Key Point of President's Regular Press Conference(2001) June 2001

1. Speech by Mr. Abe, Honorary Advisor

  1. 1. At the completion of the annual shareholders' meeting
    First, allow me to thank you for successfully completing the 77th annual shareholders' meeting. The completion of this meeting signals a new phase in my life, and it is indeed an emotional day for me.

    Today's meeting was held at the Chubu Electric Power Higashisakura Kaikan" hall, which opened in May and was attended by a record 1,508 shareholders. Seven proposals were made at the meeting, and there were eleven other questions.

    For our part, we reported on our business outline for FY2000, and did our best to answer shareholders' questions on such issues as the development of new power sources, the issue of nuclear power, environmental issues, and liberalization of the electric power industry.

    Chubu Electric Power will continue to take into account the invaluable views of our shareholders and investors, in addition to our customers and business partners, and will take every available opportunity to provide information and explain our views on various issues, as well as the work in which we are currently engaged. By so doing we aim to maintain our good reputation in the market, and enhance our value as a company.

  2. 2. Upon stepping down from post of Chairman of the Board of Directors
    As of today I have resigned as Chairman of the Board of Directors at Chubu Electric Power. As I step down, allow me to express my sincere gratitude to everyone who has helped me over the years, particularly our customers and shareholders.

    I joined the company in 1949, when it was still Chubu Haiden, and have remained in the power industry for just over fifty years. This year, in fact, is the 50th anniversary of Chubu Electric Power, and as the only person still in the company who was there when it all started, the history of Chubu Electric Power is also the history of my working life, which makes leaving the front line a doubly emotional experience for me. When I look back over these years, certainly there were some hard times but, having come this far, I think I can say that all of those hard times were but single pages in what overall has been a good and very rewarding working life.

    At the very beginning of the electric-power business we experienced some very difficult times, due for example to difficulties in procuring funds, and we immersed ourselves in work with little concern for anything else. Eventually, Japan entered a period of high economic growth in the 1960s and 70s, and I think we can take some pride in the way Chubu Electric Power responded to the demands of society, developing with the community and fulfilling its obligations as a public utility. We are now in a new age of liberalization. Moves were made to put in place systems for liberalization of the power industry during my tenure as chairman of the Federation of Electric Power Companies. There has been considerable debate surrounding the issue of liberalization; one can only hope that this freeing up of the market takes a form that is appropriate for the country and good for society.

    My basic philosophy regarding management of the business has been one of "wishing together, thinking together, walking together," by which I mean I have endeavored to build relationships with our customers, our shareholders, the people of this region, and our employees. In so doing I have spoken of "spirit and prudence," or "the importance of 'fierce determination' and 'modesty and caution,' as individuals and as a company."

    I don't know to what extent my philosophy, I suppose you could call it, has been adopted by society or our company, but I believe it holds a universal and important meaning for us as a company that must be aware of what's happening in the rest of the world, in addition to being part of the community in this region.

    I feel I have played my part, and a "load has been lifted from my shoulders," as they say. However, we are also currently in a phase of dramatic change following the restructuring of the power industry, and have just experienced what amounts to a second start for the company. Therefore, not surprisingly, the future of Chubu Electric Power is still very much on my mind. This "second beginning" is sure to bring many difficulties as we strive to reach the top in this new competitive age and, having recently decided to entrust the future to my younger colleagues, I can only ask that you all give your full support to the new Chairman, Mr. Hiroji Ota. and the new President, Mr. Fumio Kawaguchi, and that they do their utmost to ensure the success of the company.

    As of today I shift to an advisory role in the company, which will allow me to advise the company about energy issues in general, including electricity, with greater flexibility. My personal desire to work for further development of the Chubu region also remains unchanged. There is much work to do as a region to push ahead with projects such as the Chubu International Airport and the international expo, and I intend to be part of these efforts from now on.

    Today, the company enters a new phase, headed by Mr. Ota and Mr. Kawaguchi. I am confident they will demonstrate the courage required to succeed in the new competitive environment by taking measures that give more consideration to the market, while holding fast to our existing position of a business run for the benefit of the public. I sincerely hope that they will drive the company forward, undaunted by any obstacles, remembering our original aim to "be of use to society." I ask you all to give your full support to our new Chairman and President.

    Finally, I would like to close by expressing once again my deepest gratitude to everyone for their great kindness over the years. Thank you.

2. Speech by Mr. Hiroji Ota, Chairman

My task today will be to report on directorship matters decided at the meeting of the board of directors convened today, following the annual shareholders' meeting. The appointment of a new chairman and president, which we informed you of prior to the May announcement of the results for the year, was formally decided at this directors' meeting.

There will continue to be five executive vice-presidents: Vice-President Aoki will remain in office, and will be joined by four others, Mr. Ichihara, Mr. Terasawa, Mr. Nakano, and Mr. Nojima.

There are nine managing directors: Mr. Manabe, Mr. Mochizuki, and Mr. Yagi, in addition to six new managing directors. We have asked Mr. Hamada to be the director responsible for the Federation of Electric Power Companies, with remuneration at the managing-director level.

In allocating responsibility for different aspects of our operations to the directors, we have been particularly mindful of the need to build a strategic structure in response to the new era of competition. Speed and mobility in operations will be essential for responding to changing times in a competitive business environment, and these were our main considerations in the division and allocation of responsibilities. I myself, along with each of the directors, am determined to keep these factors for success in mind at all times, and to demonstrate leadership as we enter this new era.

