December 28, 2012,17:34 +0900(JST) Attended the Opening Ceremony of Our New Company Sumiden Hyosung Steel Cord (Thailand) Co., Ltd. (SHST)

Leaving Osaka on November 1, I visited Thailand to attend the opening ceremony of our new company, Sumiden Hyosung Steel Cord (Thailand) Co., Ltd. (SHST), although it was just a short stay of three days and one night.

The opening ceremony was held on November 2 with splendor. Approximately 150 persons were invited to the event, including those who are from the government of Thailand, the Japanese Embassy, the public corporation for development in Thailand, our business partners, and many other people who have cooperated in the establishment.

On the day of the event, the weather was very fine without any clouds. At the ceremony, held in a Buddhist style, nine priests recited Buddhist sutras and prayed for the development of the new company.

Ceremony held in a Buddhist styleRibbon-cutting

We have a long history of operating businesses in Thailand. In 1969, we established a magnet wire manufacturing company, and now we have about 20 companies operating in Thailand, contributing considerably to the development of the country.

Even after being struck by the flooding last year, Thailand still boasts an incredibly active economy. Construction work is observed almost everywhere in the country, and in Amata City Industrial Estate, where SHST is located, expansion construction projects are being carried out one after another. I'm really envious of this situation.

After the opening ceremony, I visited Sumitomo Rubber (Thailand) Co., Ltd., the tire manufacturing and sales company located next to SHST, as well as Sumitomo Electric Wiring Systems (Thailand) Ltd. (SEWT) and SEWS-Components (Thailand) ltd. (SEWS-CT), which manufacture and sell wiring harnesses, and electric wire parts and products. I was very satisfied to see that their businesses have been expanding steadily and all the staff members were working vigorously.

With staff of SEWT and SEWS-CT

Subsequently, I attended a party held in Bangkok with senior members of our group companies in Thailand. The party served as a good opportunity to exchange many invaluable opinions, making my business trip to Thailand even more significant. I hope that they will achieve further development. Khob khun Krab (thank you very much)!

With senior members of our group companies in Thailand

December 28, 2012,17:31 +0900(JST) Business Results for the First Half of Fiscal 2012

On October 31, we announced our business results for the first half of fiscal 2012. In this half-year, although there was a recovery in production among Japanese automobile manufacturers, the domestic market was sluggish, especially in the fields of communications and electronics. On top of that, export profits deteriorated due to the yen’s appreciation and the decrease in momentum of the EU and emerging economies, making our business environment still more severe.

Under such circumstances, we made utmost efforts to enhance our marketing, reduce costs, develop new technologies and products, and expand sales. This has led us to results as follows: sales of 1042.8 billion yen, operating income of 34.7 billion yen, ordinary income of 41.5 billion yen, and net profit of 15.8 billion yen. Compared with the same period last year, although there is an increase in sales, operating income, and ordinary income, there is a decrease in net profit. As for the target figures for this period announced in May this year, although we achieved the sales target, we fell short of the targets for operating income, ordinary income, and net profit.

We are concerned that in the second half of fiscal 2012, the economies of the U.S. and Europe will continue to be sluggish and the growth of emerging economies will slow down due to the decrease in exports. As for the Japanese economy, no optimism can be warranted regarding trends in China, which has been increasing its presence both as a production center and also as a market. Additionally, there is concern over a decline in domestic demand, owing to the weakening of the effects of political measures and the downturn in demand for restoration efforts from the Great East Japan Earthquake.

With consideration given to these circumstances, we have revised our projected business results for the entire fiscal year as follows: sales of 2100 billion yen, operating income of 87 billion yen, ordinary income of 100 billion yen, and net profit of 45 billion yen. As we announced at the beginning of the year, the interim dividend is 10 yen per share and the annual dividend is 21 yen per share.

In the midst of this severe situation, I believe that it is important to respect the basics and remain very attentive to everything around us in order not to miss any business opportunities. Explaining our business results to our group managers, I urged them to call on all their subordinates in the group once again to further reinforce SEQCDD (Safety, Environment, Quality, Cost, Delivery, and Research & Development), demonstrate full commitment to compliance, and improve their ability to deal with change.

We look forward to your continuous cooperation and support.

December 13, 2012,09:10 +0900(JST) Sumitomo Athletics Festa

On October 21 (Sunday), Sumitomo Athletics Festa was held at the Sumitomo Multi-Purpose Sports Field in Itami, Hyogo (under the auspices of Sumitomo Electric Industries, Ltd., Sumitomo Multi-Purpose Sports Field Management Committee, and Sumitomo Realty & Development Co., Ltd.) This was an event to celebrate the renovation of the athletics track at the sports field, which I have described before on this blog. On that day, under a clear, cloudless sky and a warm autumn sun, the event attracted many local residents and athletics fans.

