Sumitomo Electric to Build Carbide Tool Bases in Emerging Countries

Sumitomo Electric Industries tries to build new plant of cemented carbide tool in emerging countries. The firm plans to build wholly owned sales office in Brazil in 2011. The firm also eyes sales office in Russia. The firm studies potential Chinese plant for mass production and export of commodity grade products in 1 or 2 years. The firm tries to follow growing demand for automobile and industry in the countries.

The firm expects the cutting tool demand will grow in Brazil where many automakers of Europe and USA have plants. The firm already has sales agent in the country but the firm tries to establish the own sales office when the rival makers already secured the sales offices. The firm eyes potential plant in mid term with expectation for demand growth for polishing of drill and cubic boron nitride tool and for special grade products.

The firm expects the demand will grow for steel, rail and other industry in Russia. The firm tries to find the timing to open the sales office to take chance for recovery of the demand.

The firm already has plants in Tianjin and Shanghai to make insert chip, drill for steel and iron and drill for printed circuit board. The firm eyes new plant in eastern or southern part of China to make commodity grade products for China and export market while the existing plants make customized products for local users.

Sumitomo Electric’s wholly owned tool making subsidiary, Sumitomo Electric Hardmetal Corp. expects the sales in second half of fiscal 2010 ending March 2011 will reach 90% level of the peak in fiscal 2007 while the current sales is 85% of the peak. The firm targets 100 billion yen of sales in fiscal 2012 compared with 73 billion yen in fiscal 2007.