From the archive: this was originally published in the Auguest/September issue of African Business.
Car manufacturer Toyota is well known, but Toyota Tsusho less so. We spoke to the trading subsidiary to find out more about its African operations.
Can you explain what the Toyota Tsusho division is, how it originated and its objectives?
Toyota Tsusho, established in 1948, is the sole general trading company within the Toyota Group. It has some 53,000 employees and its global network encompasses Japan, approximately 90 other countries and over 950 consolidated companies.
Since its foundation, we have been involved in the vehicle manufacturing and sales supply chain. We have been engaged in development of resources such as rare earth and lithium, offering our own unique added value.
With the evolution of vehicles and increased environmental awareness of the customer, we are working to further expand our existing strengths in the automotive sector while pursuing ecological synergies.
How do Toyota Tsusho’s objectives relate to the automotive industry?
Toyota Tsusho aims to enhance its revenue base in the automotive and mobility domain. In recent years the expectations in vehicles have expanded to include environmental measures, safety and comfort. Additional developments in the automobile industry include weight and size reduction, local procurement and other environmental changes. Consequently, it is necessary to offer business solutions that meet our customer needs in all regions and sectors.
For example, in upstream fields in the automotive domain, Toyota Tsusho was the first Japanese company to participate in a lithium resource development project, which is essential to the growth of plug-in hybrid vehicles and electric vehicles.
In midstream fields, Toyota Tsusho has been developing industrial parks to meet the needs of Japanese automobile and parts manufacturers looking to expand and develop markets overseas.
In June, you announced a $3m investment into Zambia’s agricultural sector. Can you explain the rationale behind this decision?
In February 2014, Toyota Tsusho established a social venture fund, CSV Africa. Its main aim is to support businesses that contribute to resolving challenges faced by regional communities, the creation of employment opportunities and supporting economic independence.
In late June, Toyota Tsusho invested $3m in a large-scale agricultural project in Zambia, providing employment to clear and cultivate 2,700ha of under-utilised land, constructing irrigation facilities and undertaking transportation services.
The company plans to grow wheat and corn. In addition, it will give agricultural advice to farmers in the surrounding region and help them market their crops.
A further $300,000 has been invested in a leather goods business in Ethiopia.
Is there a development agenda driving your approach to the continent?
In Africa, and particularly Kenya, Toyota Tsusho has engaged in various initiatives including automobile sales and sales finance, geothermal power plant project business, and harbour construction works.
In August, Toyota Tsusho signed a memorandum of understanding with the Kenyan government’s
VISION 2030 Delivery Board, encompassing cooperation in the automotive, electric and energy, oil and mineral resources, environmental protection and agricultural industrialisation sectors.
You opened a Toyota College in Kenya last year. Do you have other plans to support education?
In July 2014, Toyota Kenya launched the Toyota Kenya Academy as a training centre for human resources in Kenya. Until now, Toyota Kenya has its own automotive sector technicians, however it has expanded its resource development function in line with Kenya’s VISION 2030, aiming to develop the capabilities of global talent not only from within Kenya, but also from neighbouring countries.
In collaboration with JICA, Kenyan universities and governmental agencies, we will build a training system that can respond to a variety of needs, and the ongoing development of the human resources who will lead Africa in the future.
You are involved in Kenya’s geothermal and wind power sector. Are you considering expanding these operations to other African countries?
Toyota Tsusho received an order for the construction of Africa’s largest geothermal power plant project in November 2011 and held a plant opening ceremony in February this year. The total electricity output is the equivalent of some 20% of the total power generated in Kenya. The renewable energy business is one of our prime interests.