Itochu Corporation Africa Strategy (May 2026)

Introduction: Itochu's Africa Strategy Focuses on the 'Downstream'

Itochu Corporation's corporate philosophy is 'Sampo-yoshi' (Good for the seller, good for the buyer, good for society), and its management policy is 'The Brand-new Deal: Profit Lies Downstream'. Distinguishing itself from Mitsubishi Corporation and Mitsui & Co., which earn profits in the upstream (resources and raw materials), Itochu maintains a strategy of capturing margins in the downstream (food, textiles, consumer goods, and logistics) closer to the consumer.

This 'downstream philosophy' is also consistent in Africa. While Mitsubishi Corporation focuses on the upstream with Olam (agricultural raw material collection), Sumitomo Corporation secures the midstream with Safaricom Ethiopia (telecommunications infrastructure), and Marubeni builds a downstream bridgehead with Phillips Pharma (pharmaceutical distribution), Itochu makes the areas 'closest to daily life'—textiles, food, and logistics—the source of its competitive advantage.

Itochu's expansion into Africa has a history of approximately 88 years, beginning with the establishment of a representative office in Mombasa, Kenya, in 1938. During that time, it started with the trade of textile products and daily necessities, and although it leaned toward infrastructure and resources for a period, it has returned to the 'downstream' and 'direct-to-consumer' approach since the 2010s.

A notable recent development is the Strategic Cooperation MOU for Sub-Saharan Africa with DP World (one of the world's largest port and logistics companies, headquartered in the UAE) concluded at TICAD9 in August 2025. DP World possesses a massive logistics platform that includes its subsidiary, Imperial Logistics in Africa. A 'logistics network to deliver Japanese products to Africa' and a 'wholesale business for daily necessities and food'—this direct-to-downstream strategy is the core of Itochu's Africa strategy in the 2020s.

Chapter 1 History: The Trajectory of Expansion into Africa (1938–Present)

1-1 Pre-war to Post-war Dawn Period (1938–1969)

1938: Itochu Corporation (the successor to Itochu Gomei before the war) established a representative office in Mombasa, Republic of Kenya (East Africa). This was Itochu's first base in Africa and the starting point of its 88-year history. Mombasa is Kenya's largest port city facing the Indian Ocean and a key hub for East African trade. From here, Itochu developed trade along the East African coast.

1960s:

• Around 1960–: Engaged in trading textile products, sandals, and daily necessities throughout Sub-Saharan Africa. Itochu was originally a 'textile trading company' that started with the wholesale of hemp cloth, and textile exports were its first business in Africa as well.

• 1961: Opened an official office in Kenya (Nairobi).

• 1962: Established a joint venture, 'Galvanizing Industries Ltd.', for manufacturing galvanized iron sheets in the Federal Republic of Nigeria (West Africa). An early entry into manufacturing through local production of construction materials.

1-2 Business Expansion Period (1970–1996)

1970s–: Expanded the scope of business throughout Sub-Saharan Africa.

• Export of telecommunications equipment, plants, automobiles, etc. (from upstream to midstream)

• Food trading of sugar, coffee, cocoa, sesame, pulp, etc. (from Africa to Japan and Asia)

Around 1974: Entered the Federal Democratic Republic of Ethiopia (East Africa). Started truck sales and sesame/coffee trading (the foundation for later Ethiopian textile and agricultural businesses).

1976: Opened an office in Accra, Republic of Ghana (West Africa). Strengthened expansion into West Africa.

1980: Participated in an automobile assembly business in the Republic of Zimbabwe (Southern Africa). One of the examples of entry into manufacturing in Africa.

1-3 South African Subsidiary Establishment and Resource Entry Period (1997–2009)

1997: Established the local subsidiary 'ITOCHU South Africa' in the Republic of South Africa (Southern Africa). In the same year, a joint venture for construction machinery was also established in South Africa, creating a system to respond to resource and construction demand.

2007: Acquired interests in natural gas development in the Republic of Namibia (Southern Africa). Entry into natural gas resources buried in northern Namibia.

2009: ITOCHU Corporation launched the CSR/MOTTAINAI campaign for Africa. Implemented initiatives linking support for Wangari Maathai's (Nobel Peace Prize laureate) Green Belt Movement (tree-planting activities in Kenya) with chaku-uta (ringtone) distribution. Promoted the stance toward a 'recycling-oriented society' from an early stage.

