887. CFAO is an acronym for Tomen integration activity Compagnie Française de l’Afrique Occidentale  Following the initial investment and alliance in (French Company of Western Africa). CFAO is 2000, the companies reduced logistics costs by based in Sevres, France. CFAO was acquired by TTC sharing chemical tanks and conducting joint in 2012, but continues to operate independently. negotiations with shipping companies.  They also collaborated in the core consumer Sales: $4.7 billion (2012); $5 billion (2013) products and services industry through niches such as home healthcare and textiles. They began TTC paid €2.3 billion to Paris-based PPR to buy integration of relevant activities within the CFAO in order to expand its business in Africa. The metals, and machinery, temporary staffing, deal was TTC’s biggest acquisition since its purchase and insurance businesses. of Tomen. The sale gave PPR, owner of the Gucci  The two firms promoted personnel exchanges at luxury brand, an exit from assets that did not fit its various levels, such as joint training focused on strategy to focus on sporting and luxury goods the theme of creating new businesses and after- hours meetings for sharing information between Business lines the companies when discussing and solving  CFAO Automotive division: Purchase, storage, common issues. import, & distribution of passenger &  TTC accelerated such integration following the commercial vehicles, heavy trucks, & full acquisition in 2006. motorcycles; provision of after-sale services; sale of spare parts & tires.  Eurapharma division: Imports, wholesales, and resells pharmaceutical products and services to pharmacists; and acts as a distribution agent of pharmaceutical products, as well as sells and delivers products on behalf of pharmaceutical companies to local pharmacists, hospitals, non- profit organizations, institutions, doctors, and local wholesalers.  CFAO Industries, Equipment & Services o Beverages: Manufactures and bottles beverages, including beers under the Primus, Ngok, Turbo King, Mutzig, Heineken, and Amstel brands, as well as

Coca-Cola brand beverages o Consumer: Produces and distributes pens and razors, as well as a range of plastic packaging products for the food and petroleum industries; manufactures BIC writing and shaving products; and imports and sells BIC lighters. o Industrial: Installing and maintaining elevators; distributing construction and handling machineries, agricultural equipment, and generators; renting vehicles and automotive equipment; o ICT: Design and implementation of solutions for IT infrastructure and systems, networks, and telecom for private and public companies.

10

Exhibit. TTC Strategic Activity, mid 2000s-2014 starting a sesame processing business in Qingdao, processed and frozen prepared food business in Dalian, and bread Examples of mid 2000s Strategic Initiatives manufacturing business in Beijing. 2003-2004 examples o Insurance: Acquired insurance broker in  Sheet steel processing in Mexico Thailand and set up insurance company in  JV with & Mitsui to manufacture Singapore. aluminum forgings in US o Nursing care: Opened two service offices  Parts assembly and logistics business in Mexico for nursing equipment rental; now operate  Engineering company in Tianjin, China seven offices.  JV with Kobelco Construction Machinery for o Housing: Expanded real estate construction machinery in Hangzhou, China securitization from condominiums to  JV with Toyofuji Shipping and a Chinese marine commercial facilities transportation company to create CSC Fenghai Motor Logistics in China, for shipping finished automobiles by sea “TRY-1” Initiatives: 2007-2012  Spun off part of IT and Electronics department to (reported in 2012 annual report) create Toyotsu Electronics, a semiconductor and software sales company for car electronics.  Divisions: Metals; Global Production Parts &  License with Toyota Central R&D Labs for Logistics (GPPL); Automotive; Machinery, visible-light response photocatalysts Energy & Project (MEP); Chemicals &  Joint development with Futaba Industrial and Electronics; Produce & Foodstuffs; Consumer TKY Corp. of diesel engine emission gas Products, Services, & Materials purification devices  Contributions: “Mobility”, “Life &  Liquidate condominium assets in Tokyo Community”, “Earth & Resources” core fields

