May 28, 2012,13:00 +0900(JST) Completion of Y-Y (Wai Wai) Terrace, a commemorative project of Yokohama Works' 50th anniversary


  On April 24, I attended a ceremony to celebrate the completion of our Yokohama Works' new welfare facility, Y-Y Terrace, for employees. Sumitomo Electric had implemented the construction project as part of commemorative events to celebrate the 50th anniversary of the Works' founding.


竣工式の様子


  Yokohama Works is located in a nature-rich environment in the southern part of the city of Yokohama. It is also conveniently situated near Kamakura, one of the most well-known tourist destinations in Japan. Its premises stretch along the Japan Railway Tokaido Line, covering an area approximately 17 times larger than that of Yokohama Stadium. Across the vast land are about 40,000 trees, including cherry, zelkova, azalea and ginkgo, presenting different vistas of scenic beauty for each season.


  Yokohama Works was established in May 1961 as Sumitomo Electric's first manufacturing base in the Kanto region in order to better serve our customers. Last year marked the 50th anniversary of its founding.


  Today, Yokohama Works is a major manufacturing base for information and telecommunications products, including optical fiber cables, optical connectors, optical fiber fusion splicers, and optical and electronic devices. The facility also serves as a world-leading R&D base in this field.


  The name of the facility, "Y-Y Terrace," was chosen from entries from employees. "Y" is the first letter of Yokohama Works. The pronunciation "wai-wai" is a Japanese onomatopoeia used to describe lively action or sounds. The facility was named in the hope that it will be a place where employees can enjoy cozy discussions. On the first floor are a health service center, convenience store and multi-purpose room. On the second floor is a spacious cafeteria with seating capacity for 1,400 people, where employees can dine a la carte. With large windows, the cafeteria commands a splendid view of cherry trees outside. In spring, diners can enjoy cherry blossom viewing while eating.

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  Yokohama Works was founded as an innovative, modern plant that will serve as a pioneering model for other plants of Sumitomo Electric. The facility has since developed and produced the world's most advanced optical fibers and devices and many other products. I hope that all members at Yokohama Works will work cheerfully and energetically to achieve further growth over the next 50 years.


  On the premises of Yokohama Works, Sumitomo Electric has recently constructed a large-scale power generation/storage system, planning to start the demonstration in July. This system consists of in-house developed concentrator photovoltaic (CPV) units (maximum total power generation: 200 kW) and a redox flow battery (capacity: 5 MWh).


  To meet society's needs for efficient energy use, Sumitomo Electric continues its research and development of technologies for effective power conversion/control and generation/storage.


  Reference: Press release on "Demonstrating Megawatt-Class Power Generation/Storage System at Yokohama Works"

May 28, 2012,11:00 +0900(JST) Business Results for Fiscal 2011


  On May 11, Sumitomo Electric announced its business results for the fiscal year 2011 (ended March 31, 2012).


  During the year, the business conditions continued to be very severe, affected by many adverse factors, including the Great East Japan Earthquake and tsunami in spring, severe flooding in Thailand in the fall, the unprecedented appreciation of the yen, and power shortages.


  Under these circumstances, Sumitomo Electric quickly restored production lines stricken by the earthquake, and strengthened its marketing and production structures in order to meet increased demand after the earthquake. Moreover, we focused on identifying global demand, implementing thorough cost reductions, development of new techniques and products, and an expansion in sales.


  Although consolidated revenues for fiscal 2011 increased from the previous year, profits decreased, mainly due to the decline in the operating rate in the first half of the year as a result of the earthquake. The main results were: net sales of 2,059.3 billion yen (+1%), operating income of 86.9 billion yen (-16%), ordinary income of 106.7 billion yen (-17%) and net income of 58.9 billion yen (-17%). We could not achieve the announced forecasts for the first time in 10 years except for fiscal 2008 (due to the Lehman crisis).


  However, in the second half of the year, we recorded growth both in sales and profits, exceeding those of the same period of the previous year. In particular, the net sales of 597.5 billion yen and operation income of 40.7 billion yen recorded in the fourth quarter were among the greatest ever, considering the appreciation of the yen to 80 yen to the dollar.


  We announced the following forecasts for fiscal 2012: net sales of 2,200 billion yen, operating income of 110 billion yen, ordinary income of 130 billion yen and net income of 70 billion yen.

  Considering the steep appreciation in the value of the yen and the increase in overseas sales, we set an operating income target of 135 billion yen, by converting the target set for VISION 2012 (210 billion yen) at the current exchange rate. We will diligently strive to achieve this target.


  Dividends for fiscal 2011 are 19 yen per share, which is as originally planned at the beginning of the year and the same as that of the previous year. We announced that the annual dividend forecast for fiscal 2012 (ending March 31, 2013) is expected to be 21 yen per share; both the interim and year-end dividends are expected to increase by 1 yen.


  Looking to the global economy in fiscal 2012, there is still a great amount of turmoil in Europe regarding government debt, and it is also of concern that the prices of materials and energy will increase due to the growing tension in the Middle East. In Japan, the business environment is expected to become more severe, with concerns for acceleration of the hollowing-out of domestic industry.


  With the goal to establish a robust corporate structure that can withstand any severe business environment, we will implement safety and environmental measures as well as quality improvement and cost reduction measures. We will also increase the number of business sites in emerging countries so that we can better response to demand in growing markets. We will also improve and strengthen our R&D function and make unified efforts throughout the Group in order to create new products and technologies in areas with strong social needs, and promote their early introduction to the market.


  In fiscal 2012, we will totally commit ourselves to the achievement of good results in the last year of VISION 2012, our medium-term management plan. Your continued support and encouragement will be most highly appreciated.

