December 24, 2008,16:04 +0900(JST) Sumitomo Electric Group Sporting Associations Meeting

Recently we held the Sumitomo Electric Group Sporting Associations Meeting, gathering together the managers of Sumitomo Electric Group’s major sporting associations. Eleven managers, representing associations of such sports as track and field, which I particularly love, baseball, volleyball, tennis and football came from Osaka, Itami, Yokohama, Tokyo and Tochigi where the Group’s main offices and works are located.

I sincerely hope that people at Sumitomo Electric make the most of the Company not only as their workplace but also as a place providing opportunities for sports and other leisure activities for their full self-realization. I believe that engaging in company-based associative activities after work can enhance interpersonal communication, which in turn leads to smoother daily work duties. I also believe that a person’s general sense of happiness and satisfaction can result in better performance at work.

The eleven managers shared with me their associations’ goals, problems they encounter in their activities, what they expected from the Company and so forth. It was a precious opportunity for me to learn firsthand what their daily circumstances were like, including those of the nine-man volleyball club, aiming to be Japan’s best, as I introduced to you in this blog; the track and field club, which had the opportunity to get coached by Mr. Koji Ito on several occasions this year and is expected to do better in the future; and other associations that actively take part in competitions despite their small membership. We were able to directly exchange opinions on their problems, such as training environment (grounds and gymnasiums), members’ reinforcement, and lack of trainers. I hope that it was as significant a meeting for the managers as it was for me.

Many Sumitomo Electric employees lead quite busy lives, juggling work, family life, community life and associative life, using up their after-hour free time and weekends. Still, I think it’s best to be able to do all you want to do in life.

I’d like to do all I can to support the associations’ activities. In return, I expect the managers and athletes to do their best, continuing to improve their skills and techniques and earnestly practicing for great results in competitions.

December 19, 2008,10:15 +0900(JST) Executive training in Ikoma Seminar House

Last weekend, I attended an overnight reporting meeting concluding Sumitomo Electric’s executive training program “Action Learning” at our Ikoma Seminar House. We started the Action Learning in FY 2005 as part of SEI University activities. The previous one was the fourth event. I always look forward to participating in this training program.

Sumitomo Electric’s Action Learning is a practical training for up-and-coming executive directors and unit chiefs selected from within Sumitomo Electric Group. Participants are placed in groups of five or so, all from completely different units and divisions, to work together for six months on a key management theme of current importance. Since the members of each group are usually scattered across the country, besides their regular duties, they work on their theme by teleconferencing or getting together on weekends. This method, which requires close communication among group members who would otherwise have no daily contact through their regular operations, results in strong group solidarity and synergy. This is a major positive effect of the program. Naturally, participants are provided funds to pursue their training activities.

The Action Learning is practical, as I mention above, because, instead of ending up as mere case studies, resultant proposals, if found promising, are further developed and actually integrated into our management measures. Thus far, Action Learning proposals have taken shape as measures for improved manufacturing skills (e.g., opening of the Technical Training Center), enhanced company morale (e.g., Group Global Awards), responsiveness to business environment changes (e.g., opening of the Risk Management Office), and the like. Because of this, people who are given the opportunity to take part in this program appreciate it immensely and do their best. They engage in repeated in-depth discussions on subjects that are not necessarily their area of specialization, tackling them from fresh perspectives, and eager to present original proposals to top management including myself. I always take pleasure in receiving proposals because of their unique and insightful quality.

A scene from the Action LearningIn the last training program, groups worked on such permanent management challenges as measures responding to global warming, marketing and sales reinforcement and actions for total cost reduction; themes on new business and new territories such as African business and life sciences; and the creation of new added value accompanying the business plan “VISION 2012” as envisaged by each unit, by way of reviewing the current management orientation and challenges. Attending the final reporting meeting offers a chance to hear all the groups present their proposals on these themes that they have elaborated from their own standpoints, and I expected much from them.

Unfortunately, I can’t reveal here the detailed contents of the reporting meeting. Let me just say that I felt that the discussions I participated in over the two days were truly meaningful and rewarding. Particularly numerous and outstanding proposals were presented on the theme of creating new added value accompanying the business plan “VISION 2012” as envisaged by each unit, by group members representing different areas, and maintaining objectivity about the different units’ visions.

Listening to other people at such meetings is extremely helpful since well-presented views enable me to better organize and clarify my own general ideas on certain subjects that I mentally keep on a daily basis. This allows me to further develop and elaborate these ideas. I also requested concerned executives, while still in the meeting, to more deeply examine such views and proposals.

Sometimes, we receive unusual and somewhat eccentric views as well, but I don’t discourage them because technological and business breakthroughs often result from such novel viewpoints. So I treasure them as possible catalysts for new business development and ask relevant divisions or units to study them from an expert standpoint.

The reporting meeting during the day was, as I said, truly meaningful and rewarding, and the evening session was equally so, in which all participants, having completed absorbing discussions, pursue more relaxed and friendly interaction with each other while enjoying drinks. It is on such occasions that I strongly feel that as long as we put our resources together, talk things through and fortify our solidarity, we can overcome any hardships together, despite the severe business environment that is so drastically different from last year’s. Thoroughly reenergized, I gained further optimism for the future.

