IwaiI joined the Company in 1983, just before Japan Monopoly Corporation became Japan Tobacco Inc. (the “incorporation”) in 1985, and I have been with the Company for over 40 years. I think the JT Group can be described succinctly as a company that is “young at heart.” Although the Company’s history stretches back for over 100 years to the founding of its predecessor, the Japanese Monopoly Bureau of the Ministry of Finance, in 1898, even after the incorporation, we did not consider the Company to be “complete,” but rather that we should continue to evolve and to learn from sources outside the Group.

During the Japan Monopoly Corporation years from 1949, the Company’s operations were strictly domestic, since it was a public entity, but my senior colleagues at the time had a strong desire to try making a global operation and to take on new businesses. With the privatization and incorporation in 1985, we evolved into a company with responsibility for its own management decisions and investments, culminating in the realization of the long-cherished wish of those senior colleagues.

TerabatakeWhen I joined the Company in 1989, it had already been incorporated, and was in the process of a major transformation in terms of internationalization and diversification. With a strong internal drive to change, we decided to start by following the path of other private corporations, aiming to use other Japanese private companies as benchmarks for our growth. Then, with a view to achieving even higher goals, the idea emerged of turning the Company into a global enterprise. This way of thinking, that we should constantly evolve and not be satisfied with the status quo, has continued to be passed down to this day.

IwaiThe Group has tended to demonstrate its true value in times of crisis and change. For example, just after the incorporation, when there was a sharp fluctuation in foreign exchange rates due to the Plaza Accord, and then in 1987 when tariffs on imported cigarettes were eliminated, competition from foreign manufacturers intensified and the Company lost share in the domestic tobacco market.

To respond to these changes in the external environment, the Company has undergone significant transformations. We do not simply respond passively; for example, looking ahead to future globalization, we have grown while deepening our knowledge of world-class technologies and business operations, such as utilizing a license contract with global cigarette brand Marlboro as an opportunity to learn about world-class tobacco manufacturing technology. I think it is this mindset of repeated transformation, taking crises not as threats but as opportunities for growth, that is part of the Group’s DNA.

TerabatakeWe have passed down the idea of looking at the consumer who will ultimately use our products and services, and developing our business freely on a global scale. Today, we retain a deeply rooted consumer-centric awareness even at the frontline level, and this, too, is part of the Group’s DNA. It is because of this mentality that we have developed a solid brand as a manufacturer, and that we are able to continue supplying excellent products to consumers. The Company has deeply rooted values that appreciate this mindset, and I think these values will continue to be passed down.

IwaiThe biggest turning point for the Group was the acquisition of U.S. company RJR Nabisco Inc.’s non-U.S. tobacco business in 1999. Before that, we had been diversifying and trying various businesses, but in many cases, we had found it difficult to succeed in fields outside our main business.

In this environment, we decided on this major acquisition because it was an opportunity to take a big leap forward in our main tobacco business, where we also had our own knowledge. This move spurred our international expansion, and we grew by establishing our own style of management while being deeply involved with local operations.

We also proceeded to select and concentrate our businesses so as to concentrate our management resources on new businesses as well. As a result, we have built the current business structure, and achieved sustainable growth.

TerabatakeSince its incorporation, the Company has grown through internationalization and diversification. Our internationalization started in earnest around 1992 with the acquisition of Manchester Tobacco Company Ltd. in the U.K. After this initial step, we accelerated our overseas tobacco business with the 1999 acquisition of RJR Nabisco Inc.’s non-U.S. tobacco business, followed by the acquisition of Gallaher Group Plc in 2007. Today, JT is considered to be a company that performed successful M&As, but at the time, we found many difficulties in the post-merger integration process, which did not all go smoothly by any means. However, viewed from a three- or five-year time line, the Group built up communication with its newly acquired members, and integrated them in an organization with the same strategic direction.

In addition, we shared our consumer-centered 4S model approach not only in Japan, but also with our new Group members, and continued investing for long-term growth rather than short-term profits. These initiatives formed the distinctive growth foundation of the Group today.

IwaiI think that ultimately the important factors are people and trust. In the initial period after the acquisition of RJR Nabisco Inc.’s non-U.S. tobacco business and founding of JT International (JTI, currently the tobacco business headquartered in Geneva, Switzerland), there were some differences of opinion between JTI and the JT head office. However, understanding each other’s strengths and setting common goals fostered a sense of unity. That is not to say that this was our clear policy from the beginning. Rather, trust was established as a result of various discussions with JTI, as the need to give JTI more autonomy emerged.

Another factor in our successful globalization was the sharing of the 4S model. The values in this model have guided us in making necessary investments, market developments, and product improvements. In particular, I believe that a common awareness of our aims to overcome quality issues and surpass our global competitors have supported the Group’s growth.

TerabatakeWe do not impose the methods of Japanese companies on our acquired companies; our policy has been to analyze their practices and discuss them extensively to adopt the best ones. This has led to an attitude of fairness to people of all backgrounds, and since 1999 we have uniformly implemented promotion based on ability.