 Expanded wind power generation, launching five 2007 “Try-1” investment (¥ billion): Auto=¥58, new businesses in Japan, including J-Wind Other=¥7 Tahara with the Electric Power Development (largest wind power business in Japan’s ports)  GPPL (Mobility): Established automotive component company in Guangzhou  Assigned Toyotsu Recycle Corporation to undertake disposal of shredded vehicles for four  Auto (Mobility): Established distributor in domestic companies (including Toyota Motor Ecuador and Motor) and four overseas companies  MEP (Earth): Began biogas clean development mechanism project in Thailand: 2005 – 2006 examples  Consumer (Life): Developed integrated  Machinery and Electronics: Set up company in condominium and general hospital Beijing to develop map software for car navigation systems; first foreign-capital- 2008 “Try-1” investment: Auto=¥39, Other=¥21 affiliated company to be established in China.  Auto (Mobility): Entered used vehicle retail  Auto: JV dealership with Yamaha Motor in business in Japan China, utilizing experience gained from Russia;  MEP (Earth):: Export power transformers to also in China, started sales company for auto Iraq; equity in natural gas concession in replacement parts in Tianjin, as well as parts Australia maker and electric machinery maker  Chemicals (Life): Invested in North American  Consumer venture capital fund for leading-edge materials o Textiles: In China, expanded airbag shell  Food (Life): Constructed additional storage silos sewing business and established joint for feed grain in the Chukyo region of Japan venture to manufacture carpets for luxury  Consumer (Life): Tie-up with Fukuske (hosiery) vehicles. Together with Tomen, began manufacture of textile products that use 2009 “Try-1” investment: Auto=¥41, Other=¥24 photocatalysts based on technologies  Metals (Mobility & Earth): Established molten created by Toyota Central R&D Labs aluminum production company in Hokkaido; o Foodstuffs: In China, expanded food entered rare earths business processing activities in cooperation with  GPPL (Mobility): Invested in TOPIX Corp; local and other companies, as well as introduced TPS expertise

11

 Auto (Mobility): Established Yamaha joint (polyethylene terephthalate) joint venture in venture in Cambodia; joins auto fabrics business Taiwan with businesses of Toyota Boshoku (auto interior  Food (Earth, Life): Began technical systems, filters, powertrain) and Kawashima collaboration with Kinki University to develop a Selkon Textiles (textile & interior decoration). complete bluefin tuna culture business  MEP (Earth): Began drilling of marine gas fields  Consumer (Life): Agreement for exclusive in Egypt import and sales rights in Japan for Italian  Chemicals (Life): Divested mobile phone sales competition swimming apparel brand Jaked business and established new company with Denso 2012 “Try-1” investment: Auto=¥27, Other= ¥88  Food (Life): Entered agricultural production  Metals (Mobility, Earth): Established business in Japan automobile salvaging and recycling plant in  Consumer (Life): Entered insurance business in China; established manufacturing base for steel Bangalore, India; made uniform manufacturing piping for automobiles in Mexico company a wholly owned subsidiary  GPPL (Mobility, Life): Established industrial park management company in Indonesia 2010 “Try-1” investment: Auto=¥22, Other=¥61  Auto (Mobility): Entered business to wholesale wheels for imported vehicles; entered assembly  MEP (Earth): Participated in the Goreway manufacturing business in Egypt power plant project in Canada; Eurus Energy  Machinery (Earth): Won a contract for Kenya’s (joint venture between Tokyo Electric Power largest geothermal power generation project and TTC) acquired Sout Korean solar power  Chemicals (Mobility, Life): Acquisition of company Jindosun Park, which oversees Elematec Corporation (electrical, electronic, electricity generation in Korea and activated optical components trading); established plant in the U.S. in 2011; acquired UK-based operating company for music streaming to Calenergy Gas's 5% stake in Otway gas project vehicles and exploration rights in Australia  Food (Life): Invested in flour mill in Indonesia;  Chemicals (Life): Concluded agreement for entered frozen vegetable manufacturing business exclusive agency in Japan with ChemRoutes in Corporation of Canada (entered pharmaceutical development support business); Toyota Motor  Consumer (Life): Developed retail business in introduced low-carbon "ecological plastic" China; entered insurance brokerage business in material, developed by TTC, as the world's first Vietnam use of bio-polyethylene terephthalate (Bio- PET) derived from sugar cane 2013 “Try-1” investment (planned): Auto=¥50, Other= ¥250  Food (Life): Established company to sell raw materials for feed and oilseeds in Malaysia  MEP (Earth): Acquisition of Eurus Energy Holdings (wind and solar power globally)  Consumer (Life): Acquired additional shares of Fukuske Corporation to make it a subsidiary  MEP (Earth): Minority stake in Encana natural gas development in Canada and natural gas 2011 “Try-1” investment: Auto=¥21, Other=¥58 concession in Australia  Metal (Mobility): Invested in India’s only  Chemicals (Earth): Construction equipment manufacturer of stainless steel piping for sales & leasing automobiles and motorcycles  Consumer (Life): Hospital operation joint  GPPL (Mobility): Entered vehicle logistics venture with Group and local company business in India, following on from China and in India Thailand  Auto (Mobility): Made Subaru distributor in South Africa a wholly owned subsidiary  MEP (Earth): Entered the U.S. gas-fired power generation business; participated in natural gas production project in Australia  Chemicals (Mobility, Earth, Life): Invested in iodine development and production operating company in Chile; established Bio-PET

