Mitsui & Co.

Origins

Mitsui & Co. originated in 1876 when the Mitsui group took over Kaoru Inoue's trading house Senshu Gaisha (先収会社) and appointed Takashi Masuda as manager. Early contracts included a lucrative commission monopoly to market coal from Miike mine, and the firm opened its first overseas office in Shanghai later in 1876 to handle exports. By the mid Meiji period Mitsui & Co. had broadened into rice, tea and raw silk exports, and the import of industrial machinery.

Expansion in textile and machinery

As industrial capitalism rapidly progressed around the Sino-Japanese and Russo-Japanese Wars, Mitsui & Co. integrated cotton and silk into its core trading lines and expanded overseas markets in East Asia.

By the early 1910s Mitsui Bussan exported over 20% of Japan’s total raw silk and had become the largest silk exporter domestically and internationally; silk already exceeded 10% of the company’s total trade by that time. The First World War drove a surge in scale: sales rose from c.¥400m pre-war to ¥2.1bn in 1919, with more than 1,000 types of items handled.

Siemens–Vickers scandal

In 1914, the Siemens scandal exposed bribery in naval procurement. The scandal started when it was revealed that Siemens bribed naval officers to win contracts for naval equipment from the Imperial Navy. This led to a large-scale investigation across the navy, and it was eventually exposed that the British builder Vickers and its Japanese agent Mitsui & Co. bribed Naval Officers to win the contract for the battlecruiser Kongō, the last Japanese battleship to be built abroad. Court records and scholarship identify testimony from Mitsui & Co. directors in relation to the Kongō order. The affair triggered the fall of the Yamamoto cabinet.

Dissolution and reformation

SCAP (Supreme Commander for the Allied Powers)'s 3 July 1947 directive ordered the dissolution of Mitsubishi and Mitsui trading companies via the Holding Company Liquidation Commission (HCLC). Mitsui Honsha (the holding company of the entire group) itself was wound up in 1946 as part of the same programme. Mitsui's businesses were split among a few successor companies established by its employees. Daiichi Bussan Kaisha, Ltd. (First Bussan Corporation Ltd.) was one of the major ones among them. In 1959, after the end of the Allied Occupation, it merged with several other trading companies also descended from the pre-war Mitsui & Co. and reassumed the name Mitsui & Co., Ltd.

Post-war growth

During Japan's period of rapid postwar economic growth, the firm was a key player in several major natural resources projects. In 1971, it took a stake in an offshore gas field near Das Island in Abu Dhabi, which supplies liquefied natural gas to Japan on an exclusive basis; it invested in a major Western Australian LNG project in 1985 and in the Sakhalin II project in 1994.

Its subsidiary Mitsui Oil Exploration's MOEX Offshore had a 10% stake in the Deepwater Horizon well in the Gulf of Mexico through a subsidiary, and in May 2011, MOEX agreed to pay US$1.07 billion to settle BP claims against it over the explosion and oil spill at the well. Some analysts had thought BP would realize a larger settlement from MOEX, but there was also relief to have a first step toward resolving the multiple claims.

Berkshire Hathaway acquired over 5% of the stock in the company, along with four other Japanese trading houses, over the 12-month period ending in August 2020.

Mitsui engages in six major business areas:

Energy: Upstream development and trading in oil and gas, the firm's's largest line of business, accounting for over half of its consolidated EBITDA and net earnings in the first half of fiscal year 2015. Mitsui has two major energy projects in the United States, at the Marcellus Shale in the Mid-Atlantic and the Eagle Ford Shale in Texas.

Metals: Development and trading with a focus on iron ore and steel. This business accounts for about a quarter of consolidated EBITDA and net earnings. In 2014 Mitsui acquired a stake in the Moatize coal mine and Nacala rail and port development in Mozambique from the Brazilian mining company Vale.

Chemicals: basic and performance chemicals including fertilizers, electronics materials and functional materials.

Criticism

Mitsui & Co. has faced criticism for continuing its operations in Russia despite the Russian invasion of Ukraine and the imposition of international sanctions. The Japanese trading giant has maintained its stake in the Sakhalin-2 liquefied natural gas (LNG) project, citing the need to ensure energy supplies to Japan. Mitsui holds a combined 22.5% share in the project, which remains operational under Russian control following the Kremlin's restructuring. Although the company has reduced the book value of its investments due to "growing business uncertainty," it has not fully withdrawn, unlike some Western companies. Mitsui also retains a 10% share in Novatek's Arctic LNG-2 project, despite Japan freezing new investments in the initiative. Critics argue that Mitsui's continued involvement undermines the global effort to isolate Russia economically, indirectly supporting a regime responsible for ongoing war crimes and atrocities in Ukraine.