Company history

The Sumitomo zaibatsu deliberately kept no trading house. In 1920 its chief director Masaya Suzuki issued a “declaration forbidding the founding of a trading company,” and for twenty-five years Sumitomo stayed out of the trade, honouring the house creed of “chasing no easy profit” while Mitsui built Mitsui & Co. and Mitsubishi built Mitsubishi Corporation into full sogo shosha. Oddly, the legal entity that became Sumitomo Corporation was not a trader at all but a property company — Osaka Hokko, founded in 1919 to build and run the north Osaka port, later renamed Sumitomo Tochi Kogyo and grown into a full-service real-estate firm.

The taboo held until August 1945. With the war’s end wiping out military demand, the general director Furuta Shunnosuke reluctantly lifted the ban to secure a livelihood for demobilized employees. As the Sumitomo head office was dissolved under the zaibatsu break-up, the property company took over the sales operations of the group firms and re-launched that November as a trading house, Nihon Kensetsu Sangyo, under its first president Shunya Taji, a former Sumitomo Metal Industries executive. Alone among Japan’s postwar sogo shosha, Sumitomo’s trading arm was born out of real estate.

It listed on the Osaka and Tokyo exchanges in 1949, spun off its design arm as Nikken Sekkei in 1950, and in 1952 renamed itself Sumitomo Corporation. Its job was to sell for group firms such as Sumitomo Metal Industries and Sumitomo Metal Mining, so its book leaned heavily toward steel and non-ferrous metals — the industry nicknamed it the “kin-hen” (metal-radical) house. A 1962 commodity-division structure began to broaden it, and by the late 1960s metals had eased to about half the book as machinery, fuels, chemicals and foods grew and turnover reached roughly ¥790 billion. But the metal-heavy shape, and a reputation as a “faceless” house tied to no distinctive franchise, would define it for years.

On taking the presidency in 1981, Mitsuo Uemura laid down the rule that would define the company: there was “no need whatever to chase flashy mega-projects,” and “as a principle we do not touch any project that runs longer than ten years.” While Mitsubishi Corporation poured into Brunei LNG and Mitsui & Co. into the Iranian IJPC petrochemical venture that would later swallow vast losses, Sumitomo alone sat out the big overseas plays. The restraint paid off — it grew sales 27% in the year to March 1981 and led the industry on ordinary-profit margin — and for roughly twenty years, while rivals were whipped about by risks coming due, this “take no risk” posture was itself Sumitomo’s edge. It still expanded beyond metals (leasing from 1963, IT services from 1969, Mazda auto sales in North America from 1975, cable TV in 1995) but never the decade-long mega-project. The capital it quietly banked in those years would matter enormously later.

It mattered in 1996. That June it emerged that Yasuo Hamanaka — the non-ferrous chief the market called “Mr. Copper,” said to move 5% of world copper — had run about a decade of off-book trades on the London Metal Exchange. Sumitomo booked a $2.4B (¥285bn) copper charge in the year to March 1997 and fell to a net loss, yet the prudent cushion held: equity fell only from 13.2% to 10.3% of assets, well short of insolvency. President Kenji Miyahara put full cooperation with the US and UK authorities — and the preservation of international credit — ahead of merely filling the hole, mindful of how a rival bank’s cover-up had poisoned its standing abroad. The legacy of caution had absorbed a rogue trader’s loss.

The deeper shift was already under way. In 1988 Sumitomo unveiled a “comprehensive business company” concept — a move from earning trading commissions to putting capital into businesses and being rewarded for raising their value. Strategy plans followed, a “9 divisions, 28 units” reorganization came in 2001, and in 2011 it would fold Sumisho Computer together with the troubled CSK to form SCSK, taking a 48% stake. Redefining the trading house as an investor set its course for the decade to come — and for the resource bet that lay beyond.

In 2005 Sumitomo crossed the very line Uemura had drawn. It committed to the Ambatovy nickel project in Madagascar at 47.7%, alongside Sherritt of Canada and Korea Resources; its own outlay topped $2.4B (¥260bn), and the project’s total cost ballooned from an initial $3.7 billion to $7.2 billion. This was the late entrant trying to leap over its disadvantage by plunging into resources — precisely the decade-plus mega-project the old rule had forbidden.

It kept going: a 30% stake in Brazil’s Usiminas iron ore for about $1.9B (¥170bn) in 2010, and $1.365 billion for 30% of a Texas tight-oil play from Devon Energy in 2012, as 2000s commodity prices climbed and rival trading houses booked record resource profits. Management hated being the odd one out. The house synonymous with caution had turned itself into an aggressive resource player.

The reckoning came with the 2014 price slide. In the year to March 2015, impairments across US tight oil, Brazilian iron ore and US shale gas totalled $2.6B (¥310bn), tipping the company to a net loss — larger than the 1996 copper loss, and the biggest financial blow in its history. Ambatovy then bled a cumulative $1.9B (¥266bn) of impairments from FY2015 to FY2023, a 2020 COVID shutdown forcing Sumitomo to buy more of the project when Sherritt faltered. Less than a decade after discarding its prudence, Sumitomo had spent the cushion twenty prudent years had built — and, ironically, proved Uemura right.

The resource reckoning pushed Sumitomo into its second structural remaking. Under Shingo Ueno, president and CEO since 2023, the company is shifting its centre of gravity from resources to digital: it created a new Digital & AI group bundling SCSK and Net One Systems, and in 2025 announced it would take SCSK fully private for about $5.9B (¥880bn) — completing the arc from the 48% stake taken in 2011. It wound down the Madagascar nickel impairments and reorganized the whole portfolio into a six-group structure.

Alongside, it acquired a US aircraft-leasing company for roughly $2.0B (¥300bn) and sold its 50% stake in Vietnam’s Van Phong coal-fired power plant — trimming carbon-heavy assets while adding fee-earning ones. The late-born trading house, having twice learned that its edge and its undoing spring from the same disposition, has entered its second reinvention.