June 29, 2012,17:41 +0900(JST) IR Meeting

On May 25, following the announcement of Sumitomo Electric's business results, the regular IR meeting was held at our Tokyo Head Office, at which we were happy to welcome the participation of more than 100 institutional investors. I would like to thank each and every investor for taking the time to join us, and also would like to apologize for having to leave the session early.

From the third week of May and on, the French presidential election, the Greek legislative election and subsequent issues including financial reform, and other factors have reignited the European credit uncertainty, causing a downturn in the marketplace. It is precisely due to this situation that I knew I needed to convey my thoughts and policies as the president of this company.

During the session, I was able to present the key points of the FY 2011 performance, the FY 2012 forecast, and future efforts by each segment in about 20 minutes or so, and also held a candid, if brief, Q&A session.

During PresentationTaking into account the significant changes in the surrounding environment, including the changes to exchange rates that have occurred since determination of VISION2012, the final numerical goal of 210 billion yen in operating income was converted in accordance with current exchange rates as 135 billion yen; we feel that achievement of this new goal equals the achievement of VISION2012. In actuality, dollar-based overseas sales have grown at a steady pace, and were at a record high in FY 2011.

In addition, although we were unable to achieve the goals announced at the start of the previous year, we are determined to avoid two consecutive years of falling short. The achievement of the figures announced for this year, i.e. 2.2 trillion yen in sales and 110 billion yen in operating income, is an absolute must, and our determination to strive to the end for achievement of VISION 2012 is very strong.

Answering a questionIn the automotive, electronics, and industrial materials sectors, our global customer bases are expanding. We intend to continue fortifying our global network, and at the same time, commit ourselves to speedy commercialization of new products and technologies, including superconductive cables and batteries, in the fields of environment, resources and energy.

Also, to accommodate the needs of the growing markets in emerging economies and other regions, 40% of our 160-billion-yen capital investment for this fiscal year will be actively invested overseas. The allocation for R&D is planned to be 93 billion yen, the highest ever, in order to pave a smooth path for our future business expansion.

As of now, the most difficult issue is the field of information and communications. This field is "high-tech," and short product cycles, wildly fluctuating needs, currency issues and other factors make it a bane for many companies, including ours. However, we are planning bold structural reform for this fiscal year.

We aim for a performance that is worthy of the final fiscal year of VISION 2012 and meets the expectations of our stakeholders. Your continued support and encouragement will be most appreciated.

For those interested, presentation materials used in the meeting are available on our website.

■Presentation Materials

June 26, 2012,10:44 +0900(JST) NSS New Plant Activation Ceremony & Shibazakura Festival (2)

On Sunday, May 27, Shibazakura (moss phlox) Festival, an annual event, was held. First launched in 1990, the 10th anniversary of the establishment of NSS, the festival is held jointly by NSS and Hokkaido Electric (HKE), with the cooperation of Naie Town, Naie Chamber of Commerce and Industry, Hokkaido Hokkoh Transportation Inc., Nikken Tool Company, and New Naie Hot Spring Hotel Kitanoyu. Today, the festival has grown to become one of the largest events in the town.

主催者勢ぞろい blog_img120507_03.jpg

This year the festival featured a wide variety of fun programs, as usual, such as a Japanese drum performance of Hokkai Warabe Taiko, a rock-paper-scissors competition, a music performance by the brass band club of Naie Junior High School, a dancing performance by first-grade students, a yosakoi dance performance, a mochi-maki (rice cake scattering) ceremony, and a raffle.

This year's festival was attended by Hokkaido Prefectural Governor Harumi Takahashi. At Shibazakura Festival, she delivered a congratulatory address, and served as the presenter of a gold medal to Junior, the rescue dog that had snuggled against a three-year-old girl all through the night in freezing temperature in a car that had rolled over after an accident last November.

After the festival, she visited the new plant of NSS.

The total number of employees of NSS and HKE is approximately 600. I hope that they will continue to contribute to the development of Naie Town, Hokkaido, Japan, and the world.


Website of Hokkaido Electric (Japanese Only):http://hokkaido-denki.co.jp/

June 25, 2012,18:00 +0900(JST) NSS New Plant Activation Ceremony & Shibazakura Festival (1)

On the afternoon of Saturday, May 26, an opening ceremony for the new plant of Hokkaido Sumiden Precision Co., Ltd. (NSS) was held, attended by residents of Naie Town, home to NSS, and those who contributed to the construction of the plant.