12

2013-2014 Initiatives  Metals: Acquired equity stake in Beijing Borui Liantong Auto Recycling Tech Co. in China, where vehicle scrapping is growing; first Japanese company to enter auto recycling business in China  GPPL: Acquired stake in PT Astra Otoparts, Indonesia's largest auto-component manufacturer; acquired Borneo Technical (Malaysia) aftermarket auto parts distributor; acquired Borneo Technical (Thailand); agreed to be exclusive Japan distributor of Direct Methanol Fuel Cells (DMFCs) developed by Oorja Protonics U.S. fuel cell startup  Auto: In Cambodia, where used vehicles account for majority of market, partnered with Denso and Aisin Seiki to establish Pit & Go Auto Service stores; expanded sales & service in other frontier markets with expected growth in Asia & Africa  MEP: TTC & Mitsui Engineering won contract from Kenyan government to supply cranes to Mombasa Port, the largest port in East Africa; partnered with Competitive Power Ventures Holdings and ArcLight Capital Partners in U.S. to construct and operate gas-fired power plant in New Jersey  Chemicals & Electronics: Acquired equity stake in San-Dia Polymers (Sanyo Chemical), which manufactures superabsorbent polymers (renamed SDP Global); prepared to acquire Tomen Electronics.  Food & Agribusiness: Expanded sales of Australian grains to Japan and Southeast Asia, via Australian grain accumulation and exporting affiliate; entered food service business by acquiring an equity stake in Fuji Sangyo; alliance with Kokubu for domestic and overseas expansion of food business  Consumer Products & Services: Partnered with Secom Medical System and India's Kirloskar Group to open jointly owned and operated general hospital in Bangalor; merged Toyotsu Hoken Customer Center and Toyotsu Family Life to form Toyota Tsusho Insurance Partners Corporation, one of Japan's largest insurance agencies.

13

Value chain integration (VCI): Early 2000s strategies, the division assists management by examples supporting governance and compliance through its [excerpts from 2004 and 2005 annual reports] risk management and public relations functions. The division also plays a “reform promotion role” by VCI strategy launch: TTC began active emphasis on examining and rebuilding Toyota Tsusho’s business value chain integration across and within its divisions portfolio, strengthening the structure for consolidated during the early 2000s. The following examples operations, and cultivating and utilizing personnel describe some of the initiatives. with an international perspective.