As a result, we have created a corporate culture where all employees including those from acquired companies, are treated as members of the JT Group. Evaluations are also completely fair, and employees do not receive special treatment due to being Japanese either.

I think that it is this fairness that has created a corporate culture where employees’ trust in the Company is supported, their abilities are evaluated fairly, and they are given opportunities to grow accordingly.

TerabatakeThe Group’s greatest strength is its people. We have built a virtuous cycle in which employees work with motivation and produce results so that the individuals and the Company grow together. To realize this, we prepared systems to support people and focused on enhancing job satisfaction in the Group.

Now, we have introduced a globally integrated system for supporting the growth of our human resources, creating an environment where all employees can take on challenges equally. For example, if a position opens up at JTI, employees throughout the world, including Japan, can apply for it, and the best person is selected through a fair selection process. These kinds of systems and structures support the Group’s growth, but at the core it is ultimately people. By bringing together the motivation and skills of various employees, we have built the Group as it is today.

IwaiThe Group’s diversity has room for further improvement from a gender perspective; however, from a perspective of individuality, I feel that our Company is brimming with diversity. The Group does not suppress individuality, rather it provides an environment where people can work while utilizing their various strengths. While there are differences in the cultures of JT and JTI, I think that in this environment we have fostered an approach of accepting the differences in our culture and values, and engaging in constructive discussion to create something better.

Naturally, it is important that this diversity is utilized not for the sake of individuals, but for the sake of the team. People who are able to harmonize and also focus on the results of the team grow and become great leaders.

Iwai“Fulfilling moments” was mentioned in the New “43” Long-Term Business Plan, formulated in 1968, when JT was still Japan Monopoly Corporation. This is a value we have long preserved since then, and crystallized and set out in writing as the JT Group Purpose, “Fulfilling Moments, Enriching Life,” in 2025. This Purpose is the North Star guiding our business growth, and it is what we should always aim for. For example, our core tobacco business may not be an essential business for life, but it contributes to “fulfilling moments.” Even in a rapidly changing society, our Purpose expresses the unchanging importance of this value.

TerabatakeIn addition to what Chairperson Iwai said about the JT Group Purpose, I would like to add that it is the essential expression of the pride that our employees take in the Company.

That is why it is important that individual employees remain mindful of the JT Group Purpose as they perform their roles for society and the future. The Group is one big team of employees who love the Company, and our culture is supported by the notion that “people come first.” I value this approach and am strongly committed to continuing it faithfully going forward.

IwaiThe progress of technology is massively changing values and the social order. In an era where the value of humanity itself is being questioned, it is important to ask ourselves what it means to be human and what humanity represents.

Human beings seek not only to live, but to be fulfilled. Up until now, the Group has provided fulfilling moments centered on tobacco products, but going forward, we must examine the question of what fulfilling moments are, and look to provide that value in new ways. The value of things considered luxury items must surely be found in this.

Another word to describe “fulfilling moments” in English is “delight.” The essence of this is in a change of behavior and mind. It is more than simple pleasure; I think the important aspects of it are a feeling of fulfillment and relaxation and a positive change of mind.

TerabatakeLooking ahead, with the inevitable advances in technology, including AI, people’s lifestyles will change as society progresses, and I think we will live in a world where we will feel greater stress. In this situation, I believe our role is to focus on “fulfilling moments” and on providing moments where people can take a break and feel relief.

I myself find it important to take time to change my mind and reset my emotions. For example, rather than constantly thinking about work, I deliberately use weekends to take a break and refresh myself, which enhances my ability to concentrate. I think that creating changes for your mind and establishing a rhythm like this leads to better performance. Similarly, the Group’s value is not in simply providing services and products, but also in staying attuned to people’s minds and creating opportunities to give their minds a rest.

In order to provide society with the “fulfilling moments” described in the JT Group Purpose, we believe it is important to reliably realize sustainable growth while remaining focused on our tobacco business, and to continue generating a cycle in which employees achieve personal growth as they enjoy their work while the Company also grows.

To this end, as president, I will strive to create an environment where employees can freely challenge themselves.

Through the accumulation of these efforts, I want to guide the Group to advance daily toward a future in which it has a firmly established position as a company that provides fulfilling moments, and to evolve into a company that can achieve even further growth.

IwaiAs President Terabatake said, the Group’s role is to support a society with awareness for enriching life. For example, tobacco once had a cultural aspect in the lifestyles of the Edo period in the form of kiseru or Japanese tobacco pipe culture. However, as the times changed, tobacco has become increasingly commoditized.

Even so, I would like us to stay with our initial goal of being closely attuned to consumers’ fulfilling moments and forming a new culture. With D-LAB’s activities, diversifying businesses, and heated tobacco products, the Group aims to provide products and services that create opportunities for new cultures to emerge. It is therefore important to provide offerings that will be valued not by everyone, but by those who choose them. Through the accumulation of these activities, I hope that the Group will evolve into a company that creates new cultures in the future.

TanimotoWhile it is naturally important for companies to focus on their economic activities, I feel that corporate activities that create culture will ultimately lead to a new era of capitalism. Thank you both for the many wonderful points you have shared today.