Establishing cutting tool sales bases in Brazil, Indonesia and Turkey

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Sumitomo Electric Industries, Ltd. has decided to increase sales of its cutting tools in emerging market with the establishment of new sales bases in Brazil, Indonesia and Turkey.

In Brazil, an increasing number of parts processing companies mainly in the automotive industry have set up operations to meet growing local demand. Blessed with vast natural resources, this country has seen steadily growth in steel and oil-related businesses as well as the aircraft industry. As a result, demand for cutting tools is increasing year by year. Thus far, our cutting tools have been supplied to the Brazilian market by a sales company in the United States through local dealers. Aiming to extend its sales networks, Sumitomo Electric has decided to establish a sales company, which is wholly owned by the Sumitomo Electric Group. The new company will deal with carbide drills and cemented-carbide or cubic-boron nitride (CBN) indexable inserts. By providing a wide range of products and substantial technical services, the company will expand its market share in Brazil.

In Indonesia, with the backdrop of the recent progress in motorization and a population exceeding 200 million, automobile demand is rapidly increasing. The growth in local auto production has boosted demand for cutting tools. Our cutting tools have been supplied to the Indonesian market by a sales company in Singapore. To provide customers with improved technical services, and to extend its sales networks, Sumitomo Electric has decided to establish a new sales base in Indonesia by adding a new category of products to the business lines handled by the Sumitomo Electric Group's sales company that has been operating in the country. In addition, we have also decided to establish a new company that will manufacture cemented carbide drills, CBN and sintered diamond indexable inserts, and other cutting tools. The sales and manufacturing companies will work together to respond to local market needs, aiming to gain a larger share in the Indonesian market.

Turkey is the largest economy among the VISTA* nations in terms of gross domestic product, and ranks sixth in all of Europe in auto production volume, which exceeded a million units. In addition to the automotive industry, the aircraft industry has also flourished, producing engine parts for commercial airplanes and many other industrial products. As these key industries have grown, demand for cutting tools has also expanded. Our cutting tools have been supplied to the Turkish market by a sales company in Germany. To satisfy the needs for short delivery time and attentive technical services, and to extend its sales networks, Sumitomo Electric has decided to establish a sales company in Turkey jointly with Milmak Metal Sanayi ve Ticaret Ltd. Sti., a local manufacturer of cutting tools. Combining our high-quality and extensive product lineup with Milmak's sales network, low-cost end mills and re-sharpening service, the new joint venture aims to gain a large share of the Turkish market.

*VISTA: The VISTA countries (Vietnam, Indonesia, South Africa, Turkey and Argentina) are attracting attention as a second wave of emerging economies following the BRICs.

Profile of new company in Brazil

Company
name
Sumitomo Electric Hardmetal do Brasil Comércio e Importção de Ferramentas Ltda.
Location Campinas, Federal Republic of Brazil
President Kazuyoshi Kimura
Business Sales of cemented carbide tools
Capital 5 million US dollars
(approx. 400 million yen, 1 US dollar = 80 yen)
Investment
ratio
Sumitomo Electric Group 100%
(Sumitomo Electric Industries, Ltd.: 99%, Sumitomo Electric Hardmetal Corp. : 1%)
Establishment December 2011
(Scheduled to start operation in May 2012)
Employees 8 (2 employees sent from Japan)
Prospective
sales
Approx. 380 million yen in FY 2012, approx. 2.5 billion yen in FY 2016

Profile of new company in Turkey

Company
name
SUMİSERTMETAL TİCARET VE SANAYİ LİMİTED ŞİRKETİ
Location Istanbul, Republic of Turkey
President Edip Bayizitlioglu
Business Sales of cutting tools, re-sharpening service of drills
Capital 2.4 million Turkish Lira
(approx. 100 million yen, 1 Lira = 45 yen)
Investment
ratio
Sumitomo Electric Hartmetall GmbH.(Sumitomo Electric's wholly owned subsidiary): 51%,
Milmak Metal Sanayi ve Ticaret Ltd. Sti. : 49%
Establishment April 2012
(Scheduled to start operation in May 2012)
Employees 17
Prospective
sales
Approx. 250 million yen in FY 2012,
approx. 500 million yen in FY 2016

Profile of Milmak Metal Sanayi ve Ticaret Ltd. Sti.

Company
name
MİLMAK Metal Sanayi ve Ticaret Ltd. sti.
Location Istanbul, Republic of Turkey
President Edip Bayizitlioglu
Business Manufacture and sales of end mills

Profile of sales company in Indonesia

Company
name
PT. Sumiden Powder Metal Indonesia
Location Jakarta, Republic of Indonesia
President Kenji Kanai
Business Sales of sintered powder metal products and cutting tools
Start of
operation
April 2012
(start sales of cutting tools)
Employees 15 (4 employees sent from Japan)