1-4 Resource and Renewable Energy Entry Period (2010–2016)

2010:

• Participated in a uranium development project in the Republic of Namibia. Namibia is one of the world's leading uranium-producing countries, and the interest was acquired from the perspective of securing raw materials for nuclear energy.

• Participated in a Platinum Group Metals (PGM) mining project in the Republic of South Africa. Joint venture with Canada's Ivanplats (now Ivanhoe Mines) and the Japan Organization for Metals and Energy Security (JOGMEC). South Africa is the world's largest producer of platinum and palladium.

2012:

• Norwegian-based Scatec Solar, in which ITOCHU holds a 37.5% stake, launched a solar power generation project (75MW) in South Africa. Participation in the South African government's Renewable Energy Independent Power Producer Procurement Programme (REIPPP).

• Subsequently, won an order for a 115MW solar power project, one of the largest in Africa, and concluded a 20-year power purchase agreement with the state-owned utility Eskom (aiming for the start of operations around the end of 2014).

2013:

• Established a local subsidiary in Abidjan, Republic of Côte d'Ivoire (West Africa). Official entry into the economic and financial hub of West Africa.

• Acquired the Asian fresh produce business and global processed food business from the U.S.-based Dole Food Company for approximately $1.7 billion (completed in April 2013). This secured one of the world's largest sales networks for bananas and pineapples, as well as the North American processed food business. This became the foundation for diversifying production sources to Africa (such as Sierra Leone, mentioned later).

2015: Formed a joint venture with Mazda for 'Mazda Southern Africa (Pty) Ltd,' a sales management company for Mazda vehicles in the Republic of South Africa (capital of 100 million rand, approx. 1 billion yen). ITOCHU invested in MSA, which was originally a 100% subsidiary of Mazda. Jointly developing automobile sales in South Africa and Sub-Saharan Africa.

2016: Invested in Transmar Group Limited, which engages in the collection, sale, and manufacturing/sale of cocoa products in North/Central/South America, Europe, and Africa. Entry into the food value chain, integrated from upstream to downstream, in West African cocoa-producing regions such as Côte d'Ivoire and Ghana.

1-5 Downstream, Agriculture, Textiles, and Green Transformation Period (2017–Present)

2017: Participated in a commercial vehicle assembly and sales business in the Republic of Kenya (East Africa). A commercial vehicle business responding to the expansion of logistics demand in East Africa.

2019 (Related to TICAD7):

• Sierra Tropical Ltd., a subsidiary of Dole, promotes pineapple plantation and agricultural processing business in the Republic of Sierra Leone (West Africa). Simultaneously concluded an agreement with the Sierra Leonean government (tax incentives and investor protection), an MOU for co-financing with the IFC, and an MOU for a vocational training partnership with the International Organization for Migration (IOM). Utilizing the Dole business as a demonstration field for diversifying African production sources.

• Concluded an MOU for textile industry support with the Ethiopian Textile Industry Development Institute and the Ethiopian Investment Commission in the Federal Democratic Republic of Ethiopia (East Africa). Dispatched experts to the textile manufacturing industry to improve quality and productivity and establish an inspection system for Japan. A unique business utilizing ITOCHU's DNA as a "textile trading company" for African production site development.

• Promoting a farmer support business in the Federal Republic of Nigeria (West Africa) in collaboration with JICA, utilizing SHEP (Smallholder Horticulture Empowerment and Promotion). Aiming to reduce agricultural loss and improve farmer income.

2020:

• Invested in Winch Energy Limited of the UK (via ITOCHU Europe PLC). Winch Energy independently develops Mini-Grids (small-scale independent power generation and distribution systems) and sells and operates these systems in five countries: Benin, Uganda, Togo, Sierra Leone, and Mauritania. A single unit can supply electricity to approximately 100 households. Along with power supply, it also provides peripheral services such as Wi-Fi, postal services, and refrigeration/freezing services, promoting the improvement of local residents' living standards and the creation of local industries.

2021: In collaboration with Takemoto Oil & Fat Co., Ltd. in the Republic of Malawi (an inland country in East Africa), developed initiatives for SDGs through the procurement of Malawian sesame seeds.

