Exclusive Interview with
SCAO Group CEO Mr Keigo Shiomi
It’s been one year of Covid-19. There has been no sign of abating as the pandemic continues to rage on especially in our regional countries. Against this backdrop, where is SCAO group today versus where you thought it would have been 2 years ago when you first came?
The last 2 years have been one of the most unforgettable moments in my life since I joined Sumitomo in 1985. Many things took place and I suppose many of you share the same sentiment.
The current position of the company is totally different from where it was about 2 years ago. The Profit after Tax (PAT) of SC Group was at its record high of close to USD 3 billion in 2017/2018 amidst positive market conditions. I personally think that we might have been complacent with the good results and overlooked the need for swift actions to divest non-profitable businesses or restructure problematic businesses. In 2019, even before the Covid-19 pandemic, we gradually uncovered weaknesses or issues. Then in 2020, against the backdrop of Covid-19, we recognised the need to resolve those issues quickly to survive. That marked a critical turning point for us.
Our future depends on how well we execute SHIFT2023, our mid-term management plan. As a regional organisation, and with the concept of joint & several responsibility that was established about 4 to 5 years ago, we have to fulfil our mission faithfully. We have been having various discussions to clarify our function and mission under the structural reforms outlined in SHIFT2023, not forgetting there are still many opportunities out there especially in energy innovation, agriculture, healthcare, retail/consumer and social infrastructure. These are the 5 next generation fields we should focus on. Let’s pursue the most efficient and effective way to achieve our goals. In the same light, I would like to ask all staff of SCAO group to think about your role and mission under SHIFT2023. Each office should set clear company targets that translate into clear individual targets so that all of us are aligned.
Climate change, D&I and DX are one of the biggest buzzwords in the business community today. As we execute the new mid-term management plan SHIFT2023, what “SHIFT” in mindset or behaviour do you expect SCAO group to adopt in these 3 areas?
Climate change, D&I and DX are indeed 3 critical areas that businesses are tackling spontaneously these days. It may take some time before we see results from our efforts in these 3 areas. However we must be wary that the speed of change has accelerated beyond our expectation and hence, more intensive efforts are necessary to ensure our continued business growth and success.
Firstly on climate change, a new organisation has been established at the headquarter, named the Energy Innovation Initiative (EII). The next generation energy business will be developed under this organisation. At SCAO group, our regional Business Development Unit headed by Mr Sawada will be working closely with EII. Climate change has a big impact on us, particularly our coal and power businesses. These businesses continue to generate good profits but in the meantime, we have to seriously and gradually shift them to new energy businesses. Each country in our region is on a different developmental stage, so for some countries, it may take a longer time to shift totally to new energy such as hydrogen because it will be very costly. Suitable processes or approach should be tailored to each country’s situation. It is going to be a huge challenge but certainly a worthwhile one. We must contribute to sustainable development.
Secondly on D&I, needless to say, people are our most important assets. Over the last 2 years, we have accelerated our D&I efforts from employee survey to setting up D&I goals, targets and action plan. So by now, I believe all SCAO group employees understand how important it is for us. In D&I, having the right mindset is critical to our success. Changing mindsets requires time and efforts. We have to be consciously aware and remind ourselves repeatedly. I want to see efforts. Of course, there are things that we can change immediately while some require a longer time. But what I can assure you is that the direction will not change in the future, even 10 years, 20 years or longer years down the road. This is the company’s commitment.
Thirdly on DX, Sumitomo Corporation is regarded as one of the most active DX companies in Japan, having been selected as a Digital Transformation Stock (DX Stock) 2020 by the Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE). Several years ago, DX Center at the headquarter was established and many staff were moved to this new organisation from various departments to promote DX activities in SC Group. In 2019, we established DX Center here in SCAO Singapore. So far we have not achieved anything substantial in this field but we believe people are gradually adopting a DX mindset. Now many DX projects are actually ongoing, as global SC group, including SCAO. In SHIFT2023, it is time to achieve more.
Be it climate change, D&I or DX, they are all SC Group commitment. We must all work hard together to achieve better outcome, for ourselves, for the company, for the world.
What is the biggest challenge you have faced in your career? How did you overcome it and what did you learn from it?
My biggest challenge in the past was “being challenged by subordinates”. It happened about more than 10 years ago in 2009 when I was in charge of aluminium business at the headquarter as General Manager. We were looking to invest in good aluminum smelting projects worldwide. Mr Kwek and Rick from Singapore recommended that we consider working with Press Metal in Malaysia using Chinese technology against the backdrop of a booming aluminium smelting economy in China. At that time, I did not know much about Press Metal. Neither did I trust that emerging Chinese technologies would be reliable. Hence I was very resistant since Press Metal did not have any experience building a new aluminum smelter themselves, not to mention they just acquired and operated a very old and small Chinese smelter in China. I anticipated the top management would not approve it. In my mind, I always thought we should be working with big western names like Alcan, Alcoa, BHP and so forth, a common understanding among trading houses. However unfortunately big players did not need our participation. While we struggled to find good projects, several subordinates from Japan to Singapore continued to persuade me. On one faithful day, as we were having a discussion about it, some of them questioned my judgement which was based on my past experience without proper assessment of the value Press Metal project could bring. They were very frank and forthcoming, to the extent of saying I was too rigid and unable to catch up with change. I felt like I was struck by lightning!
Thankfully, those guys did not give up. They continued to persevere and negotiate with me by presenting convincing data and solutions to overcoming challenges. Finally I caved in, though reluctantly. Not only that, we obtained approval from the management to proceed. It took a long but meaningful time. Today, we have been reaping fruits from the seeds we sowed. Press Metal has been extremely aggressive in business expansion, sometimes so aggressive that we cannot catch up because of our comparatively slow decision making process. When we are talking about now, they are already considering the next. Anyway those were truly enlightening moments. Phase 3 of the project was completed recently. The updated production scale is 1 million tons, almost 5 times that of the initial scale. Though we face various production problems and low market price from time to time, this project has never been in the red and has been contributing well to the company’s bottom line, all thanks to our people’s hard work.
Moral of the story: Diversity and Inclusion! I learnt that I should always listen to other people’s opinions without bias or prejudice, including my subordinates’. I should not stick to what I know or experienced because nothing stays the same forever. Being open, positive and willing to challenge – this is how we can drive possibilities.
With my colleagues in 1986, the first fiscal year when I joined Sumitomo.
Could you spot me, and Mr Kitagawa of SABDO Singapore?
Visited Worsley Alumina in Australia in May 2019
On a fishing trip with “SCAO Fishing Team” in Singapore in 2019 before COVID-19
I love mountain trekking! At the foot of a mountain in Japan
I love mountain trekking! At the foot of a mountain in Japan