At the ceremony, NSS President Masuo Chudo gave an outline of the new plant, and Naie Town Mayor Ryoji Kita delivered a congratulatory address on behalf of all guests.

The total investment in NSS has exceeded 30 billion yen so far. In my congratulatory address, I referred to what I expect of the company.

Characterized by super-effective production lines, the new plant seeks to eliminate in-process inventory not only by featuring IT automation but also by realizing complete flow production through integrating a series of processes. The plant is the very result of the company’s efforts to save as much manpower as possible and to formalize implicit knowledge.

After listening to an explanation by a staff member of the plant, I turned on the activation switch for the lines. Then, all the lines, which had been inactive, began to operate as if life had been breathed into them.

After the inspection of the plant, we had a group photo taken in front of the new plant. The new plant has embodied the consideration for an increase in not only efficiency, but also safety and operational ability, in order to create a manufacturing environment comfortable for workers at the plant. I hope that the plant and the local community will enjoy prosperity by producing many products to be dispatched all over the world.

After the ceremony, I visited a plant of Nikken Tool Company (NTC), which is located next to NSS and cooperates with work. NTC is expanding its business steadily and has newly established a dormitory for unmarried employees and a cafeteria. A photograph was taken in front of the monument at the company.

The message inscribed upon the monument well describes the philosophy of President Toshiyuki Narita, who respects the idea of trust in a relationship.

Website of Hokkaido Sumiden Precision Co., Ltd. (Japanese Only): http://www.nnss.co.jp/hokkaido/
Press release on the new plant: http://global-sei.com/news/press/12/prs058_s.html

June 22, 2012,11:10 +0900(JST) Cherry blossom news from Morocco

We have received wonderful news from Morocco.
The cherry tree planted last May at the Kenitra Plant in commemoration of the tenth anniversary of the Morocco business bloomed back in April. The news came with the comment “this is a belated news of the cherry blossoms.”

Cherry blossoms

The reassuring message from Morocco said, "With a climate different from Japan, and with an especially dry year, we were worried that it had died. We were unsure if cherry trees could grow in Morocco, or if it could withstand such an abnormal climate... In all honesty, we thought it may not survive, but our wishes came true with the blooming of such pretty flowers. We will follow the example of this cherry tree and strive to spread our business roots firmly into the grounds of Morocco."

The Moroccan business currently comprises seven plants and approximately 15,000 employees, and it is a linchpin of our group's European wiring harness business.

We wish health and prosperity for those working in Morocco, away from family and friends in a foreign land, and hope that they may, like the cherry tree, develop strong roots and bloom beautifully.

June 11, 2012,10:15 +0900(JST) Attending the 59th IWCC General Assembly/Joint Meeting (3) (Phoenix, Arizona, U.S.)

Phoenix, the capital of Arizona, lies in a desert area surrounded by rugged mountains, as if the city had sprung up suddenly. On this land the Hohokam people (ancient American Indians) built canal systems to irrigate their fields. Then, in the 1450s, the Hohokam disappeared, but later, in the 1860s, the ruins of the canal systems were excavated and began to be used again for farming. The pioneers named the town Phoenix, hoping that this area would prosper again out of the ruins of the Hohokam civilization.

Sedona scenery

About a three-hour drive from Phoenix there is Sedona, a picturesque city surrounded by large canyon walls and red-rock monoliths. Prehistoric Native Americans would often visit here to perform religious rituals, weddings and other ceremonies. To this day Sedona has been revered as a holy place.

RopingIn the breaks in the program of the Joint Meeting, I visited this “power spot.” The magnificent red rock sandstone formations are surrounded by pristine forests of low trees and bushes that grow on arid land. Sedona offers striking natural beauty that cannot be seen anywhere else in the world. Called “Red Rock Country,” the Sedona area is the most popular tourist destination in Arizona, second only to the Grand Canyon.

At lunchtime during the tour, I enjoyed roping, cowboy style. Do you think I am a good roper?

-	Former President Bush and meScottsdale, a neighboring city of Phoenix, is home to some of the finest golf courses in the U.S. I am sure you know of the city, since the Professional Golfers’ Association Championship, one of the four major golf tournaments, is held here. Since we were in the city, we also visited the renowned TPC Scottsdale Golf Club.

With the golf course in the background, I had a photo taken with former President Bush, who delivered a speech at the IWCC welcome reception.

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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