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In addition to its traditional trading business with leading Korean companies, Mitsubishi Corporation (Korea) Ltd. (MCK) is also fostering new business. One example is a Clean Development Mechanism (CDM) project to reduce nitrous oxide (N2O) at a nitric acid plant operated by the Hanwha Group. One of Korea's leading conglomerates, Hanwha is also a client of MCK's Chemicals Business Division.
With support from Mitsubishi Corporation (MC)'s Emissions Reduction Business Unit, MCK first approached Hanwha about the project three years ago. Although we faced competition from several other companies, we were awarded the contract because Hanwha appreciated our comprehensive proposal, which covered project consulting, registration procedures with the UN and the installation of N2O reduction facilities utilizing Japanese technology. Furthermore, thanks to strong coordination between the Emission Reduction Business Unit and MCK's Chemicals and Machinery Business Divisions and administrative departments, we were able to take on risk and invest in the facilities, and this became a key factor in the project's success.
The plant began operations last year. Over the next five and a half years, through to the expiration of the Kyoto Protocol, the plant is expected to secure emissions credits of more than 1.5 million tons. We are now moving ahead with procedures to secure UN approval for the project, while also working to identify new CDM projects.
MCK is developing new business with Daiyang Metal Co., one of Korea's leading specialty manufacturers of high gloss, cold rolled steel. MCK has enjoyed ties with Daiyang since it was founded some 30 years ago, supplying Daiyang with stainless hot rolled steel from Japanese manufacturers. Because of increasing cost-competition and trade barriers, Daiyang began to consider plans for overseas expansion and MCK responded by extending the full support of the MC Group to Daiyang.
Daiyang proceeded to establish a plant in Turkey. As the plant is located inside the Europe Free Zone, Daiyang can look to expand sales across Europe. Fully utilizing the channels of the MC Group, MC is marketing the plant's products in Turkey and countries across Europe, as well as in the Middle East, Russia and other regions. The MC Group is also cooperating to procure raw materials for the plant from Japan and Europe. In this way, we are expanding business through the extensive network of contacts that reach across the MC Group.
In the years ahead, the Metals Business Division will look to bolster the development of new business by supporting the global expansion of leading Korean companies, with which MCK has forged strong ties over the years.
MCK became a local subsidiary in 1999, but its roots date back to 1963, when the Seoul Liaison Office was established ahead of the normalization of Korea-Japan relations. MC's Seoul Branch was subsequently established in 1967. Today, companies like POSCO, SK and Hyundai Motors have emerged as leading global companies, and MC has enjoyed ties with these companies since the days when they were founded—I think this represents a valuable asset for MCK. MCK's business has evolved in step with the development of the Korean economy. Not only focusing on trade between Korea and Japan, MCK has also been expanding its business with China and ASEAN countries. Indeed, today there are many global business opportunities through which MCK can leverage MC's network, and I think we can look forward to seeing great things from MCK in the future.
I understand that Korea is also grappling with some big challenges, such as a sluggish domestic economy and a growing gap between wealthy and poor. In February, Lee Myung-bak became the president of South Korea and Koreans are looking to their new “CEO President” to find solutions to these problems. There are also expectations for new progress on the Korea-Japan Free Trade Agreement, and I think MCK will continue to find increasing opportunities to shine in the years ahead.
More and more Koreans are visiting Japan these days. Last year, the number of Korean visitors to Japan even surpassed the number of Japanese visitors to Korea. In Korea today, there are many signs of exchange with Japan—it seems like izakaya (Japanese-style pubs) and Japanese ramen shops can be found on every corner. I feel there is a growing understanding of Japan at the grassroots level.
In these times of great change for Korea and Korea-Japan relations, I hope to leverage the tangible and intangible assets cultivated by MCK over the years to foster and grow our business startups, and while also sowing some new business seeds of my own, I'd like to see MCK lead the way in generating new business.
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