REPORT 01 Expanding into New Markets―Mining Equipment Business: From Canada to the World

Sumitomo Corporation is opening new frontiers in Russia, a huge market with a wealth of natural resources, for its mining equipment business, taking advantage of the track record and trust built by its Canadian subsidiary as reported in Part 1 and 2. Sumitomo Corporation’s mining equipment business subsidiary in Russia established a branch in Kuzbass, the first “bridgehead” in the area ever set up by a Japanese company. This vigorous frontier spirit led Sumitomo Corporation to win a major order for its mining equipment. (Posted on March 6, 2012)

Opening new frontiers―Settling in the land of the Yeti in the huge Russian market

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The first dealer opened by a Japanese company in an extremely cold region in Russia


Takeo Otsuka, Manager of the Construction Equipment Team for CIS from Construction Equipment Dept., No.2

Often called “the navel of Russia,” Kemerovo Province, where the Kuzbass region is located, is situated at the right center of the world’s largest country. Kuzbass may not be a familiar name, but many will know the name “Yeti,” a legendary wild snowman. Kuzbass, a region with extremely cold climate, has recently become well known due to the “discovery” of the Yeti.

“Among places in which Sumitomo Corporation personnel are stationed, Kuzbass is no doubt one of the harshest places to live in terms of its severe natural environment. In describing the Kuzbass region, it is said that with the exception of personnel working for our company and Komatsu, a Japanese mining and construction equipment manufacturer, there are no Japanese people living there at all,” explained Takeo Otsuka, Manager of the Construction Equipment Team for CIS from Construction Equipment Dept., No.2, a unit within Sumitomo Corporation responsible for the mining and construction equipment business in Russia and CIS.

In this unforgiving place, Sumitomo Corporation established a mining and construction equipment dealer in January 2011, the first time a Japanese company had done so. The dealer is a branch of Sumitec International (Sumitec), Sumitomo Corporation’s subsidiary in Russia, which was founded in 2001 and provides sales and after-sales services for Komatsu’s mining and construction equipment in Russia. It is a sister company of SMS Equipment (SMS-E), Sumitomo Corporation’s subsidiary in Canada that is engaged in the same business and which was established earlier. In collaboration with SMS-E, which has built very strong relationships of trust with leading mining companies and with Komatsu, Sumitec is on its way to expanding its business across Russia.


Kemerovo Province, located in an area with an extremely cold climate,
and known worldwide as the home of the legendary Yeti snowman

Staying close is the key to customer satisfaction

The Kuzbass region is Russia’s largest coal reserve, producing 60% of the total coal production in the country. Because the quality of the coal is superior, mining development in the region is accelerating, requiring nearly 24/7/365 continuous operations, with operating hours for mining equipment reaching 8,000 hours per unit each year. The demand from mining companies for higher operating rates and larger equipment has been growing in recent years, bringing increased pressure to suppliers to provide a higher level of maintenance, repair, and other after-sales services.

Sumitec previously provided maintenance and repair services for Komatsu’s mining equipment operated in the Kuzbass region through its Siberia Branch. However, the long 400-km distance from the branch to the Kuzbass region, coupled with poor road conditions, inevitably requires several days for personnel to commute between the repair site and the branch.

As effectiveness of mining equipment becomes crucial, it is essential to meet the needs of customers by setting up a dealer near the actual site in order to make after-sales services available at any time.


The Kuzbass region produces about 60% of Russia’s total coal production of about 300 million tons/year

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REPORT 01 Expanding into New Markets―Mining Equipment Business: From Canada to the World

  • 24/7/365 ongoing efforts―Solid track record of continuous operations supports the core business
  • Sales are not the endpoint of the business―The goal is to deepen the business model
  • Bonds of trust and the human network―Key elements to opening the way for Sumitomo Corporation to enter a new market in Mongolia
  • Opening new frontiers―Settling in the land of the Yeti in the huge Russian market

REPORT 02 Solutions through Innovation ―Power Plant Lease Project in Indonesia

REPORT 03 Introducing Japanese Agricultural Business Model Across the Globe ―Agribusiness to Spread Agricultural Cooperative Style Service from Romania

REPORT 04 Supporting Lifestyles ―Retail Business Incorporating Trends in Consumption Behavior

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