December 12, 2008,09:22 +0900(JST) Sumitomo Electric Osaka Volleyball Club’s Victory in Sakurada Cup

(From left) Mr. Kishimoto (team member), Mr. Miyake (manager), me, Mr. Azuma (team member), Mr. Ikenoue (team captain), and Mr. Goto (coach)Today I’d like to tell you about the nine-man volleyball team from Sumitomo Electric’s Osaka Works, which recently won a nationwide competition, and the visit the team’s manager (Mr. Miyake), coach (Mr. Goto), captain (Mr. Ikenoue) and two members (Mr. Azuma and Mr. Kishimoto) -- all full-time Sumitomo Electric employees -- paid me to report on their victory. As you can see in the photo, they soar high above me, some measuring well over 190 cm. So they already stand out in their workplaces. I had first wondered if they were feeling nervous about meeting me in person, but they looked confident when talking with me, and so I was assured.

Allow me to do a little bit of PR for Osaka Works’ volleyball team. The team’s latest victory took place in the 23rd Sakurada Memorial Corporate Team Tournament (Sakurada Cup), held on December 6 and 7 in Nagaoka City, Niigata Prefecture, north of Tokyo. The Sakurada Cup is one of the four major all-Japan nine-man volleyball competitions: the Corporate Team Championships in July, the National Sports Festival in October, the All-Japan General Championships in November, and the Sakurada Cup, which concludes the season in December. This was the team’s first victory in a nationwide competition since the All-Japan General Championships in 2006 and the tenth Sakurada Cup won. The happy news was indeed long awaited. I’m proud to say that Osaka Works team is among the best in Japan in nine-man volleyball. For ten years from 1997 to 2006, the team won at least one of the four major competitions each year. Last year, however, they were unable to win any title, and their glorious record had to stop. I was told that at the end of last year the team manager and the captain felt so responsible for the poor performance that the two were thinking of quitting. Then this year they renewed their resolve and engaged in strenuous training, fortifying themselves anew physically and mentally and working on their teamwork. They finally succeeded in coming out of their frustration in the year’s final competition. The team was extremely happy.

Pleasant conversation surrounding the trophyI wrote above that the Sumitomo team is among the best in Japan; in fact, it may be among the best in Asia, for after winning the Sakurada Cup three years ago, the team represented Japan and won the Japan-Korea match held in Korea in April 2006. I believe, in my own rather optimistic way, that our team would be among the best in a worldwide nine-man volleyball competition, as well.

Since team members are not professional volleyball players, they work regularly just like other employees and practice after the day’s work or on weekends. Some of them are on night shifts sometimes and start their work after practicing in the late afternoon. I feel almost awed by the great care they must be taking of their physical conditions to be able to do this. At the same time, what they do corresponds well to what is written in the Sumitomo Business Spirit, the concept of “giving your very best in all sincerity.” Sumitomo members are expected to do this at work and in daily activities. So I feel reassured that the team’s recent victory is in some way a result of their acting out the Business Spirit.

Due to the current sluggish economy, we have not had much cheerful news recently. Because I look at myself as an active athlete too, I truly appreciated the good news of the volleyball team’s achievement and enjoyed meeting with and congratulating them, all attempting to excel both in sports and in work.

December 4, 2008,08:45 +0900(JST) Financial Results of the First Half and IR

As already publicly notified, on October 31 we announced the Sumitomo Electric Group’s financial results for the first half of the fiscal year ended March 31, 2009. Regrettably, this half-year registered the first income drop in six years from the same period last year. Among the half-year’s target figures announced at the beginning of the year, the operating income was the only item we were unable to realize.

A scene from the IR meetingNevertheless, we had already revised our year-long prospects for the FY downwardly from the original forecasts announced at the beginning of the year, both in terms of sales and net income. In other words, we also expect, unfortunately, that our second half-year performance will decline.

One month has passed since this announcement. During this time, the political and socioeconomic situations that surround us have completely diverted from the general tendency of growth and expansion that had continued until the previous fiscal year. We can now safely say that the whole world has now entered a period of recession.

Since the U.S. subprime loan crisis began last autumn, I repeatedly expressed deep concern that the U.S. financial crisis might have a grave impact on the real side of the global economy. Unfortunately, this has become a reality, in the shortest period of time and following the worst possible scenario.

Under these circumstances, the Sumitomo Electric Group is also in a critical situation. It is becoming difficult to attain our publicly announced year-long performance figures. We must overcome this challenging time with the best possible effort by every single member of the entire Sumitomo Electric Group, by focusing for now on corporate constitutional reinforcement.

Our regular IR meeting for analysts was held as usual at our Tokyo head office. Once again I would like to thank the many people who came to the meeting.

The IR meeting proceeded as follows: I presented the financial results of the first half and future prospects, with reference to the mid-term business plan “VISION 2012”; Mr. Hideaki Inayama, Managing Director in charge of accounting, gave additional comments on the financial results; and Mr. Shigeru Tanaka, Managing Director and head of the Infocommunications & Systems Business unit, gave a presentation about the unit’s current situation and strategies as a topic concerning the Sumitomo Electric Group.

Despite various challenges, the business segment represented by the Infocommunications & Systems Business unit has great potential for future growth and development. Its signs are already visible at present. Some products and technologies have already triggered business opportunities and inquiries from prospective customers. We are working hard to realize early expansion and growth of the segment as the Sumitomo Electric Group’s pulling force for the moment, so that it will have attained a substantial scale at the time VISION 2012 is achieved.

In the question-and-answer session of the IR meeting, we received many questions from analysts. Needless to say, their questions, based on their own detailed analyses, were extremely precise and penetrating, about how we position ourselves amid the ongoing worldwide recession and what appropriate measures we are devising. In our previous IR meetings, we would always answer questions with optimism and confidence. Given the present situation, however, we were tempted to give some hesitant and even somewhat pessimistic answers. To be honest, we found some questions particularly difficult to answer because of the present environmental uncertainties. Still, true to the Sumitomo Business Spirit, without evasion we did our best to give the most sincere and honest answers we could.

You can view our FY 2008 1st half results here.

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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