June 30, 2015,15:15 +0900(JST) There is No End to Improvement

On June 18, we held the awarding ceremony for the FY 2014 President's Awards for Improvement Proposals. In previous years, we had held this ceremony along with a small-group activities (called "Group Activities" at Sumitomo Electric) presentation event. This year, however, we held the ceremony on a different day from such a presentation event, allowing me more time to spend talking with each award recipient.

Last fiscal year, the number of proposals submitted to Sumitomo Electric and some group companies exceeded 50,000. In the field of manufacturing, improvement activities are essential in enhancing productivity, product performance and quality. This time, of all the submitted proposals, six were selected, and granted President's Awards.

I made comments on the proposals after presenting the awardsI made comments on the proposals after presenting the awards
▲I made comments on the proposals after presenting the awards

After the ceremony, each award recipient explained the details of the improvement that he had proposed. All the recipients said that they had carried out a process of fact observation conscientiously until finding the cause of the particular problem, and then repeated the process of formulating hypotheses and verifying them, before discovering the best improvement measure. Just as expected of proposals selected from among 50,000, all six proposals were filled with originality and ingenuity.

One of the recipients told me that he had hit upon a clever device when seeing a coworker washing an electric kettle. I feel that this is similar to the story of Newton's apple. If you always think about an issue desperately, you might be able to gain a hint to solving the issue from a phenomenon that may seem to be totally irrelevant at first glance. It seems that the deity of ideas loves those who can see a problem from a totally new perspective free from stereotypical thinking, and those who have an earnest determination to solve the problem.

June 19, 2015,09:25 +0900(JST) Mr. Konishi Wins the Asian Athletics Championships!

Our athletics club member Yuta Konishi won the men's 400 m hurdles at the 21st Asian Athletics Championships, held in Wuhan, China, from June 3 to 7.

Our staff members who accompanied him said that they felt their bodies trembling with excitement when seeing the Rising Sun flag hoisted on the main pole in front of Mr. Konishi, who had the gold medal on its ribbon around his neck, and hearing Japan's Kimigayo national anthem played at the venue. This was the first time for a member of our athletics club to win a prestigious international event representing Japan, and so I can understand how they felt at that time.

I'm sure that to qualify to compete in the World Championships in Athletics, which is to be held in Beijing, China, in late August of this year, he will do his best again at the coming Japan National Championships (to be held in Niigata from June 26 to 28). We look forward to continuing to receive your support for Mr. Konishi and other members of our athletics club.

Mr. Konishi (at left in the photo)Mr. Konishi, immediately after winning the race

▲Mr. Konishi (at left in the photo) (left)、Mr. Konishi, immediately after winning the race (right)

June 19, 2015,09:20 +0900(JST) Winning a Contract for Subsea Direct Current Cable System in EU

On June 8, we announced that our group company J-Power Systems Corporation has won a contract with NEMO Link Limited for a DC 400 kV XLPE subsea cable system. In this project, the cable system consists of a 130-km subsea cable route and an 11.5-km land cable route, with the cable expected to connect the UK and Belgium.

For details, please check the relevant press release. We believe that this contract is significant in two aspects. First, we have won the contract for a cable system of the 400 kV class, which is the highest level in the world as a commercial operation voltage for a DC transmission XLPE cable system. The other point is that we have become Asia's first cable manufacturer to win a contract for a long-distance power transmission line connecting countries in EU.
(⇒press release:J-Power Systems Wins Contract with NEMO LINK for HVDC Subsea Interconnector Cable System between UK and Belgium

The history of our operation originated from the project of 1922 for installing a subsea cable between Niihama, Ehime Prefecture and Shisakajima Island. In those days, it was unprecedented even in the world to install a subsea cable between two islands located more than 20 km away from each other. It is said that even foreign cable manufacturers hesitated to engage in this project. Nevertheless, we (called Sumitomo Electric Wire & Cable Works in those days) took on the challenge and achieved success. It can be easily imagined that this gave the company and staff members a lot of confidence, which has led to the subsequent expansion of our businesses.