2022 (Related to TICAD8):

• Concluded an MOU for collaboration in the green hydrogen and ammonia field with Sasol, a major energy and chemical company in the Republic of South Africa. Jointly conducted a study on building a green ammonia supply chain in Boegoebaai, Northern Cape Province. Envisaging exports as fuel for power generation and shipping.

• Concluded an MOU with the International Organization for Migration (IOM) for sustainability activities to improve medical care and living standards in West and Central Africa.

• MOU for supporting IOM activities in Ethiopia.

• Donated a portion of the proceeds from Ethiopian sheep leather products to the IOM to support their activities.

2023–:

• Concluded a long-term offtake agreement with an environmental tech company that creates carbon credits in the Republic of Kenya. A business model that supplies carbon credits derived from forests and land use in Africa to the Japanese market and others.

• Participated in "Hyphen," a large-scale green hydrogen project in the Republic of Namibia. Namibia is rich in solar and wind power and is one of the most promising candidates for green hydrogen production.

• Promoting the development of an ammonia bunkering (fuel supply to ships) business at the Suez Canal in the Arab Republic of Egypt (North Africa) (reaffirmed as an MOU at TICAD9 2025).

• Initiated an effort to recycle one mobile phone in Africa for every mobile device sold domestically (circular economy).

August 2025 (TICAD9):

• Signed an MOU for strategic collaboration in the Sub-Saharan Africa region with DP World (headquartered in UAE, one of the world's largest port and logistics companies). Current areas under discussion: vehicle and logistics-related services, and wholesale business for daily necessities and food. DP World acquired Imperial Logistics (a major South African logistics firm) in 2022 and operates in 48 countries. It has invested over $3 billion in Africa to date and plans to invest an additional $3 billion over the next 3 to 5 years.

• Collaborating with Yanmar Agribusiness to establish a scheme for increasing rice production in Ethiopia by promoting agricultural mechanization (MOU with the Ethiopian Minister of Agriculture).

Chapter 2: Base Network

2-1 Current Bases (Africa Block Structure)

ITOCHU positions the entirety of Africa as one of its eight regional blocks, the "Africa Block," and maintains 10 bases across eight Sub-Saharan countries. The number of bases is even higher when including North Africa.

Country City Region Role

Republic of South Africa Johannesburg Southern Africa Africa Block Headquarters/Subsidiary (since 1997)

Republic of Kenya Nairobi East Africa East Africa Core Base (Mombasa 1938 -> Nairobi 1961)

Republic of Ghana Accra West Africa West Africa Base (since 1976)

Federal Democratic Republic of Ethiopia Addis Ababa East Africa Textile and Agricultural Business Base

Federal Republic of Nigeria Lagos West Africa West Africa Largest Market Base

Arab Republic of Egypt Cairo North Africa Energy and Hydrogen Base

ITOCHU's Africa Block General Manager (Mr. Shinya Ishizuka) oversees the bases. Access to the 48-country network in Africa is also complemented by the partnership with DP World.

2-2 Evolution of Base Strategy

• Early Period (1938–1960s): Expansion starting from East Africa, moving from Mombasa to Nairobi

• Expansion Period (1970–1980s): Expansion into West and Southern Africa, including Ghana (1976), Nigeria, and Zimbabwe

• Selection and Concentration (1990–2000s): Efficient reorganization of bases with the South African subsidiary (1997) as the core

• Period of Re-expansion (2010s–): Addition of Cote d'Ivoire subsidiary (2013), establishment of Africa block structure

Chapter 3: Detailed Business Overview by Domain

3-1 Textiles & Apparel — ITOCHU's DNA in Africa

ITOCHU Corporation's origins date back to 1858 as a linen wholesale business in Omi, Shiga. For ITOCHU, once known as the 'world's largest textile trading company,' textiles and apparel remain its most deeply rooted domain in Africa.

● Textile Product Trading across Sub-Saharan Africa (1960s–)

Exporting textile products, sandals, and daily necessities from Japan to various African countries. This was the first business category ITOCHU engaged in within Africa.

● Federal Democratic Republic of Ethiopia (East Africa) Textile Industry Support (2019–)

Signed multiple MOUs with the Ethiopian Textile Industry Development Institute and the Ethiopian Investment Commission, and dispatched experts to the textile manufacturing industry. Supporting technology transfer for quality and productivity improvement, as well as the development of inspection systems for the Japanese market.