Global Strategic Integration (GSI) division: The Metals division: In our steel business, we offer division utilizes its global support functions to assist efficient and high-quality services in logistics, and make direct profits contributions to each product including development of the world’s first Container division. While building logistics, IT, and other Vanning Technology (CVT) for shipping steel sheets infrastructures shared by each business, the division in containers to overseas destinations. links identifies opportunities for joint activities among divisions. The Global Strategic Integration Machinery and electronics division: In the Division provides multiple high-quality services information business, we offer systems integration to including central coordination role for large scale support and build telecommunication networks for projects that span product divisions, incubation Japanese companies based in North America, China, functions such as uncovering and cultivating new and other Asian countries. Responding to the rapidly business deals, and involvement in the operation of expanding overseas production of automobile technopark and subassemblies businesses. manufacturers, we are focusing on the global development of an efficient and high quality value chain. We support customers with procurement and GSI division: Integration functions (mid 2000s) preparations for local production at their overseas  Logistics: Plan, build, and operate logistics production bases. The effort includes creating an infrastructure engineering company in Tianjin, China, following  IT: Build and support IT infrastructure similar operations in the U.S., Thailand, and Vietnam. We started a maintenance operations base  Innovation: Develop new businesses in Europe jointly with our customers. We expanded  Global: Plan and support overseas projects our network systems business, which is centered on our subsidiaries in Singapore, Thailand, and GSI division: Logistics overview elsewhere in Asia. In the business of supplying parts  Goal: “Fast, low-cost, reliable” product delivery for overseas auto production, we established  Process: Locally based decision making, backed procurement logistics operations in Thailand and by high-quality and efficient operations based on Indonesia in collaboration with the Logistics Project the Toyota Production System (TPS), while Team of the Global Strategic Integration Division. In building a “win-win” logistics structure based on tandem, by linking operations in Japan and the perspectives of the product shipper and recipient. United States, we expanded our Supply Chain  Integrated information: Logistics planning and Management (SCM) system—a new integrated quick progress monitoring on a global scale by logistics framework aimed at promoting the mutual substituting the fragmented flow of an enormous supply of parts—in eight overseas countries, category of products with integrated information including Asia and Latin America. spanning stages ranging from demand forecasts to ordering, packaging, and transport Consumer division: In the insurance business, amid the ongoing trend of deregulation in Japan, we promoted comprehensive coverage for group insurance contracts and worked to expand sales of insurance to regular and retiring employees at companies with which the company’s divisions do business.

Corporate division: The division formulates and promotes companywide global strategies. Besides formulating management plans and financial

14

Exhibit. Value Chain Integration (VCI) in Toyota Tsusho’s Seven Divisions, 2013 [text & figures from 2013 annual report] VCI: Metals High-Quality Processing, Logistics, and Storage Services The greatest differentiating feature of Toyota Tsusho’s metals business is the high efficiency with which it coordinates its operations with those of processing companies and manufacturers in Japan and overseas. An example of these high-quality operations is the Steel Center, which plays a pivotal role in our steel sheet business. The center facilitates the sharing of information between suppliers and users and provides efficient processing, logistics, and storage optimally suited to each company’s production status. Furthermore, in the nonferrous metals area, Toyota Tsusho operates molten aluminum production businesses in North America, Europe, and Asia. Supplying aluminum molten instead of in the conventional form of ingots reduces overall energy costs and environmental burden. VCI: Consumer Products and Services Initiatives to Expand the Insurance Business In the insurance business, we established Toyota Tsusho Insurance Partners Corporation (TIP) in April 2013. This company will consolidate two insurance business subsidiaries to improve efficiency in the sales agency business and enhance the quality of services provided to customers. This new company handles insurance volumes amounting to ¥53.0 billion, and is avidly strengthening the specialist skills it possesses as one of Japan’s leading insurance sales agency companies. Levering these skills, it will develop operations in new fields, such as providing insurance to senior citizens. Meanwhile, the division’s sales departments are developing new businesses that break away from traditional frameworks, such as