In EU, from the perspectives of ensuring energy security and realizing mutual interchange of renewable energy (whose output is unstable), the establishment of transmission networks connecting countries is being promoted actively. Since these networks are extremely important infrastructure, the quality and reliability demand for related products and systems are extremely high. Believing that a successful completion of this project will lead us to further growth, all of us concerned will work very hard with the spirit of Banji-nissei (Do your sincere best in not only business but also every aspect of your life).

June 19, 2015,09:15 +0900(JST) Meetings with Special Agents

Many of our group's products are delivered to end users via special agents. Since many of our group's products feature characteristics that are not easy to identify at first glance, it is essential for us to ensure that special agents, who act as a bridge between end users and us, will understand our products even better. With this as a background, our production groups, which do businesses in close cooperation with special agents, hold periodical explanation sessions on new products and new technologies.

The week before last, we held an explanation session at Axismateria Ltd., a group company located in Ono City of Hyogo Prefecture, renowned as a production center of abacuses. The event attracted representatives from about 40 special agent companies doing businesses with our Hardmetal Division and Powder Metal Products Division. We explained to them our cutting-edge technologies and recycling technologies related to the manufacturing and development of alloy materials.

Plant tour at Axismateria Ltd.
▲Plant tour at Axismateria Ltd.

Meanwhile, last week, we also held an explanation meeting in Tokyo for special agents doing businesses with our Social Infrastructure Sales & Marketing Unit and Electronics Sales Unit. The event drew approximately 50 participants, including those from abroad. At the session venue, we exhibited products handled by both units, so that participants were able to view them before the start of the event.

After each meeting, we held a social gathering to exchange various information with participants. As usual, the conversations with special agents, who work very hard on the front line of sales activities, were truly stimulating. We were able to learn a lot which direction the unpredictable wind of the economy was blowing to, as well as how strong the wind was.

At both events, I expressed my sincere appreciation for the daily, generous support and cooperation from each participating company, and presented letters of appreciation to agents who had demonstrated outstanding performances for us.

Session held in Tokyo
▲Session held in Tokyo

June 5, 2015,13:00 +0900(JST) Mid-Term Revision of VISION 2017

On May 26, we announced revised targets for our mid-term management plan VISION 2017.

In VISION 2017, our five-year plan from FY 2013 to FY 2017, we set numerical targets as follows: sales of 3,000 billion yen; operating income of 180 billion yen; and ROA of 9%. However, we originally decided to conduct a mid-term review of VISION 2017 with consideration given to environmental changes made after the plan's establishment. This was because during the period of the previous five-year plan (VISION 2012), we had experienced considerable changes in the external environment. These changes, including effects triggered by the Lehman Brothers bankruptcy, were truly profound and totally out of control for a single company alone.

Consequently, considering changes in the exchange rate, our business results, and other elements, we have set new numerical targets as follows: sales of 3,300 billion yen, operating income of 200 billion yen, and ROA of at least 9%. Additionally, we have added ROE to our target indices. Meanwhile, there will be no changes to the basic structure of VISION 2017, namely a growth strategy that aims for "Securing New Growth in Current Business Fields," "Expanding Integrated Business Fields," and "Challenging New Business Fields."

To explain the revision, on the 26th we held a press conference, and subsequently an IR meeting. I feel that at both events, our policy was well understood and favorably received by participants. The new targets are not easy to attain. However, if everyone in the Sumitomo Electric Group always bears in mind Banji-nissei (Do your sincere best in not only business but also every aspect of your life), shares the courses of action, forms even stronger unity, and proceeds with the tasks at hand step by step, then the path to realizing the new VISION 2017 will be more clear.

SUMITOMO ELECTRIC President CEO Masayoshi Matsumoto

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.

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