With its low-cost labor and large-scale industrial parks (such as the Hawassa Industrial Park), Ethiopia has emerged in recent years as a manufacturing hub for global apparel brands. H&M, PVH (Calvin Klein/Tommy Hilfiger), and others outsource production to Ethiopia, and ITOCHU plays the role of a 'bridge between upstream and midstream' by providing technical support to meet their quality standards.

ITOCHU's Differentiation: While other major trading companies view African textiles as 'raw material (cotton) imports,' ITOCHU has a unique downstream-oriented strategy of cultivating 'Africa as a manufacturing base for apparel products.' It is working to develop a value chain of 'making in Africa and selling in Japan.'

● Agricultural Mechanization and Textile Agriculture with Yanmar Agribusiness (TICAD9 2025)

Promoting agricultural mechanization in Ethiopia in collaboration with Yanmar Agribusiness. There is potential for upstream entry, with a view toward textile (cotton) raw material agriculture.

3-2 Food & Agriculture — The Greatest Weapon: Dole

● Acquisition of US Dole Business (April 2013–)

In April 2013, acquired the Asian fresh fruit business and global processed food business from the US-based Dole Food Company for approximately $1.7 billion. One of the largest M&As in the history of ITOCHU's trading business.

Through this acquisition, ITOCHU gained one of the world's largest banana and pineapple sales networks and a processed food business that boasts the top market share in North America. Africa (Sierra Leone) was positioned as a key hub for diversifying production sources.

● Republic of Sierra Leone (West Africa) Dole Pineapple Farm and Agricultural Processing Business (2019–)

Sierra Tropical Ltd. (a 100% subsidiary of ITOCHU Corporation) is promoting the Dole business in Sierra Leone. Signed an agreement with the Sierra Leonean government (tax incentives and investor protection), an MOU for co-financing with the IFC (International Finance Corporation), and an MOU for a vocational training partnership with the IOM (International Organization for Migration).

Sierra Leone has high agricultural potential, and much of its agricultural land remains undeveloped even after the end of the civil war from 1991 to 2002. It is an integrated model of 'commercial agriculture x social issue resolution' that produces and processes pineapples (canned goods, juice, etc.) and allocates a portion of the profits to local employment and the mitigation of refugee risks.

2022: Dole Sunshine Company continues to expand the Dole business in Sierra Leone, reaffirming its sustainable commitment.

● Republic of Côte d'Ivoire / Republic of Ghana Cocoa Business (2016–present)

Through investment in Transmar Group Limited, ITOCHU engages in the collection, sales, cocoa product manufacturing, and sales of West African cocoa beans. Côte d'Ivoire is the world's largest cocoa producer (accounting for approximately 40% of global supply), and Ghana is the second largest. ITOCHU aims for vertical integration from upstream (collecting cocoa beans from farmers) to downstream (manufacturing and selling cocoa products).

● Food Trading (Sub-Saharan Africa)

For many years:

• Export of sugar, coffee, cocoa, sesame, pulp, etc., to Japan and Asia

• Export of coffee from Ethiopia, Kenya, and Tanzania to Japan

• Sesame from the Republic of Malawi (collaboration with Takemoto Oil & Fat, 2021–present)

● Federal Republic of Nigeria Agricultural Support (2019–present)

In collaboration with JICA, ITOCHU implements SHEP (Smallholder Horticulture Empowerment and Promotion) in Nigeria. The initiative focuses on increasing farmer income and reducing agricultural loss through educational activities for farmers.

3-3 Energy and Resources (Shift to Renewable and Clean Energy)

● Republic of South Africa (Southern Africa) Scatec Solar Photovoltaic Power Generation (2012–2014)

Norway-based Scatec Solar, in which ITOCHU holds a 37.5% stake, participated in the South African government's REIPPP (Renewable Energy Independent Power Producer Procurement Programme).

• 75MW project (started in 2012)

• 115MW project (one of the largest in Africa): Signed a 20-year power purchase agreement with South African state-owned utility Eskom (2012), operational by the end of 2014

Since 2011, South Africa has introduced an advanced mechanism to procure renewable energy from Independent Power Producers (IPPs) under the REIPPP system. ITOCHU was quick to ride this wave through Scatec.