The first job for this new management team will be to tackle the specific tasks reported recently in our "Management Reform Roadmap."

As of July 1 we will establish seven new departments, including a "Management Strategy Department." These departments will be headed as follows: Executive Vice-President Terasawa will take the new position of head of the "Management Strategy Department," and Managing Director Mr. Noda will head the "Sales Department." Managing Director Mr. Ito has been appointed to the existing position of head of the "Plant Siting and Environment Dept.", and Managing Director Mr. Mochizuki has been appointed to the "Research and Development Planning Department." The "Management Strategy Department" will commence operations with new sections, the "Business Development Dept." and the "International Dept." We have also replaced the previous kansho system, under which managing directors were responsible for individual areas of the business with newly established "control" positions, with the four executive vice-presidents and five managing directors having authority over multiple divisions of the company. I believe this is the best possible lineup of directors for the company, and hope it will enable us to conduct operations with a strong emphasis on the strategy for which the "control" system is designed.

In conclusion, as of today I accept the position of Chairman of the Board of Directors at Chubu Electric Power. In addition to taking the helm of company operations, I intend to work even harder for the region as a whole. President Kawaguchi and I will be making even greater efforts to ensure the success of the business, and I ask for your continued support.

3. Speech by Fumio Kawaguchi ,President

As of today, I begin my tenure as president of Chubu Electric Power, so please allow me to say a few words.

The industrial economy of Japan has reached a significant crossroad and, with the power industry also going through a period of major upheaval, I know I will have my work cut out for me in taking on this considerable responsibility. With your assistance, however, I will do my very best to live up to your expectations.

Today seems a good opportunity to describe to you the various goals I am determined to achieve as I accept this post.

First, I am determined to take up the challenge of change. As we enter the 21st century, it is clear that the most critical issue for this company will be our response to the new era of competition. Liberalization of the retail power market began in March of last year, bringing major changes to our operating environment. A year has passed since then, and I believe this competition will only become more intense.

In the space of a year, leadership in the power industry has made a considerable shift from the supply to the demand side, that is, to our customers.

I believe that the key word in this environment is "change." The survival of companies will depend on how well they adapt to this change. In an era of rapid change, a company must constantly have its finger on the pulse of the market to ensure that they deliver what their customers want.

Therefore, I believe that what our company needs now is an organizational structure that will allow it to respond swiftly to changes in the operating environment, and to make all employees aware of these changes and what their own response to them should be. In short, each of us must change our own outlook so that we may "see with the customer's eyes, and take action from the customer's viewpoint." If we look at the history of the electric power industry, we find the words of Yasuzaemon Matsunaga in his 1922 appointment speech as director of the then Toho Electric Power Company, in which he states, "I expect you all to show courtesy and kindness to the public, our customers." I believe we urgently need to take a step beyond this business philosophy, or basic principle if you like, and make a change within ourselves to considering things and taking actions from the customer's viewpoint. Because the closer we are to our customers, the more information we should be able to gather, and the faster we should be able to do it. I am determined to do everything in my power to achieve this revolution in outlook among our staff, build systems capable of swiftly responding to the changes in the operating environment, and ensure that the entire company works together to achieve this transformation.

My second focus will be to "make us a strong company." Chubu Electric Power must enhance its competitive ability in comparison to other companies in the industry and any new entrants, while also keeping an eye on trends in liberalization, to build a stronger, more dynamic company with the ability to lead the industry.

The details of our plan of action to achieve this may be found in the recent "Management Reform Roadmap." I take my responsibility for achieving the cost-cutting targets and carrying out the various reforms described there extremely seriously, and intend to put everything I have into this task. I will continue to work aggressively to improve our financial position, but I also hope to make Chubu Electric Power a general energy company with core competencies in the energy field, and I will make active efforts to expand the revenue base of the group as a whole into new fields, including telecommunications and community projects. It goes without saying, however, that our duty to work for the public good by providing universal service remains as important as ever.

The third goal I am determined to achieve is to "make the most of the unique features of Chubu Electric Power." In managing our business, I want to ensure that the individuality and special features of the company come to the fore, starting with the kind of characteristics I have just mentioned. This is because I believe that simply keeping pace with other companies, or doing things because other companies are doing them, is not a sufficient response in this era of change. For example, if you look at developing new businesses, liberalization means that we as a power company can also move into new business areas. I hope to use this opportunity to make maximum use of the management resources that distinguish our company and the group, in order to develop new businesses that address the needs of customers, whether through collaboration with partners or on our own. Furthermore, as we go about our daily work, at the most fundamental level it is people that are important. For example, in terms of working "from the customer's perspective," success will depend largely on the frontline staff, who deal directly with customers. However, it is important that all employees, not only those on the front line, have a renewed awareness of the need to see things "through the customer's eyes." I believe, therefore, that if each of us allows our individuality to come through in our work to improve the quality of that work, the company will gain new features that will set it apart. People are and always have been our most valuable asset, and if each of us makes the utmost effort in his or her own role in the company, I believe this will also make our work more satisfying. I am confident as well that if we all do this consistently, customers will choose our company.

I hope this has given you a general idea of what my focus will be as I begin my tenure as President. I intend to work very closely with Chairman Ota, solicit advice, and put everything I have into the task of managing the business. I ask you all for your guidance and support - you can expect great things from Chubu Electric Power.