PAST EXPERIENCE & FUTURE STRATEGY PAST EXPERIENCE & FUTURE STRATEGY

OF MITSUBISHI CORPORATIONOF MITSUBISHI CORPORATION

IN LATIN AMERICAIN LATIN AMERICA

Santiago, November 27, 2007

Use specialized functions

(Most cases) do not take risks

Receive consultant fee just for once

Upon request(Consultants are asked to examine clients’ “needs”)

Sell fragmented knowledge & know-how

As actual players in the commercial flow, SOGO SHOSHAs make the most of gained knowledge.

Use knowledge & know-how and actively involve in actual business operation

Identify potential “Needs”

Use integrated functions

Gain profits through business operation and handling goods

Take necessary risks

Sogo Shoshas….Sogo Shoshas….Sogo Shoshas….Sogo Shoshas….

Consultants….Consultants….Consultants….Consultants….

From From ClientsClients

From From ClientsClients

From Global Trader to Total Solution ProviderFrom Global Trader to Total Solution Provider The origin of Sogo Shosha Trading Company

No longer a stereo-typed image of trading company

NOW Total Solution Total Solution ProviderProviderTotal Solution Total Solution ProviderProvider

On the other hand,On the other hand,

AgencyAgency

SOGO SHOSHASOGO SHOSHASOGO SHOSHASOGO SHOSHA

(Creating efficient transport systems/ Operating logistic

facilities)

LogisticsLogistics

Sales &Sales & PurchasesPurchases

BusinessBusinessInvestmentInvestment ConsultingConsulting

ProvidingProvidingInformationInformation

OrganizationOrganizationof Businessof Business

FinanceFinance

ProcessingProcessing

(Marketing and creating sales

channels)

(Processing goods to meet consumers’

needs)

(Providing due-diligence/Advising management/Providing

solutions)

(Researching, analyzing and reporting various

information/Creating reports on regional affairs, legal issues,

market trends, etc)

(Researching and introducing new technologies)

Providing services for Providing services for trading businesstrading business

Providing services for Providing services for integrated business approachesintegrated business approaches

MC = Trading + Investment + FinanceMC = Trading + Investment + Finance

(Working with partners in creating M&A and joint ventures/Building

information networks)

(Undertaking export business in place of manufacturers and

supplier)

(Developing investment projects/Creating investment

strategies/Establishing subsidiaries and affiliated companies)

(Arranging export finance, guarantee, corporate loans,

etc)

ScreeningScreeningTechnologiesTechnologies

Origin of profit shifted from Trade Activities to Investments

MC’s Profit Structure

52%48%

Origin of Gross Profit (MC)

17%

83%

1990 2006

Consolidated Subsidiaries

MC Parent Company

7 business groups (trade with approx. 10,000 companies worldwide)

Over 200 offices around the world

More than 554 Group companies

More than 50,000 employees (parent company: 6,000)

Annual operating transactions of 20.5 trillion yen

Consolidated net income of 415.9 billion yen (2007.3)

Corporate ProfileCorporate Profile

S E C T O R S M C I N L A T I N A M E R I C A

LEG / FOODBrazil, Argentina, Chile, Colombia, Ecuador,Venezuela, Bolivia, Paraguay, Guatemala, El Salvador, Peru

CHEMICALSVenezuela, Brazil, Colombia, Chile, Peru,Argentina

METALS

Chile, Colombia, Peru, Argentina, Brazil, Venez

uela

NBIG/IT

Brazil, Chile

MACHINERY

Brazil, Argentina, Chile, Venezuela, Peru, Ecuador, Bolivia, Guatemala, El Salvador, Panama

ENERGY

Brazil, Venezuela

Period of Development

of Japan, China & Latin America

Business Obstacles in Latin AmericaBusiness Obstacles in Latin Americafor Japanese Companies in the pastfor Japanese Companies in the past

Latin America = Traditional European and American Market

Unfamiliarity with Japanese products

Distance from Japan

1950s

Strategy in Latin America in the pastStrategy in Latin America in the past

Japan = Added-Profit Trade

Import of Natural Resources from Latin America to Japan

Export of Industrial Products from Japan to Latin America

JAPAN

NATURAL RESOURCES FROM L.A.

VALUE ADDED PRODUCTS

GLOBALIZATION

1960s - 1970s AT PRESENT

IMPORTS FROM LATIN AMERICA TO JAPAN/ CHINA

Metal Resources ( Copper, Iron Ore,etc), Cotton, and Sugar

Increase of Metal and Agricultural Products

EXPORTS FROM JAPAN/CHINA TO LATIN AMERICA

Export items shifted fom heavy machinery equipment such as power plants to high-tech products

Manufacturing base shifted from Japan to other countries in Asia and Latin America

Trade between Latin America and Japan/ China Trade between Latin America and Japan/ China

%

IMPORTS TO JAPAN

-100100300500700900

110013001500

1970 1980 1990 2000Copper Iron Ore Coffee

MAIN PRODUCTS IMPORTED FROM JAPAN BY BRAZIL (share

in 2006)

Source: JETRO

10

5.2

4.3

3.4

3.3

3.1

70.7

Vehicle Parts

Bearings,Gears and Parts

Motor Vehicle Engine and Parts

Integrated Circuits

Automatic Data Processing Equip.And Accessories

Passanger Motor Vehicle

Others

COPPER

58%

42%

L.A.

Others

FROZEN ORANGE JUICE

90%

10%

L.A.