● Republic of Namibia (Southern Africa) Energy Business (2007–present)

• Acquisition of interests in natural gas development (2007)

• Participation in uranium development project (2010): Namibia is one of the world's leading uranium producers

• Participation in Hyphen's green hydrogen project (2023–present): A project to produce and export green hydrogen in Namibia, which is rich in solar and wind resources. Namibia is attracting global attention as a cost-competitive green hydrogen production site, and the project aims to export to Japan and Europe.

● Republic of South Africa Sasol Green Hydrogen/Ammonia MOU (2022–present)

The company has also begun involvement in renewable energy-derived fuels, such as the green ammonia project in Southern Africa (Hyphen) and the signing of a memorandum of understanding with Sasol of South Africa to study green ammonia exports.

Sasol is a major energy and chemical company in South Africa (Marubeni and Sumitomo Corporation also hold MOUs with Sasol). They are jointly conducting a study on the production and export of green ammonia in Boegoebaai, Northern Cape. Building a green hydrogen supply chain is one of the core pillars of ITOCHU's decarbonization strategy.

● Arab Republic of Egypt (North Africa) Suez Canal Ammonia Bunkering (2023–present)

Promoting the development of a bunkering business to supply ammonia as fuel to ships passing through the Suez Canal (confirmed at TICAD8 and TICAD9). The Suez Canal is the world's most important maritime traffic route, with over 20,000 vessels passing through annually, and becoming a hub for decarbonized fuel (ammonia) bunkering could represent a massive market in the medium to long term.

● Sub-Saharan Africa (5 countries) Winch Energy Mini-Grid (2020–present)

ITOCHU Corporation participated in an investment in Winch Energy Limited through ITOCHU Europe PLC. Winch Energy has independently developed mini-grids (independent small-scale power generation and distribution systems consisting of solar panels, storage batteries, distribution lines, and smart meters) and is selling and operating these systems in five countries: the Republic of Benin, the Republic of Uganda, the Republic of Togo, the Republic of Sierra Leone, and the Islamic Republic of Mauritania.

Each unit can supply electricity to approximately 100 households. Along with power supply, they also provide peripheral services such as Wi-Fi, postal, refrigeration, and freezing services, promoting improved living standards for local residents and the creation of local industries. This model of providing life infrastructure on a broad scale using electricity as an 'entry point' is a competitive area of 'off-grid x life services' similar to WASHA and Mitsubishi Corporation's BBOXX.

● Republic of Kenya Long-term Carbon Credit Offtake (2023–present)

Signed a long-term offtake agreement with a Kenyan environmental tech company to supply carbon credits generated from the proper management of forests and land use to the Japanese market and others. This marks an entry into the emissions trading business for decarbonization.

3-4 Automotive & Mobility

● Republic of South Africa Mazda Southern Africa (2015–present)

ITOCHU participated in an investment in Mazda Motor Corporation's South African sales headquarters (Mazda Southern Africa, Pty Ltd), turning it into a joint venture. Capital is 100 million rand (approx. 1 billion yen). Jointly developing Mazda vehicle sales and service businesses in South Africa and neighboring countries.

South Africa is one of the largest automotive markets on the continent. Annual new car sales are approximately 500,000 units, with Japanese brands (Toyota, Nissan, Mazda, etc.) being prominent.

● Republic of Kenya Commercial Vehicle Assembly and Sales Business (2017–present)

Participating in a commercial vehicle (trucks, vans, etc.) assembly and sales business in Kenya. Kenya is a hub for East African logistics, and demand for commercial vehicles is growing in line with road infrastructure development.

● Republic of Zimbabwe (Southern Africa) Automotive Assembly Business (1980–present)

Participated in an automotive assembly business in Zimbabwe in 1980. An early example of entry into the manufacturing industry in Africa.

3-5 ICT, Security & Digital

● Federal Republic of Nigeria Galvanized Steel Sheet Manufacturing (1962–present)

Established Galvanizing Industries Ltd. as a joint venture in 1962 (manufacturing construction materials). ITOCHU's first entry into the manufacturing industry in Africa.

3-6 Resources (Metals and Minerals)

● Republic of South Africa Platinum Group Metals (PGM) Mine (2010–)

Participated in a platinum group metal (platinum, palladium, etc.) mining project in collaboration with Canada's Ivanplats (now Ivanhoe Mines) and JOGMEC. South Africa accounts for approximately 90% of the world's platinum reserves and approximately 40% of its palladium. PGMs are essential for fuel cell vehicles and exhaust gas catalysts.

