Relationship with ExxonMobil
ExxonMobil Corporation, through its affiliated companies, is a 50.02% shareholder of TonenGeneral.
In connection with the merger in 1999 of Exxon Corporation and Mobil Corporation in the U.S. to form Exxon Mobil Corporation, and the merger in 2000 of Tonen Corporation and General Sekiyu K.K to form TonenGeneral, the ExxonMobil Japan Group including TonenGeneral adopted a business structure built along functional principles. The objective of this structure is to organize the ExxonMobil Group globally by each business line or function, to allow such organization to take advantage of economies of scale, rapid improvement in process efficiencies in each such global line, and rapid implementation of best practices from around the world.
To implement functional organization,TonenGeneral drives business efficiencies through a mutual entrustment agreement with ExxonMobil Yugen Kaisha. For example, TonenGeneral is entrusted with certain logistic functions for petroleum products for ExxonMobil Yugen Kaisha. On the other hand, ExxonMobil Yugen Kaisha is entrusted with marketing functions for petroleum products and administrative functions of the TonenGeneral group. TonenGeneral owns its assets, brands, and business, retains its own income/loss, pays fair costs for entrustment services performed by ExxonMobil Yugen Kaisha and receives fair costs for entrustment services it performs for ExxonMobil Yugen Kaisha.
The Business Relationship Between TonenGeneral and ExxonMobil Yugen Kaisha
Furthermore, TonenGeneral maximizes utilization of the ExxonMobil global network. For example, in our refining and supply segments, utilization of the ExxonMobil group's supply system, which is directly connected to markets worldwide, allows us to make optimal judgments in procuring feedstocks that meet the requirements of our customers and supplying the finished products. In our refining segment in particular, we have achieved a high degree of efficiency in our operations by sharing the experience and know-how of the groupfs refineries in 35 locations worldwide. In this way, we are working to build the most efficient production system possible, reflecting changes in demand in both domestic and overseas markets.