Others

RAW CHICKEN MEAT

91%

1%

8%

BrazilChileOthers

COFFEE

61%

39% L.A.Others

IRON ORE

19%

81%

L.A.Others

Trade between Latin America and JapanTrade between Latin America and Japan

MAIN IMPORT ITEMS FROM LATIN AMERICA TO JAPAN AT PRESENT

Trade between Latin America and ChinaTrade between Latin America and China

Main Products (2004) : soybean, iron, copper, wood and woodpulp

05

10152025303540

1999 2006

US

$ b

illi

on

1.8%

4.3%

TOTAL IMPORTS FROM L.A. TO CHINA TOTAL EXPORTS FROM CHINA TO L.A.

05

10152025303540

1999 2006

US

$ b

illio

n

Main Products (2004): electrical appliances, woven and knit apparel , computers, machinery

2.7%

3.7%

Source: MOFCOM

Mitsubishi Corporation’s

Strategy for the Future

The BRICs+VISTA Era

Business Post-World War IIBusiness Post-World War II

1927 Foundation of Tozan Farm in Brazil

1954 Restart of Mitsubishi Corporation

Offices open in Buenos Aires and São Paulo

1955 　　 Offices open in Rio and Santiago

1956 　　 Office opens in Lima

1957 　　 Office opens in Caracas

1958 　　 Office opens in Bogota

1970s 　 Japanese imports create growth in L.A.

1980 Decrease of Business in L.A. offices

1990 Decrease of Investment in Latin America

2000 Increase of Trade, Finance, and Investment

in Latin America

2005 Introduction of Regional CEO for L.A. System

1945 End of World War II

Postwar Reconstruction

Period

1960s & 1970s

High -Growth Period

1980s The Lost Decade in Latin America

Debt Crisis in 1982 Brazil declares Moratorium in 1987

1990s Structural Recession in Japan

Rebuilding of Relationship between Japan and L.A.

2000 L.A. in spotlight again

Recovery of Japanese economy and growing export of natural resources from L.A..

Keyword Keyword 「Ｌ－Ａ－Ｔ－Ｉ－Ｎ－「Ｌ－Ａ－Ｔ－Ｉ－Ｎ－AA 」」

「「 LL 」・・・ 」・・・ LogisticsLogistics

「「 AA 」・・・ 」・・・ AgricultureAgriculture

「「 TT 」・・・ 」・・・ Trade with Other RegionsTrade with Other Regions

「「 II 」・・」・・・ ・ InvestmentInvestment

「「 NN 」・・・ 」・・・ Natural Resources & National StaffNatural Resources & National Staff

「「 AA 」・・・ 」・・・ Alliance with Local PartnersAlliance with Local Partners

Investments to Secure ResourcesInvestments to Secure Resources

Copper, Iron Ore, Methanol, Agriculture, and Fishery

Development in the Cerrado region

SALMON CULTURE - Chile

DEVELOPMENT OF

THE CERRADO - Brazil

ANTAMINA COPPER MINE- Peru

METOR - Venezuela

PRODUCTION

1986- 1,100 Tons

2006- 650,000 Tons

METHANOL PRODUCTION

TURNOVER (2006)

USD 246 M

SOYBEAN PRODUCTION IN BRAZIL

2005- 51M Tons

Doubled in 10 years

LARGEST COPPER MINE IN PERU

PRODUCTION

2007 Estimation

380,000 Tons

FinanceFinance

Export-Import Financing, Project Financing, Corporate Financing, etc

PRA-1 PLATFORM

BRAZIL

US$ 910 MM Structured Finance based on the JBIC Overseas Investment Loan and a Syndicated Loan by 12 Commercial Banks arranged by Mitsubishi Corporation in 2

005

CENTRAL COSTANERA

ARGENTINA

Contract Price: USD 240 M

SUPPLIERS CREDIT

Finance : USD 190 M

COSIPA HSM Revamp Project

BRAZIL

CORPORATE FINANCING(MC’s Own Finance)

Loan Amount: US$13,5 M

Grace Period: 2.5 yrsTenor: 6 yrs

Manufacturing Bases in Latin AmericaManufacturing Bases in Latin America

Steel Products and Machinery (Automobiles, Boilers, etc)

RIO NEGROSteel Processing

MITSUBISHI MOTORS

CBCBoilers

NEWSPAPER ARTICLE OF THE EVENT TO CELEBRATE CDM PROJECT- Chile

IT COMPANIES - Brazil

Japanese Digital TV standard - Brazil

ITF’s MITAKA ComandCenter

POLITECTechnical Center

Brazil = Daytime Japan= Nighttime

Market Expansion in Latin AmericaMarket Expansion in Latin America IT, CDM, Partnering with Japanese Technology (Digital TV, etc)

MC’s Global Activity ExpansionMC’s Global Activity Expansion

Chile => Strategic Partners ( CAP, Luksic, Sigdo Koppers)

Export of Chinese Industrial Products to Latin America(Ex: Steel Manufacturing Equipment)

Export of Food Products from Latin America

Bioenergy

Infrastructure (Ex: Panama Canal)

COFFEE

INVESTMENT

CHINALATIN

AMERICA

JAPAN

Example of New Business : L.A., China and JapanExample of New Business : L.A., China and Japan

MC’s REGIONAL AID PROGRAM: ECOTOURISM PROJECT IN IBERA,

ARGENTINA

MC’s REGIONAL AID PROGRAM:

INTERNATIONAL SCHOLARSHIP PROGRAM- UNIVERSIDAD DE ORIENTE - VENEZUELA

MC’s REGIONAL AID PROGRAM:

PATROL CARS FOR THE NATIONAL FOREST INSTITUTE -NICARAGUA

TOZAN FARM - BRAZIL

MC’s Commitment in Latin AmericaMC’s Commitment in Latin America