● Republic of Namibia Uranium Development (2010–)

Namibia is the world's third-largest producer of uranium. ITOCHU participated in a uranium development project to secure interests in raw materials for nuclear energy.

3-7 Logistics and Supply Chain (Latest and Most Notable)

● Strategic Cooperation MOU with DP World (UAE) (TICAD9, August 2025)

ITOCHU Corporation has signed an MOU for strategic cooperation in the Sub-Saharan Africa region with DP World (Headquarters: Dubai, UAE), one of the world's largest port and logistics companies.

Currently, both companies are discussing various concrete initiatives in the Sub-Saharan Africa region, such as vehicle and logistics-related services, and wholesale businesses for daily necessities and food products. Furthermore, through this partnership, ITOCHU Corporation, which has long developed raw material and commodity trade businesses in Africa, and DP World, which has strengths in logistics and port businesses in the region, will collaborate to act as a bridge between Japanese companies aiming to enter Africa and the local market, aiming to create new business opportunities.

About DP World: A global leader in ports and logistics established in Dubai in 2005. Currently, it operates widely across 48 countries on the African continent. In 2022, it acquired Imperial Logistics, a major logistics company in South Africa. In terms of ports, it is promoting the development of Banana Port in the Democratic Republic of the Congo and Ndayane Port in Senegal, as well as the expansion of Maputo Port in Mozambique. Its investment in Africa exceeds $3 billion (with plans to invest an additional $3 billion over the next 3 to 5 years).

Strategic Significance: The partnership with DP World is symbolic, as they are jointly exploring the creation of a logistics network to deliver Japanese products to Africa and a local wholesale business for daily necessities. By combining ITOCHU's product supply capabilities in textiles, food, and consumer goods with DP World's logistics and port infrastructure across 48 African countries, this approach aims to solve the most difficult problem—'last-mile delivery to the downstream (consumer)'—all at once.

3-8 Circular Economy and CSR

● Domestic Mobile Phone → Africa Recycling Business

A program where one mobile phone is recycled in Africa for every mobile device sold domestically in Japan. This is the commercialization of the 'MOTTAINAI' spirit, simultaneously achieving waste reduction and the effective use of resources.

● MOTTAINAI Campaign × Green Belt Movement (2009)

In collaboration with the 'MOTTAINAI' concept advocated by Wangari Maathai (Nobel Peace Prize laureate), a campaign was conducted to donate proceeds from ringtone distribution to the 'Green Belt Movement' tree-planting activities in Kenya.

Chapter 4: Major Investment Track Record

Project Country (Region) Period Scale Status

Acquisition of Dole Business (Asian Produce and Processed Foods) USA → Global expansion including Africa 2013– Approx. $1.7 billion Ongoing (including Sierra Leone)

DP World Strategic Cooperation MOU Sub-Saharan Africa 48 countries 2025– Undisclosed (MOU stage) Under discussion

Scatec Solar 115MW Solar, South Africa (Southern Africa), 2012-2014, 37.5% stake (scale undisclosed), In operation

Scatec Solar 75MW Solar, South Africa (Southern Africa), 2012-, 37.5% stake, In operation

Mazda Southern Africa, South Africa (Southern Africa), 2015-, Capital 100 million Rand (approx. 1 billion yen), Ongoing

Hyphen Green Hydrogen, Namibia (Southern Africa), 2023-, Undisclosed, Under development

Sasol Green Ammonia MOU, South Africa (Southern Africa), 2022-, Undisclosed (MOU), Under consideration

Winch Energy Mini-grid, Benin, Uganda, Togo, Sierra Leone, Mauritania (5 countries), 2020-, Undisclosed, Ongoing deployment

Transmar (Cocoa) investment, Côte d'Ivoire, Ghana, etc., 2016-, Undisclosed, Ongoing

PGM Mine, South Africa (Southern Africa), 2010-, Undisclosed (Joint venture with Ivanhoe and JOGMEC), Ongoing

Dole Sierra Leone Pineapple Farm, Sierra Leone (West Africa), 2019-, 100% subsidiary Sierra Tropical, Ongoing

Uranium development, Namibia (Southern Africa), 2010-, Undisclosed, Ongoing

Galvanizing Industries, Nigeria (West Africa), 1962-, Joint venture, Long-term ongoing (details unknown)

Chapter 5: Summary of Strategic Evolution

5-1 Four Stages of Evolution

Stage 1: Textile and Daily Necessities Trading (1938-1969)Starting from East Africa with Mombasa as the base, the company specialized in the export of products closely tied to the lives of ordinary people, such as textiles, sandals, and daily necessities. This was an era when Itochu's founding DNA (textiles) was brought directly to Africa.