May 18, 2012,13:50 +0900(JST) About SWPC


 I would like to provide a briefing about Sumiden Wire Products Corp. (SWPC), the venue of the North American Top Executives’ Conference.


New bypass over Hoover Dam SWPC was established in 1979 as our first U.S. manufacturing subsidiary. Featuring plants in California and Tennessee, the company currently manufactures and sells prestressed concrete steel materials for buildings, bridges and other structures, as well as stainless steel wire for springs used in automobiles and other items.


 SWPC’s prestressed concrete steel materials are being used as reinforcement for the new Bay Bridge, which is now under construction to connect San Francisco and Oakland, and for the new bypass over Hoover Dam, which is located near Las Vegas and well-known even in Japan. The company’s stainless steel materials, on the other hand, are used for strengthening all river banks along the Mississippi River. Thus, the company’s products support U.S. infrastructure.


Giving a toast wearing a cowboy hat Consisting of approximately 100 staff members, SWPC is a medium-sized company. SWPC’s two young American general managers have been working for the company since graduating from university. They participated in Action Learning, a management executive seminar held by SEI University. It seems that they firmly follow the Sumitomo Spirit and greatly contribute to the establishment of relationships of trust with customers. Also, there are many staff members who have been working for SWPC since its foundation. These members are called “79er’s,” making me realize again that such members with high loyalty serve as the cornerstone of the Sumitomo Electric Group.


 During this business trip, I stayed in Nashville, which you may probably know as the city of country music. One of the city’s major industries is guitar production. SWPC also sells nickel steel wire, which is used as guitar strings. This indicates that the company plays an important role in promoting U.S. culture. SWPC gave me a cowboy hat as a gift to commemorate my visit to the company.


I would like to conclude today’s blog by expressing my appreciation to Mr. Yuichi Sano, SWPC President, and other SWPC executives for giving careful consideration to the organization of the conference. As the company in charge of arranging the conference, SWPC certainly extended some fine Southern Hospitality (U.S. southern style of warm hospitality to visitors). I wish you all continued good health and prosperity.


With SWPC personnel

May 16, 2012,13:20 +0900(JST) North American Top Executives’ Conference and the 25th Anniversary of U.S. SEWS (2)


Group photograph taken at the entrance of SWPC This year’s North American Top Executives’ Conference included an inspection of Sumiden Wire Products Corp. (SWPC; Dickson, Tennessee), a company that manufactures and sells prestressed concrete steel materials and other products, making the conference even more significant.


The previous conference was held in 2008 at Sumitomo Electric Semiconductor Materials, Inc. (SESMI; Portland, Oregon), a company that manufactures and sells compound semiconductors. This means that the conference was held for the first time in four years.


Planting a Japanese flowering cherry tree to commemorate the conference At the conference, each of the participants presented a detailed explanation of his company’s business performance, enabling us to share their challenges fully and mutually. Meanwhile, the conference included a seminar for the top executives to learn more about countermeasures against legal risks related to commercial transactions and about Global Human Resource Management (HRM) Policy.


Many of the local management staff had participated in a management executive seminar and a global leadership program held by SEI University. They were conversant with the actual conditions of their parent company and well aware of the problems surrounding them, which made me feel truly strong. Also, active discussions were held, in which some participants voluntarily proposed making cross-sectional efforts to solve the problems shared by our group companies in North America. I wish for the further prosperity of each company.


(*1) Sumiden Wire Products Corp.
(*2) Sumitomo Electric Seumiconductor Materials, Inc.

May 15, 2012,18:00 +0900(JST) North American Top Executives’ Conference and the 25th Anniversary of U.S. SEWS (1)


 From April 16 to 17, I visited the U.S. for the first time in a year.

 
Delivering a speech at the banquet The purpose of the visit was to inspect the main plants (Scottsville and Edmonton) of Sumitomo Electric Wiring Systems, Inc. (SEWS), which manufactures and sells wiring harnesses, and to attend an event to celebrate the 25th anniversary of the company’s establishment, as well as to participate in the North American Top Executives’ Conference comprising the top management of approximately 20 group companies in North America and Tokai Rubber Industries, Ltd., and to exchange opinions under the theme of the current status and challenges of management.


 SEWS experienced many difficulties due to the decline in operations of customers affected by the earthquake and tsunami of March 11, 2011 and the severe flooding in Thailand. Nevertheless, SEWS worked very hard in the latter half of the fiscal year and managed to accomplish business results that could be regarded as almost satisfying. As the President and CEO of Sumitomo Electric, I expressed my sincere appreciation to everyone for their superb commitment to the Group.


Bonsai as a memento


 The Sumitomo Electric Group has established more than 100 automotive wiring harness companies so far throughout the world. Among them, SEWS is the largest company with a long history. At the 25th anniversary event, I met a number of staff members who have been working for SEWS as managers or on-site supervisors for 25 years since the establishment of the company. I presented a commendation and a memento to each of them and conveyed my appreciation for their splendid commitment and loyalty. The memento was an elegantly-shaped bonsai (potted dwarf plant). Their partners were also invited to the event, which pleased them very much.


Although my staff had spent much time preparing a speech draft for me, I made my closing speech with the draft in my pocket and spoke spontaneously about what came into my mind. Of course, I did not mean any harm. The banquet was so enjoyable and pleasant that I just enjoyed drinking a little too much. I feel sorry for not making good use of the draft. The banquet concluded by my expressing hope for the further prosperity of SEWS and the health of all those related to the company. I hope that the company will continue doing its best.


With the attendees of the banquet


(*) Sumitomo Electric Wiring Systems, Inc.

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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