15 providing comprehensive insurance services centered on medical clinics for company employees. At the same time, we are accelerating expansion in overseas markets through cooperation with Toyota Tsusho Insurance Management Cooperation (TIM), which operates as an insurance broker. VCI: Food and Agribusiness Establishment of Toyota Tsusho’s Distinctive Food Safety Management System Toyota Tsusho has established its own food safety management system to ensure food safety. In addition to rigorous selection of suppliers and reinforcement of local supplier management criteria, we are strengthening local and border inspections carried out mainly by the Food Safety Promotion Group in conjunction with specialist external organizations. In these ways, we aim to be a general trading company with an unsurpassed safety management system. VCI: Chemicals and Electronics Promoting Collaboration among Three Areas to Create New Synergy The division’s three business areas— chemicals, electronics, and HEVs [hybrid electric vehicles] — are working in unison to generate new synergies and expand value chains. While growing the earnings of our businesses through inter-division coordination, we will create benefits for people and society in the areas of Mobility, Earth and Resources, and Life and Community VCI: Global Production Parts & Logistics Optimal, Integrated Logistics for Automotive Parts—Vendor to Vendor Utilizing Company logistics bases to transport mixed shipments of components from multiple manufacturers permits small-lot, high- frequency deliveries while reducing transportation costs, delivery times, and inventories. Moreover, we meet the needs of customers by providing services that include production management functions such as order

16 and inventory management. We have constructed a worldwide logistics network comprised of the logistics bases and systems we have installed throughout all corners of the globe. This network enables the Company to provide logistics functions involving import to or export from Japan as well as transportation between different companies through routes that do not pass through Japan. In this manner, we have constructed a system that contributes to the optimization of worldwide procurement efforts, thereby enabling costs to be reduced and items to be procured locally.

VCI: Machinery, Energy, and Project Extending from Development of Resources to Stable Supply In the machinery area, which spans various machinery and equipment, industrial vehicles, and construction machinery, the division not only procures and markets goods but also provides comprehensive support services covering planning and solutions as well as technological development, quality control, and efficient logistics that make important contributions to the building of customers’ production systems. Aiming to ensure stable long-term energy supplies, on a worldwide scale the division develops and supplies such resources as oil, coal, natural gas, and water and develops and operates power generation businesses.

17

VCI: Automotive – Part 1 Integrated Trilateral Structure Supports Vehicle Exports Worldwide Toyota Tsusho has established a trilateral structure that integrates sales, spare parts, and services with varying specifications to match the conditions of each country to which the vehicles are exported. While providing integrated support ranging from ordering to delivery, we also actively nurture personnel to further enhance services and technical skills. We develop our operations by grouping automobile retailers in 84 countries throughout the world according to region and adopting optimal policies that meet the specific needs of each region. Our regional headquarters— responsible for operations in each area, such as Africa and the South Pacific— adopt region-wide sales and marketing strategies. In the key regions of Africa, Asia, Oceania, and Russia, our efforts are directed at expanding our retailer network.

VCI: Automotive– Part 2 The Toyota Tsusho Group’s business is not limited to simply providing materials, manufactured goods, and other products. Our business transcends the traditional boundaries of trading companies by exploiting its capabilities to create new value in a broad range of business areas. Born out of our business investments, these capabilities range from developing resources for use as raw materials to planning and building efficient supply chains and reusing and recycling waste materials. Moreover, we boast capabilities for improving operations based on the renowned Toyota Production System (TPS). As well as implementing comprehensive improvement initiatives for the logistics, manufacturing, and operational processes of its production sites, Toyota Tsusho develops such initiatives for partners and customers in businesses beyond the automotive sector.

18

Exhibit. Toyota Tsusho global auto dealership network, 2006

Exhibit: Examples of synergies across the three core fields (2012 annual report)

Global span of synergies  Rare earths (Metals division): India, Indonesia, Vietnam, Canada  Iodine (Chemicals and Electronics division): Chile  Bio-PET (Chemicals and Electronics division; plastic derived from sugar cane).: Brasil and Taiwan  Music streaming (Chemicals and Electronics division): Japan, China

19

Exhibit. Principal Subsidiaries and Affiliates (2013)

20

21

22

23

24

25

26