Stage 2: Diversification, Infrastructure, and Resource Entry (1970-2009)The company entered diverse fields including telecommunications equipment, plants, automobiles, uranium, and natural gas. Bases were also expanded to South Africa, Côte d'Ivoire, and Ghana. However, resource and infrastructure investments during this period were not as large-scale as those of other trading companies, and Itochu's 'non-resource-oriented' stance was maintained.

Stage 3: Renewable Energy, Food, and Textile Technology Transfer (2010-2021)Three axes progressed simultaneously: investment in renewable energy startups such as Scatec Solar (solar) and Winch Energy (mini-grids), agricultural development in Sierra Leone through the acquisition of Dole, and support for the Ethiopian textile industry. This was an era when the form of 'Itochu moving downstream' became clear.

Stage 4: Downstream Logistics, Consumer Goods, and Green Energy (2022-Present)Large-scale projects such as DP World (logistics), Sasol/Hyphen (green hydrogen/ammonia), and Suez Canal ammonia bunkering have occurred in succession. The two axes of 'logistics networks reaching African consumers' (DP World) and 'production and export of decarbonized energy' (green hydrogen) are the core of Itochu's Africa strategy in the 2020s.

5-2 Implementation of the 'Profit Lies Downstream' Strategy in Africa

Itochu's management policy, 'The Brand-new Deal: Profit Lies Downstream,' is consistently embodied in Africa as well.

Rather than creating value upstream (resource extraction or agricultural cultivation),the philosophy is to place strength in the 'distribution, sales, and logistics' segments closest to the consumer.

• Dole business: Downstream integration from production (Sierra Leone) to processing to consumers in Japan and Asia

• Cocoa (Transmar): Vertical integration from West African production to cocoa product manufacturing to retail

• DP World MOU: Ultimate downstream orientation as a "logistics network to deliver Japanese companies' products to African consumers"

• Ethiopian textile support: Upstream development and downstream sales collaboration, from African manufacturing to inspection and quality assurance for Japan

5-3 Independent entry into the green and circular economy

Itochu has positioned environmental management at the core of its business earlier than other major trading companies (1990; first trading company to obtain ISO 14001 certification in 1997). In Africa as well:

• Winch Energy (off-grid clean power, 2020)

• Scatec Solar (renewable energy IPP, 2012)

• Hyphen Green Hydrogen (Namibia, 2023)

• Sasol Green Ammonia (South Africa, 2022)

• Suez Canal Ammonia Bunkering (Egypt, 2023-)

• Kenya Carbon Credits (2023-)

• Mobile Phone Recycling Business (Africa, 2023-)

Itochu is developing these seven "green and circular projects" in parallel, which has become one of its axes of differentiation from other trading companies.

Chapter 6: Implications for Japanese Business Professionals

Implication 1: Thoroughly apply the "downstream" philosophy in Africa - The essence of the DP World partnership

Itochu partnered with DP World to solve the most difficult problem: the "last mile" of delivering products to African consumers.

Logistics costs in Africa are surprisingly high. In landlocked countries, transport costs from the port to the production site can sometimes exceed the cost of the product itself. Undeveloped logistics are the biggest barrier to exporting consumer goods to Africa. DP World owns the major South African logistics firm Imperial Logistics and has a logistics network across 48 African countries. By leveraging this network, Itochu can access the "downstream last mile" without having to make its own logistics investments.

Implications for practice: The biggest challenge in exporting consumer goods and daily necessities to Africa is "logistics and distribution." Rather than trying to build a logistics network from scratch, it is more realistic to tap into existing platforms like DP World or Imperial Logistics. The idea of "whose truck to put your products on" is the key to the consumer goods business in Africa.

