Sumitomo Metals’ strategy for overseas expansion is to manufacture in growth markets. We will accelerate overseas expansion by our manufacturing bases in Japan being the mother factory in terms of the “intangible assets” such as human resources, technologies, customer relations, and organization. And our bases in Japan will focus on higher-end products, with the aim of boosting our corporate value.
Sumitomo Metals has competitive products that are underpinned by a high level of technology and enable us to succeed in the overseas market. They include seamless pipes for energy development, steel plates, high-tensile steel sheets for lightweight vehicles, railway wheels of which our domestic share is 100%, and forged crankshaft where we hold global share of around 8%. Sumitomo Metals will realize long-term sustained growth by accelerating oversea expansion with these competitive products.
The above chart shows our road map for overseas expansion. Our steelworks that produces seamless pipe in Brazil manufactured its first pipe in December 2010. The steel sheet joint venture in Vietnam is scheduled to start its operation in 2012, and development of steel sheet business in India is currently under consideration. We have invested in the Canadoil Group and provide technical assistance to its steel plate mill which is currently under construction in Thailand and is scheduled to start its operation in 2013. In the field of crankshafts for automobiles, we have established a four-base global production-and-sales structure by adding a production and sales base in India, on top of our operations in Japan, the United States, and China. In the area of railway wheels and axles, we establish two-base global production-and-sales structure through the acquisition of Standard Steel, one of leading manufacturer of railway wheels and axles in North America.
Our joint venture steelworks that produces seamless pipe in Brazil manufactured its first pipe in December 2010. In 2011, the upstream processes including a blast furnace and a steelmaking plant will be completed and full-fledged operation as a steelworks will start. Addition of this new base will help us provide high-grade products to our worldwide customers.
In the area of steel sheets, the joint venture in Vietnam plans to start production in 2012. In India we are providing technical assistance to Bhushan Steel’s steelworks, and have agreed with Bhushan to receive the steel sheets manufactured there as OEM products to be sold under Sumitomo Metals brand. In the field of steel plates, we have invested in the Canadoil Group and provide technical assistance to its steel plate which is under construction in Thailand and is scheduled to start its operation in 2013. With this investment, Sumitomo Metals will add 300,000 tons in annual steel plate manufacturing capacity, and will be able to respond to demand increase of high-end steel plates.
In the field of crankshaft, the manufacturing and sales joint venture in India began in 2010. Together with our bases in Japan, United States, and China, a four-base global production-and-sales structure has been established. We aim to soon raise our global share to over 10%. In the field of railway wheels and axles, we establish a two-base global production-and-sales structure through the acquisition of Standard Steel, one of the leading manufacturers in this field. This acquisition will also make us more diversified and thus more reliable as a supplier to customers, even in the case of crises.
