Table Speech

Initiation Speech

April 16, 2008

Mr. Fumio Sameshima,
Mr. Ikuo Yasuda

“The Transformation of the Cement Industry”

Mr. Fumio Sameshima,
Chairman and Representative Director,

The global demand for cement is 2.3 billion tons per year. Although domestic demand has remained at about 50 million tons per year, the dramatic growth in the Asian region, with China at the center, makes cement production an overall growth industry.

 Cement is positioned as a basic material along with iron, but the cement industry has committed itself to creating a recycling-based society and to adopting environmental protection measures. The industry accepts industrial waste including desulfurized gypsum and fly ash emitted by power companies, and blast-furnace slag from steel companies, to use as raw materials.

In recent years, our company has been actively pursuing the use of industrial waste from the construction industry, and general household waste as raw materials for making cement. In terms of numbers, we take in approximately 30 million tons of industrial waste each year, which means that we use 423 kg of industrial waste as raw materials, per every 1 ton of cement produced.

An example of our initiatives in this area is the Applied Kiln System (AKS) currently at work in the company’s factory in Hidaka City, Saitama Prefecture. The AKS is based on a technology that recycles municipal waste and turns it into resources. The system, which began operation in 2002, takes all the raw garbage from the 56,000 households in the city, makes it into an odorless, quality condition, and transforms the garbage into raw materials for cement.

The AKS also contributes to reducing CO2. Operating the system itself produces some CO2, but there is a total reduction of 520 kilograms of CO2 emissions per 1 ton of municipal waste, because the existing incineration facility is no longer operated.

The cement industry bears the “original sin” of CO2 production; due to the fact that CO2 is generated during the process of extracting calcium oxide through burning limestone.

By using the environmental technologies we have developed and by improving energy efficiency, our company will work to reduce CO2 emissions as much as possible, in order to prevent further global warming. Along with these efforts, we would like to contribute to the development of a recycling-based society, as a core player in the industrial cluster.

“On the Management Philosophy of Jack Welch, Former General Electric CEO”

Mr. Ikuo Yasuda,
Chairman and CEO,Pinnacle Inc.

When the Long Term Credit Bank of Japan at which I had been employed was nationalized, I received offers from several companies, but without hesitation decided on General Electric.

The first reason for my choice was that the chief executive of GE, Jack Welch, was my hero. I wanted to learn management from Jack Welch, the greatest manager of the 20th Century.

The second reason was that credit rating of GE Capital in the 1980’s was triple-A. LTCB had also been rated triple-A. I wanted to learn why GE had been able to maintain its triple-A rating for more than 10 years, while LTCB had ended up being nationalized. I received the answer to my question after several months on the job.

What I was told by Mr. Welch was, “GE is committed to achieving double-digit growth every year. However, double-digit growth is found in the net profit of the term, not in sales. GE is only conscious of the P/L bottom line. Sales are secondary”.

Among the countless methods in Jack Welch’s management philosophy are the famous Six Sigma management system and Work Outs. He is a genius who is quick with an anecdote, and possesses unparalleled powers of retention, even remembering the names of people he has only met once.

In the opening phrase of the collection of sayings called “GE Values” it says, “GE leaders shall have unyielding integrity”. Jack Welch once told his employees, “In baseball there are three strikes, but at GE the rule is one strike and you’re out when it comes to violations of integrity”.

Recently, there have been many corporate scandals in Japan. If a spirit of compliance and integrity had been fully integrated in and accepted by Japanese corporations, I think such scandals would never have happened.

GE is the only company that has been represented continuously as a brand on the NY Stock Exchange for over a century. I think the secret for continued success lies within GE’s Values.