Mr. Jun Karube
President & Chief Executive Officer of Toyota Tsusho
Toyota Tsusho, a long time African partner reinforces its investment in Africa by buying out CFAO. JAPAN and the WORLD sat down with President & Chief Executive Officer Mr. Jun Karube to understand Toyota Tsusho activities in Africa.
—Toyota Tsusho is a massive trading organization with many subsidiaries that operate in a variety of sectors. How does the company decide which sectors to expand to?
We started as the sole trading company in the Toyota Group. At first, because of our associations with Toyota, our business focused almost on automobiles. When Toyota began their operations overseas, we became involved in businesses related to automobile production, such as steel blanking for materials used in automobile bodies, the procurement of parts, and logistics, as well as sales in countries and regions where Toyota was not operating.
We are concentrating our efforts in business areas that have significant social needs and much growth potential and in which we can utilize our strengths and experience, such as renewable energy and business in Africa.
On the occasion of our merger with the Japanese general trading company Tomen in 2006, we endeavored to further stabilize our management by expanding to non-automotive business sectors. We are concentrating our efforts in business areas that have significant social needs and much growth potential and in which we can utilize our strengths and experience, such as renewable energy and business in Africa. At present we are aiming to develop three business domains:
- Mobility (contributing to a convenient future society)
- Resources and environment (contributing to a sustainable society)
- Life and community (contributing to a comfortable and healthy society)
—Why and when did Toyota Tsusho decide to buy the French company CFAO?
In 1964, we began exporting finished automobiles from Japan to Kenya. Since then we have developed the automobile distribution and sales networks in English-speaking countries in the south and east of the continent, but we hadn’t been able to reach out to French-speaking countries in the north and west. In order to reach into the French-speaking countries, we thought that an alliance with a French company was essential. Broadly speaking, there were three reasons why, among many other French companies with operations in Africa, we selected CFAO as a partner.
First, CFAO has an extremely high degree of consistency with Toyota Tsusho’s strategy. In the same way that we have set three business domains, CFAO also is promoting the three growth areas of equipment and services, healthcare, and consumer goods as its “Three Pillar Strategy.” While maintaining the automobile-related business as their core business, both Toyota Tsusho and CFAO are expanding the strengths that they have fostered in the automotive business into two other areas and are building and consolidating new pillars. So the first reason was that CFAO’s vision and strategy relating to its business coincided with our own.
Second, Toyota Tsusho operates in 30 countries in the south and east and CFAO in 35 countries in the north and west, so there was a high degree of regional complementarity with limited overlap at all. By forming an alliance, we were able to cover 53 of the 54 countries in Africa.
The third reason was human resources. CFAO has an abundance of human resources with an excellent knowledge of Africa. It has a long history of involvement in Africa, and more than 10,000 of its employees are engaged in African business. Of them, around 300 French people are stationed on the continent. They are “Africa professionals” with plenty of experience of doing business in two or three African countries. By bringing them on board, I thought we were going to be able to further accelerate our business in Africa.
—Toyota Tsusho has worked to develop strong partnerships with Kenya and has heavily invested in the country. In what ways does Toyota Tsusho’s Global Vision align with Kenya’s Vision 2030?
Vision 2030 is a medium- to long-term development plan compiled by the Kenyan government with the aims of improving people’s incomes and raising living standards. It consists of three pillars: political, social, and economic. On the political side, it calls for the establishment of a new political system and consolidation of the central and regional governments. On the social side, projects are being advanced to ensure clean water, electricity, and housing, to maintain the people’s health, and to direct efforts toward education. On the economic side, the plan designates several sectors and is promoting flagship projects with private companies in each sector.
Vision 2030 is a medium- to long-term development plan compiled by the Kenyan government with the aims of improving people’s incomes and raising living standards.
Toyota Tsusho is collaborating in five business fields:
- Power and energy infrastructure
- Petroleum and mineral resources
- Automotive business
- Agricultural industrialization
- Environmental conservations
Having engaged in business in Kenya for more than half a century since we started exporting finished automobiles there in 1964, we have a solid business foundation in Kenya and a wealth of experience and knowledge. I believe that the Kenyan Government’s positive evaluation of our track record so far, built up especially in the automotive field, led to the conclusion of a memorandum of understanding.
Another factor, I think, is that Toyota Tsusho’s managerial vision is in line with the direction of Kenya’s Vision 2030. For example, the project to construct geothermal power generation plants in Olkaria, which were completed in 2015, has the purpose of making effective use of renewable energy, which conforms to our priority business domain of resources and environment.
—How does Toyota Tsusho intend to invest in and cooperate with African companies and people going forward?
Although some resource-rich countries at present are experiencing economic slowdowns, in view of the increase in population and substantial rise of the middle class, it can be expected without doubt that Africa will achieve significant economic growth in the future.
From a long-term perspective, Toyota Tsusho is going to create synergy with CFAO and, as well as B2B, will aim to develop B2C targeting the African middle class, which is going to expand rapidly from now on. Furthermore, rather than providing assistance to Africa, we want to grow together through business.
One concrete example is a project being undertaken jointly by CFAO and Carrefour, the world’s number-two retailer. Under this project, a shopping center, including a hypermarket, opened in Abidjan, Côte d’Ivoire in December 2015. This center is contributing to the sale of local agricultural products and the creation of jobs. Shopping malls, both medium-sized and small, are scheduled to be built in eight West African countries from now on, and the aim is to open 80 sites by 2020.
In addition, Heineken and CFAO have established a joint venture in Cote d’Ivoire, called Brassivoire, which at present is constructing a factory with the aim of producing and selling beer in that country.