Damian Stewart, Managing Partner at HC Group, talks to Vineet Kohli, CEO of Mitsubishi Corporation RtM (‘Resource to Market’) International Pte Ltd
I first met Vineet Kohli over lunch in 2011 at the Oberoi hotel in New Delhi, when he was President of BHP Billiton’s Marketing Services for India. Fast forward eleven years, and Kohli is now based in Singapore as the CEO of Mitsubishi Corporation RtM International (RtMI) which acts as the global headquarters of the mineral resources and metals trading business of Mitsubishi Corporation (MC).
A unique trading entity
Reflecting on his personal career journey and profile, Kohli admits that his playing field is an unusual one.
An Indian national, he has been RtMI’s CEO since April 2020 and his career with Mitsubishi Corporation (MC) spans over 16 years across different business groups. A lawyer by training, Kohli’s first stint with the Japanese conglomerate begun in 1995 as a Business Manager for the Machinery Group in New Delhi. He eventually settled into the Metals Group (now known as the Mineral Resources Group), overseeing Ferrous Raw Materials and Non-Ferrous Products. After nearly 9 years, he left to join BHP Billiton and rose through the rank to become President of the India subsidiary.
In 2014, he returned to Mitsubishi as Executive Vice President of the Ferrous Raw Materials Division with a mandate to establish and solidify RtMI’s foothold in the bulk commodities space. “The opportunity to work in a new setup was exhilarating. I realized the potential of the organization and its capability. There was so much we could do,” Kohli tells me.
Value over volume
It was clear from the beginning that RtMI would not function as a pure marketer and simply focus on optimizing its own trade flows. “Miners are blessed with the resource and scale to plan their production and sales volume. The resource portfolio of Mitsubishi was very helpful for us to connect to the market and get started. However, as we went along, we found that the trajectory and speed of investment in the resource market were quite different. That’s why prioritizing value over volume is so important to us,” Kohli explains.
This triggered the need for RtMI to generate value through their trading and marketing activities and develop its own functionalities and capabilities as a standalone business. It developed a hybrid business model that plays to a unique set-up: leveraging the legacies and strengths of Mitsubishi’s brand and reputation and operating as an independent trading business that does not rely solely on the corporation’s capabilities. It had to shape its own innovative and creative culture by building its own relationships with other third parties.
“Necessity is the mother of invention. We have been constantly trying to find value in the physical flow, whether we can add value at origination, at the destination or during the voyage,” Kohli explains. “We asked ourselves: what functions could we perform during the entire cycle which would generate greater value for the customers and greater value for Mitsubishi as a whole. That is what we've been trying to do over the last several years,” he rationalized.
The results speak for themselves. In the last nine years, RtM Group has built a thriving third party trading business that has grown in strength and capability, and with it an expanding customer portfolio both in the upstream and downstream industries.
Today, RtMI remains one of a small number of metals and mineral trading entities to be globally headquartered in Asia. The Group has built a diverse portfolio of ferrous and non-ferrous bulk commodities and metals, spanning aluminium, precious metals, stainless steel and battery materials, copper and zinc concentrates, and other mining products and raw materials such as bauxite, iron ore, thermal and metallurgical coal and coke.
Its geographic locations across Tokyo, London, Shanghai, New York, New Delhi, Indonesia, Thailand, and Middle East have helped accelerate its growth in both developed and emerging markets, connecting trade opportunities across the globe. During the turbulent period of the coronavirus pandemic and the onset of the war in Ukraine, disrupted trade flow presented new opportunities that were captured in a timely manner thanks to the Group’s international network and strong counterparty relationships.
“Our activities are very well spread in terms of business portfolio, and we have been working steadily on building these trade connections. It is also about understanding their needs and pain points and connecting them to the right origination and destination. The market has been turbulent in the last few years, but we had much support and most importantly, we are not heavily reliant on one particular commodity or one region,” Kohli says.
Going one step further, the company has been able to gather valuable market intelligence from the ground and to funnel it back to the investment unit which has been helpful to grow the asset portfolio. This two-way exchange and close collaboration have allowed the company to create decision-making synergies within the Mineral Resources Group and enabled a much more organized development of its overall portfolio.
Building such capabilities for a relatively young start-up would not have been possible without the solid credentials and financial back-up from Mitsubishi, Kohli concedes. Even then, RtMI has been diligent in keeping strong financial discipline when it comes to allocating capital to the business, monitoring risks and maintaining working capital limits, Kohli explains.
“Our DNA is inherently linked to a foundation which has a very long history. Mitsubishi’s three-diamond logo is very iconic and says a lot. We are not that publicized as a company, but we do have a very strong brand value and that brand value comes with responsibility.”
Thanks to this, RtM has established itself in the market at its own pace to achieve scale and therefore long-term impact. “We built this business in a decade and we will be here for good,” he says. “We're not in a rush and we will bring value in the decades to come.”
The current market environment and the fast-paced nature of the industry means that generating value is more strategic than ever. At a time of shifting trends and drivers like decarbonization, RtM is in an ideal position to create an innovative portfolio that prepares it – and Mitsubishi by extension – to future challenges.
“The Group has been working on building our future portfolio: projects designed to create a circular economy, in the green metals space as well as in raw materials for batteries like lithium, nickel and platinum group metals for electrification and the development of hydrogen-based society. This is part of the business’ constant transformation to respond to the market’s needs,” he adds.
Building a culture
But creating value for RtMI is not just about optimizing operations and trading. This vision goes as far as reshaping an entire company’s mindset, culture, and reputation.
Mindful of the perception linked to typical Japanese corporation archetypes, Kohli has been working on overturning such mindsets. He has put in place an open work environment and a flat organization structure, aimed at accelerating decision-making and creating a more dynamic, creative and solution-driven culture.
“We already have a strong brand, so it is about turning negative perceptions into strengths. I believe in building long-term relationships and that includes the people who work for us. Integrity and respect are key. Giving opportunities to grow with the business is important to retain and develop our people asset.”
At present, RtM group employs around 500 individuals with a good mix of hired professionals with specialized trade skills and secondees from Japan. That number continues to grow.
My sense is that Kohli’s own journey has given him the necessary inventiveness to constantly refine his vision for RtMI. Yet, from the outset, it was not going to be easy. Being a non-Japanese CEO within a large Japanese corporation can be described as an exception. But his tenure at RtMI has allowed him to cement his own leadership style and blend fast-paced Western business practices with the resourcefulness and tenacity of the Mitsubishi corporate culture.
Kohli puts his success down to the initial foundation of his professional career and the long-term connections he had made during his first stint with MC India. “Your first job gives you an initial grounding and work orientation, it shapes your personal preferences,” he ponders. “I understood the value of long-term relationships with colleagues and customers, and of their continuity,” he recalls. “When I came back to Mitsubishi, many people were still there, I had a lot of friends. It was like homecoming,” he adds.
I can’t help thinking that RtMI’s DNA is one of a kind. Its agility and values have allowed it to stand out, notably by defining what it is not, and constantly evolving and adapting to the future’s ever-changing challenges.
For queries related to HC Group’s Metals and Mineral activities in Asia Pacific, please contact Premesha McDonald, Portfolio Director at HC Group’s Singapore office.