——In recent years, the scale of the trade business has continued to expand, with Tokyo’s annual sales increasing by 75% over the past five years since 2017, and Shanghai’s doubling in five years. What is the cause of this?

Mr. Lin: The reason for the 75% increase in the scale of Tokyo’s trade business over the past five years is due to deepening our existing business areas, including the chemical business, pharmaceutical raw materials, pesticides, and electronic materials. Despite the pandemic last year, all departments of the trade headquarters achieved their budgets, achieving a well-balanced overall growth. Furthermore, the performance growth in China is remarkable, with a significant doubling in five years. This is mainly due to the progress of our growth strategy, that is, the diversification of our business forms.

Mr. Long:  The development of the Shanghai branch started with the expansion of the scale of exports, which is a basic business. In other words, it has grown at an annual rate of about 10% due to the pulling effect of the expansion of business at the Tokyo headquarters. What brought about further growth was the results of the progress of the group’s growth strategy. The previous business in Shanghai was all due to exports to Tokyo. The business form was simple, focusing on the export of chemicals and OEM, and export business alone accounted for more than 80% of Shanghai’s total sales. When Mr. Hayashi visited Shanghai on a business trip 10 years ago, he advised, “You should find a new growth engine for the Chinese branch and advance the diversification of business.” This became the trigger to promote business development in a new form, such as opening up the Chinese domestic market. And after years of efforts, we achieved the growth target of diversification, and the traditional export business accounted for 40% of Shanghai’s total sales, and the remaining 60% was occupied by the sales of new businesses. The new business is not only large in scale, but also grows fast and has a high profit margin.

——HighChem is entering a new medium-term business plan period from the fiscal year 2023. Could you tell us about the future direction and goals of the entire trade department?

Mr. Lin:  The market size of chemical trade between Japan and China is about 800 billion yen, and HighChem accounts for 5% of it, making us a leading company in this field. However, the chemical trade market itself has reached saturation, and it has not grown much over the past decade or so, so we will have to take away the business of our competitors. In order for Tokyo’s trade business to further develop, we need to focus on deriving more fields based on the trade of chemicals.

The personnel and business content that we are currently strengthening are shifting to fields of products closely related to lifestyle, such as medicine, pesticides, health foods, etc., and advanced electronic materials from chemicals. The market size of these products reaches several trillion yen, and there is room for development far beyond chemicals. Our business policy must also shift from “acquiring shares in the 800 billion yen chemical market” to “acquiring opportunities in the product market of several trillion yen”. On top of that, we aim to break through 100 billion yen in sales of Tokyo’s trade business by 2030. This is not an easy goal to achieve, but I believe that HighChem has enough ability to achieve it if we have the courage to explore with our feet on the ground and act aggressively.

Mr. Long:　The goal of the Shanghai branch is to achieve a sales of 5 billion yuan by 2030. We started from traditional export business, and then developed businesses such as agency sales and domestic transactions. We will continue to maintain these businesses in the future, but it is difficult to maintain a growth rate of 10% annually with the current business model and scale, and we need to find new opportunities.

Based on the basic management philosophy and positioning of the HighChem Group, “We are the BRIDGE”, we plan to develop our business centered on “Japanese technology + Chinese market” in the future. Japanese chemical production technology has competitive advantages in many aspects such as quality and safety, and chemicals produced with it have a large demand in China. Regarding this, HighChem has been laying various groundwork for several years, and has various themes such as C1 chemical business and biodegradable material business. The most important task and function of the Shanghai branch in the future is to popularize the products produced in these businesses in the Chinese domestic market. On the other hand, we want to develop Japanese manufacturers who want to enter the Chinese market, find suitable production factories in China and collaborate, lower the market entry cost of Japanese manufacturers, and explore new business models such as agency sales of products.

——Finally, please tell us about your thoughts on global strategy and the future positioning and prospects of HighChem.

Mr. Lin: All trading companies with sales of several hundred billion yen or more are conducting global business, and it is difficult to achieve this scale with only business between Japan and China. We believe that spreading the products of both countries to the world, taking advantage of HighChem’s strengths in both countries, is a new breakthrough for the development of the entire group. Hiring personnel with backgrounds in countries other than Japan and China is also part of that plan. In recent years, we have been actively considering and implementing business development in North America, Europe, and Southeast Asia. There are cases where we have developed based on customer needs, and cases where we have independently searched for promising businesses and invested, but HighChem is steadily advancing step by step towards globalization.

We should continue to demonstrate our strengths based on our past achievements, seize opportunities with sharp senses, accurate judgment, and efficient execution, fill in the blanks, and step out towards globalization with quick and steady steps. By doing so, this will create a new value in addition to the HighChem Group's value as a "bridge between Japan and China," namely, "We are the BRIDGE."