The event consisted of three parts. In the first part, an athletics workshop was given by Mr. Koji Ito (associate professor at Konan University and the Japanese men’s 100-meter record holder) and other instructors for elementary school students and junior high school students. A relay was also run by elementary school students selected from Hyogo Prefecture.

Mr. Masashi Eriguchi (center, Osaka Gas Co., Ltd.) giving instructions on stretching exercise

In the second part, a meet was held with the aim of breaking some of the Japanese records (under the auspices of the Kansai Industrial Track and Field Association). The event drew around 180 athletes, including many Olympians. Although unfortunately no new Japanese records were set, excited spectators watched the heats involving the top Japanese athletes closely. Of course, our athletics club members also did their best.

Ms. Ayako Kimura (left, Edion Corporation) running with all her might in the 100-meter hurdles

In the third part, 200 elementary and junior high school students ran 2,000 meters together with the Olympians Ms. Mizuki Noguchi (Sysmex Corporation), Ms. Kayoko Fukushi (Wacoal Corporation), Mr. Ryo Yamamoto (Sagawa Express Co., Ltd.), and Ms. Ryoko Kizaki (Daihatsu Motor Co., Ltd.). After the end of the third part, children crowded around the athletes to ask for their autographs and photographs. What impressed and pleased me was the way that the athletes always met these requests with a smile.

From left: Ms. Fukushi, Ms. Kizaki, Mr. Yamamoto, and Ms. Noguchi giving an interview

Thanks to the efforts of the participating athletes, people involved in track and field sports, our athletics club members, and our Itami Works staff, the event served as the perfect occasion to unveil our new athletics track. I believe that all the spectators and all the participating children were really happy with the event.

I would like to express my appreciation to all those who worked hard to make the event a success.

December 12, 2012,09:00 +0900(JST) Invited to a Gala Dinner at the London Metal Exchange (LME)

I was invited to a party held at the Grosvenor Hotel in London on October 16 to bring together people from all over the world engaged in non-ferrous metal trading. The venue was full with 2,000 guests in evening dress. This dinner party is one of the largest events held by the 135-year old London Metal Exchange (LME). One of the highlights of the party was the humorous speeches delivered by the LME Chief Executive and former U.K. cabinet members.

Invited to a Gala Dinner at the London Metal Exchange (LME)

I was invited to this year’s party as Chairman of the International Wrought Copper Council (IWCC). Sitting at my designated table, I shared a toast together with leaders of the non-ferrous metal industry. We enjoyed talking about various topics from the world situation to sports, especially the London Olympics. The evening was so enjoyable that we almost lost track of time.

The principal feature of this year’s party was the speech given by the Chief Executive of Hong Kong Exchanges and Clearing Limited, which purchased LME at the exceptionally high price of approximately 170 billion yen. He explained the purpose and circumstances surrounding the purchase in English first and then in Chinese. However, what he said was a little confusing, and some of the people around me looked bewildered.

Since a simple assessment indicates that it will take at least 100 years to recover their investment, the purchase is not viable in the normal business sense. It is important to understand the true purpose of the Chinese government and how the global rules on non-ferrous metal trading will change in the future.

December 11, 2012,13:45 +0900(JST) Business Trip to Chicago

During my business trip to Chicago, I also visited some of our group companies engaged in the hard-metal business.

First, I visited Sumitomo Electric Carbide Manufacturing, Inc. (SCM), a company manufacturing cutting tools in Wisconsin.

At SCM’s signboard

I took the road from Chicago to Wisconsin. This was the route I used to drive for five years from 1973, when I was in the U.S. selling cutting tools. The road looked magnificent under the autumn leaves. According to a local staff member who accompanied me to SCM, it is the best season to view the countryside.

After inspecting the SCM plants, I returned to Chicago to visit Sumitomo Electric Carbide, Inc. (SCI), a sales company.

At both companies, I encouraged staff members to become sensitive to daily changes in the business environment, and not to hesitate to propose new ideas to expand our businesses.

On this business trip I stayed in the River South area, which had changed a lot from when I lived in Chicago. I was surprised to see that the city, including Millennium Park, has become even more beautiful. This made me realize once again that nearly 40 years had passed, and that a city is also a living entity.

With members of SCI

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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