April 20, 2012,13:48 +0900(JST) Further SEQCDD improvements needed as we start the final fiscal year of Vision 2012.

On the morning of April 2, the first day of fiscal 2012, I delivered a message to all employees. In the message, I clarified issues to be tackled to improve safety, the environment, product quality and office work quality, the areas that form the foundation of our corporate activities.

Unfortunately, there is no quick way or magic bullet to reinforce these aspects of business. It is important to continue making our utmost efforts to do the small tasks. That is why, as the head of the Company, I have reiterated my request to all employees when the occasion arises.

Regarding safety, I requested that managers exert leadership and ensure participation of all employees. I called for thorough implementation of risk assessment by expanding the scope to include equipment safety, promotion of SEQCDD activities on a global scale, and development of key persons. I also urged employees to reaffirm the importance of protecting themselves.

As for the environment, I stated that energy conservation is one of our key management issues. Our efforts to thoroughly eliminate loss will lead to environmentally friendly manufacturing.
Quality must be ensured in terms of both production and office work. I ask all employees to make sure that everything in their respective facilities is perfectly in order. It is important to promote such quality activities as well as a quality audit system on a global scale.

In the closing of my message, I talked about the SWITCH Plus Campaign. This campaign has been launched to pursue a better balance between work and private life and to address mental health issues, aiming to create a workplace where all employees can work more actively and cheerfully. I encouraged all employees to work autonomously at their respective workplaces and positions, keeping in mind the request I made to them at the beginning of this year: “to believe in your dreams and stay cheerful, energetic and happy.”

October 26, 2011,09:00 +0900(JST) Welcoming New Sumitomo Electric Members

Delivering a letter of appointmentOn the morning of October 3, we held ceremonies to welcome and encourage new recruits joining Sumitomo Electric this autumn. In the evening of the same day, we held a reception with students who will join Sumitomo Electric next spring.

Despite the cloudy weather, the morning sessions had a refreshingly dignified atmosphere, in which I delivered letters of appointment to 28 new recruits.

In my congratulatory address, in view of the currently uncertain business environment, I made the following three requests to the new members, by way of expressing my expectation and encouragement to them:

- Master the basics of work, and follow them conscientiously
- Place importance on communicating with others
- Develop the ability to think from several different perspectives

Giving congratulatory address to new membersBut what the new members must do first and foremost is to adapt to the new environment and lifestyle. I hope that the new recruits will actively get to know the people around them, build close relationships that will function as the basis of their life at the Company, and grow into full-fledged, trusted members of Sumitomo Electric. I also wish to see our new members enjoy rewarding careers, while taking good care of their health and safety.

In the evening, at the welcome reception for the 135 new recruits who plan to join Sumitomo Electric next spring, participants broke up into groups here and there, talking cheerfully about various subjects. Speaking with those young people, who will lead Sumitomo Electric Group’s future businesses, filled me with energy and enthusiasm.

Finally, here is my message to the future leaders of Sumitomo Electric: while you will be kept busy until graduation as you must complete your graduation theses or research projects, I hope that all of you will spend these last months of your student life in a meaningful way. I look forward to seeing you again in good health and high spirits in April 2012, at your company entrance ceremony.

October 21, 2011,09:09 +0900(JST) Chinese G-katsu Winner Teams in Japan

 The other day, the teams that won the gold medal in the Group-wide Kaizen Activities ("G-katsu") Presentation Competitions in China came to Osaka (Head Office) to report on their activities. The teams represented Sumidenso Mediatech Suzhou Co., Ltd. (SDM-S), which is the winner of the competition in East China, and Sumidenso Mediatech (Huizhou) Ltd. (SDM-HZ), which is the winner in South China. I was very much looking forward to their visit.

Team membersTeam members2

Briefing with the membersIn the competitions, the teams presented the "G-katsu" activities that the SDM-S and SDM-HZ teams had carried out to improve productivity in manufacturing wiring harnesses for automobiles and wiring harnesses for solar power generators, respectively. The two teams described their activities and the related difficulties encountered. They accomplished admirable results with their ingenious efforts and enthusiasm, despite obstacles and problems that were specific to their locales and the manufacturing field.

Back in 1992, upon returning from my post in London, I was appointed General Manager responsible for automotive business planning. One of my main projects in those days was the international expansion of the automotive wiring harness business, aiming to develop it into one of the Company's core business segments. Recalling this, I was filled with rather deep emotion when I was made aware of the extent to which the wiring harness business has developed in China.

While meeting with members of the two teams, I first expressed my appreciation for the extra effort that people in the manufacturing field like them made to accelerate the recovery following a sudden output drop due to the supply chain disturbance caused by the Great Tohoku Earthquake and Tsunami. I also encouraged them to continue making great achievements, emphasizing that China is in an extremely important sales and manufacturing base. This is very true as the Sumitomo Electric Group aims to win 30% of the global share in the automotive wiring harness market, while solar wiring harness business has also a great potential, given the growing demand for solar power generators and the recent trend of renewable energy source utilization.

I was told that the previous day the teams met with their counterparts from Osaka, Itami and Yokohama Works, the winning teams in the Japanese "G-katsu" competitions. The teams introduced their activities to each other and exchanged ideas and opinions. I hope that the encounter was stimulating and inspirational to them all.

The manufacturing field is the foundation of a manufacturing company like us. At the Sumitomo Electric Group, we are planning to further develop "G-katsu" and other improvement activities involving people working in the manufacturing field on a global scale for the Group's overall manufacturing excellence.

