Sumitomo Heavy Industries Opens New Plant in Brazil

Built to Manufacture Gear Speed Reducers for Heavy Industry and Expand the South American Market

Total Investment 130 Million Real

TOKYO--(BUSINESS WIRE)--Japanese industrial machinery manufacturer Sumitomo Heavy Industries, Ltd. (SHI) (TOKYO:6302) held the opening ceremony for its newly completed plant in the city of Itu, Sao Paulo, Brazil on Tuesday, November 22, 2011. The plant, which is operated by SHI's local subsidiary, Sumitomo Indústrias Pesadas do Brasil Ltda, was built at a total investment of 130 million Real. It will manufacture gear speed reducers not only for the Brazilian market, but also neighboring countries throughout the Americas. SHI's gear speed reducer products are used with various motor components to drive cooling towers, mixers, conveyers and other equipment. The plant will begin production with a focus on heavy equipment industries such as mining, steel production, sugar manufacturing and brewing as its target markets.

“The Brazil plant becomes our newest gear reducer factory. In our growth strategy for this business, we are placing our focus on markets in developing countries, and we have great expectations for Brazil.”

The Brazilian plant becomes the eighth major overseas gear reducer manufacturing center, joining similar facilities in China, the United States, Germany, Belgium and Vietnam. According to SHI President Yoshinobu Nakamura, "The Brazil plant becomes our newest gear reducer factory. In our growth strategy for this business, we are placing our focus on markets in developing countries, and we have great expectations for Brazil." Mateus C. Botelhos, a representative at the Brazil plant, also expressed his enthusiasm, "Our goal is to bring the Brazil plant on-line and expand operations quickly." The plant currently covers a total area of 20,000 m² which includes factory 11,200 m² and the office building 2,400 m², and operates with a workforce of 60 employees.

Sumitomo Indústrias Pesadas do Brasil Ltda owns a total of 447,000 m² of land and SHI will consider future expansion as its business growth in Brazil.

In FY2010, Sumitomo Heavy Industries' gear reducer business, had net sales of 74.6 billion yen (1.6 billion Real), accounting for 13.6% of total net sales. Worldwide the company has about 5,400 employees in operations related to this business. SHI has been developing operations in Brazil since 1976, when it established its first office. According to Botelhos, "Although we have maintained small-scale, steady operations in Brazil, we plan to grow in the future. Our immediate goal is to increase sales of gear reducers produced at the Brazil plant to five billion yen (104 million Real) by 2015. Half of these sales will be in Brazil, while the balance will be in other countries within South America." The new plant has a monthly production capacity of 200 units and will perform all operations, from materials cutting to processing, assembly and shipment on its premises.

About Sumitomo Heavy Industries, Ltd.

Founded in 1888, SHI is proud of its long history and tradition. Consolidated revenues in fiscal 2010 were 548 billion yen (11.4 billion Real). In addition to gear reducers, the Company handles a broad range of products, including plastic injection molding machines, semiconductor production equipment, construction machinery, heavy-duty cranes, steam turbines for power generation, oil tankers and environmental facilities and plants. With numerous plants and offices in countries other than Japan, overseas revenues account for over 50% of total net sales. SHI plans to further increase this figure in the future. The SHI Group has approximately 17,000 employees. Capital totals 30.9 billion yen (0.6 billion Real).