Implication 2: Differentiation through "technology transfer" in textiles - The Ethiopia model

Supporting the textile industry in Ethiopia is a unique strategy that leverages Itochu's DNA as a textile trading company. While companies like H&M and PVH are exploring manufacturing outsourcing in Ethiopia, Itochu is providing technical support to meet Japanese inspection standards, directly contributing to enhancing Ethiopia's value as a manufacturing hub. This makes it possible to develop an 'Africa-to-Japan textile value chain' where clothing manufactured in Ethiopia is imported into Japan.

Implications for Practice: View technology transfer to Africa not as a 'cost' but as an 'upfront investment for market development.' By raising local manufacturing standards to meet Japanese and European quality benchmarks, we can overturn the image that 'African-made equals cheap and low quality,' creating a market that competes on quality and reliability rather than price. This logic applies not only to textiles but also to agricultural products, processed foods, and medical equipment.

Suggestion 3: Africa as 'Production Base Diversification' — Dole's Sierra Leone Strategy

Developing Sierra Leone as a pineapple production site for the Dole business also serves to diversify risks from existing production sites in the Philippines, Thailand, and elsewhere. The idea is to secure a 'second production base' in Africa to prepare for risks such as climate change, political instability, and rising labor costs.

Implications for Practice: For agricultural and food companies, Africa can function not only as a 'new market (sales destination)' but also as a 'new production base (procurement source).' The combination of Sierra Leone's abundant agricultural land, low-cost labor, and government incentives (tax breaks) is worth considering as an option for food companies to diversify their production bases. IFC's co-financing schemes can also be utilized.

Suggestion 4: Green Hydrogen as 'Africa's New Mineral Resource'

Namibia and South Africa have some of the world's lowest costs for solar and wind power generation. A supply chain that uses surplus electricity to electrolyze water to produce green hydrogen, converts it into ammonia, and transports it by ship is a scenario where Africa becomes an 'energy-exporting continent.'

Itochu is betting on this scenario through a three-pronged approach: Hyphen (Namibia), Sasol (South Africa), and Suez Canal ammonia bunkering (Egypt). The Suez Canal is a 'transit point for transport routes' for green ammonia, and the bunkering (fueling ships) business is expected to grow rapidly with the spread of green shipping.

Implications for Practice: Green hydrogen is a 'new mineral resource' that Africa can supply to the world. For companies in the steel, chemical, and shipping industries, procuring green hydrogen and ammonia from Africa will be an important decarbonization strategy option for the 2030s. Starting to build relationships with production sites now will lead to first-mover advantages.

Suggestion 5: 'Exploring' through Startup Investment — The Winch Energy Model

Itochu's investment in Winch Energy (mini-grids) is relatively small-scale, but it plays the role of 'exploring the potential of new markets in unelectrified regions of Africa.' By investing in startups, one can:

• Understand the reality and challenges of local business from a management perspective

• Hold priority rights for future business expansion and additional investment

• Utilize them as sales channels for the company's own products and services (daily necessities, etc.)

As a precursor to large-scale investment, the approach of 'learning' about the African market through small-scale startup investment is an effective risk management strategy in the highly uncertain African market.

Implications for Practice: In the initial stages of entering Africa, utilize small-scale investments in and partnerships with local startups and SMEs as a 'means of market learning.' It should be positioned as a 'real option' where you can gain material to judge the feasibility of future large-scale investments while experiencing the local reality firsthand over several years with an investment of 100 to 500 million yen.

Conclusion: Itochu's Africa, a Proof of 'Profit Lies Downstream'

Looking back at Itochu's 88-year history in Africa, a consistent theme emerges. It is a downstream orientation of 'creating value in places close to consumers.'

Starting as a textile trading company and beginning African business with the export of sandals and daily necessities, it is evolving into a 'logistics and consumer goods wholesale platform for 48 sub-Saharan countries' in the form of the 2025 DP World partnership. Agricultural farms in Sierra Leone through Dole, textile industry development in Ethiopia, carbon credits, and green hydrogen—what they all have in common is the philosophy of 'creating added value in Africa.'

In an era when Africa's population, which will exceed 4 billion by 2050, participates in the market as 'consumers,' the player 'closest to those consumers' will reap the greatest profits. Itochu's philosophy that 'profit lies downstream' is precisely anticipating that.

* This report was prepared based on publicly available information as of May 2026. As business conditions are subject to change, please refer to the respective official documents for the latest information.