July 13, 2011,08:32 +0900(JST) Shareholders’ General Meeting

On Friday, June 24, Sumitomo Electric held its 141st annual shareholders’ general meeting in Osaka, with over 600 shareholders in attendance, a figure well above last year’s. This year, the meeting hall lighting was kept at 80% of its normal level, with the air-conditioning also set at a temperature slightly higher than in an average year, to save electricity – our small contribution to post-March 11 (Great Tohoku Earthquake and Tsunami) Japan.

The meeting opened with the company’s fiscal 2010 business performance and auditing reports, accompanied by slides. I followed that with my presentation of the challenges we will be tackling in the new fiscal year and beyond; I then invited questions from the floor.

As at last year’s general meeting, questions were slow to come at first, but at the management team’s urging, questions were posed one by one, which we did our best to answer. In this way, for about an hour we had a very good exchange with our shareholders. I would like to introduce some of the questions we received.

First of all, regarding the Anti-Monopoly Act violation issue, which caused much anxiety, we explained that, in accordance with the Sumitomo Spirit, we had all necessary measures in place to prevent a recurrence.

In response to questions regarding demand deriving from post-disaster restoration, we stated that we would make sure to capture demand relating to power supply and communication systems, which demand is expected to emerge eventually, although the government-led restoration programs are currently behind schedule. We also explained that our main segment, automotive-related business, is expected to start picking up from the second half of the current year.

We also received questions about solar cells and other renewable energy-related projects. In reply to these questions, we introduced the following projects: the Micro Smart-Grid Demonstration System at Osaka Works, regarding which we recently issued a press release; heat-collecting solar cells developed in-house; and redox flow batteries. We expressed our wish to continue offering to society quality products and technologies that we develop through ingenious combination of various “seeds” discovered within the Sumitomo Electric Group.

Some questions concerned risk diversification and possible overseas relocation - subjects much discussed since March 11. In response, we explained that Sumitomo Electric already has a global network of some 300 companies, 60% of which are located outside Japan, and that this network has enabled us to continue operating with a minimum of inconvenience to our customers following the Great Tohoku Earthquake and Tsunami. We further explained as follows: globalization is destined to continue in the future, while we must promote cross-cultural, racial and ethnic diversity in our organization, given some serious concern about Japanese economy and society; the single key to succeeding in the three major transformational moves (globalization, diversification, and Japan’s recovery) lies in innovation that also covers our business model; we intend to develop our business by keeping our focus on R&D as strongly as before, even during hard times, so that we can continue developing and creating something new in Japan.

We also received questions about R&D, human resource development, the business portfolio as envisioned in VISION 2012, and dividend payment policy.

Throughout the shareholders’ general meeting, as President and CEO I tried my best to express my frank and sincere views regarding the company’s current status, future challenges and mid- and long-term orientation. I hope that the meeting amply fulfilled its role as a venue for open two-way communication between the management team and shareholders. Sumitomo Electric is such a long-lived company that it might be likened to an object set in dull silver, but we are determined to keep our company active and open when it comes to communicating information about our activities and ideas. Your continued warm support for Sumitomo Electric will be much appreciated.

June 6, 2011,08:48 +0900(JST) IR Meeting

In late May, following the announcement of Sumitomo Electric's final business results for FY 2010, we held our annual IR meeting at our Tokyo Head Office. Over 100 institutional investors attended. To start, I briefly presented our FY 2010 business results and discussed prospects for FY 2011.

Following supplementary comments by Mr. Hideaki Inayama, Managing Director, on the business results, Mr. Katsuhide Kurasaka, Senior Managing Director, gave a presentation regarding the current status of our industrial material business. Our major products in this segment include cutting tools, sintered parts and special metal wire.

As for our FY 2010 performance, we registered 277.5 billion yen in sales (up 22% from the previous year) and 16.9 billion yen in operating income (16-fold increase). Focusing our efforts on strengthening our corporate constitution, developing original materials and capturing global demand, we managed a rapid recovery from the drastic decline following the global financial crisis triggered by the bankruptcy of Lehman Brothers. For FY 2011 we are aiming at even greater growth, with prospects set for 290 billion yen in sales (up 5% year on year), 25 billion yen in operating income (up 48% year on year), and 8.6% as operating income ratio.

In the question-and-answer session, many questions focused on prospects for the current year. I understand that following the Great Tohoku Earthquake and Tsunami, whose impact is far-reaching, many companies decided not to announce their forecasts, due to exceptional uncertainty about the future. Regarding our own announcement as well, it was extremely difficult to define the scope of the disaster's impact with any measure of accuracy. However, in the belief that it is my duty to publicly communicate the company's position and views, we have announced our business performance forecasts by gauging the impact of the Earthquake and Tsunami as carefully as possible.

Scene from the IR meetingWe anticipate that the first half of FY 2011 will be a challenging period, with sales and operating income forecast at 900 billion yen and 20 billion yen, respectively. In the second half-year, however, we expect to come up to 1,100 billion yen in sales and 80 billion yen in operating income. In response to investors' questions, I expressed my firm belief in the indomitable strength of the world-leading Japanese automobile industry, and my expectation that the supply chain-related problems would be resolved shortly, with the industry starting to rapidly increase production around the end of summer.

We also received questions about our molten salt electrolysis battery. I myself expect much from this technology, which, however, is still in the developmental stage. In future, I hope to see the new battery and superconducting cable jointly integrated into a commercialization project that fulfills public expectations.

We are aware that overall confidence in Japan's technology is unfortunately wavering following the Great Tohoku Earthquake and Tsunami, and the resultant nuclear power crisis. Nevertheless, I would like us all to do our utmost to restore the disaster-affected areas and revitalize Japan, constantly propose new products and technologies to the rest of the world, and impress the world with the presence of excellent Japanese companies.

For those interested, presentation materials and documents used at the meeting can be viewed on our web site.

(Reference: FY2010 Results and FY2011 Activities)

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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