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General trading company supplying cement globally, contributing to economic growth in and out of Japan

April 2012

Top sales in Japan's cement market among Integrated trading companies

Cement and concrete are basic materials indispensable in the construction of office, residential and other types of buildings as well as for civil and infrastructure engineering works, including bridges and roads. Sumitomo Corporation supplies these essential construction materials globally, boasting the largest sales volume among Integrated trading companies, thereby contributing to economic development not only in Japan but in countries across the world.

Sumitomo Corporation's cement business dates back to shortly after World War II, although the business did not grow substantially until 1963 when Sumitomo Cement Co., Ltd. (currently Sumitomo Osaka Cement Co., Ltd.) was established. That was the year before Japan first hosted the Olympic Games and the country was in the midst of an unprecedented construction boom amid rapid post-war economic growth. It was in this era that Sumitomo Corporation's cement business truly began to prosper. Since then, it has continued to thrive along with the development of expressways, bridges and other forms of social infrastructure nationwide.

In 1988, Sumitomo Corporation established S.C. Cement Co., Ltd., a wholly-owned subsidiary specializing in sales of cement and related products, to expand the Company's business in this field. Fifteen years later, the subsidiary started manufacturing ready-mixed concrete in the Kyushu region, marking a significant milestone in the history of S.C. Cement as an arm of a Integrated trading company, given that the company grew to cover a wide range of business processes from upstream to downstream, specifically by adding manufacturing and supply of ready-mixed concrete to its original cement sales business. Since then S.C. Cement has expanded its ready-mixed concrete production capacity, currently operating seven plants in Kyushu and holding the top position in the local market in Fukuoka.

One of S.C. Cement's seven ready-mixed concrete plants in Kyushu. The plants trade under the name "Horiden."

Core supplier in the construction of international airport

Sumitomo Corporation is a dominant supplier of cement and related products in Tokyo and other large city areas, and in particular remains the market leader in terms of sales of ready-mixed concrete in Tokyo and the surrounding urban area. Behind this unrivaled track record established by Sumitomo Corporation's cement business are the strong ties with the Company's Construction and Real Estate Division. The extensive supplier network developed by the division throughout the industry serves effectively to allow the Company's cement segment to capture information on new construction projects ahead of competitors. This internal cooperation has helped position Sumitomo Corporation favorably to receive orders for a wide range of construction projects from those involving real-estate properties traded by the Company to undertakings for diverse types of urban structures, including office buildings and expressways.

Concrete begins to harden shortly after it is mixed and, in general, site work using ready-mixed concrete must be finished within 90 minutes of production. Large scale construction works consume huge amounts of ready-mixed concrete, particularly during peak times, and it is essential to deliver the required amounts of this "perishable product" according to each user's mix design on time. For some mega projects, temporary plants are often built near work sites to produce ready-mixed concrete, allowing for more efficient supply. Thanks to many years working to meet a broad spectrum of these and other demands, Sumitomo Corporation has gained the trust of users in a wide range of business areas.

Computer control is vitally important to maximize efficiencies in operating ready-mixed concrete plants.

Sumitomo Corporation has been the exclusive supplier of cement for a number of mega projects in Japan, including the Tokyo Metropolitan Government Building, Harumi Triton Square and the new terminal of Tokyo (Haneda) International Airport. One of the most recent undertakings involved Central Japan International Airport, nicknamed Centrair, built off the coast of Aichi Prefecture. We set up a ready-mixed concrete plant near the work site jointly with other companies in order to supply the tremendous amount of construction material demanded in the most efficient way. A member of the project team said, "The concrete used in the foundation of the airport structures was nearly 100% supplied by Sumitomo Corporation."

Central Japan International Airport, opened in 2005. For the construction of this mega structure on an artificial island more than 70,000 ㎥ of ready-mixed concrete was used. This was supplied by Sumitomo Corporation.

Global player in the cement business

Sumitomo Corporation has also been proactively expanding its cement business overseas. Japan-made cement and related products are globally reputed for their high quality and the Company has steadily increased exports. Our overseas customer list in this field has extended to include countries half way around the world, specifically Nigeria and Brazil, in addition to Singapore, Hong Kong and others in geographically closer regions.

China, among others, is an important market in the overseas expansion of Sumitomo Corporation's cement business. In the 1990s, as part of some major projects launched in the country amid the rapidly growing economy, we established a plant in Dongguan City to process intermediate material, known as clinker, to manufacture finished cement products. Since then the plant, which is operated by Sumitomo Corporation, has produced and supplied a total of 5.5 million tons to the burgeoning economy of China, one of the world's largest consumers of the material, with annual concrete consumption per head exceeding 1 ton, compared to approximately 330 kg in Japan. In order to meet this massive demand, numerous cement factories have been set up in recent years and we transferred operation of the Dongguan plant to a local operator in the early 2000s. This move reflects our principal concept of developing the cement business as a vehicle to foster economic growth. Under this concept, we aim to develop cement supply channels in economies that are undergoing rapid growth, channeling the material through a global network to ensure sufficient supply before transferring the project to a local player, thereby contributing to the future development of the cement sector in the region, while seeking new opportunities in other potential growth markets.

Tanker exporting Japan-made cement and related products, which are highly reputed for their good quality

Supplier for infrastructure improvement projects that contributes to enhanced safety in society

Sumitomo Corporation's future plans for the cement business focus on Southeast Asia, where we hold extensive trading rights and relationships fostered over years of trading activities in this region. Major economies in this region are moving into a new acceleration phase, aiming to achieve the economic level of developed countries, and increasing investment in infrastructure development. This is expected to dramatically raise demand for cement, which translates to creation of new opportunities for us to demonstrate our capabilities in the field. At the same time, we will also gear up expansion efforts in emerging markets in South America and Africa, where infrastructure-related demand is strong.

Cement technology has developed at an incredible pace in recent years. Innovative methods and materials used for cement mix have reinvented the centuries-old basic construction material into a new material with super strong properties that can support hundreds-meter high contemporary tower structures. This enhanced strength is expected to play an increasingly important role in modern society, whether that be in Japan or other countries, where concrete structures are spreading, in protecting the safety of people, particularly against earthquakes, tsunami and other such disasters. Bearing the significant function expected of this infrastructure material in mind, Sumitomo Corporation will continue its commitment to developing the cement and concrete business, always looking to contribute to the enhanced safety of society.

Towers built using super strong concrete supplied by Sumitomo Corporation (Higashi Ikebukuro 4-chome redevelopment area in Tokyo)

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