February 15, 2001

Sumitomo Heavy Industries, Ltd (President: Yoshiro Hinoh) has established a precision parts and components production subsidiary company, SHI Manufacturing and Services (Philippines), Inc. (SHIMS), in the Philippines. At the end of January this year it was signed up as a registered PEZA* company, and plant construction will begin in March. Commencement of operations is scheduled for October of this year.

The new company will process precision parts and assemble components for Sumitomo Heavy Industries and its group of companies. The company will start production of metal injection molding products in addition to precision parts and components such as positioning devices, cryogenic equipment and control equipment chiefly for the competitive costing of target products as a foreign plant of Sumitomo Heavy Industries and its group of companies. Sumitomo Heavy Industries has expanded its components business for strategic growth and, as with its core businesses of converter/speed reducer and plastic machinery already developed overseas, it has also established a manufacturing base in the components business.

The affiliate of Sumitomo Heavy Industries to be set up in the Philippines will be the third one to be established following SHI Design and Manufacturing and SHI Plastic Machinery (Philippines).

Outline of New Company
1. Name: SHI Manufacturing and Services (Philippines), Inc. (SHIMS)
2. Location: First Philippine Industrial Park (FPIP), Batangas, Philippines
3. Established: December 2000
4. Capital: 87 million pesos (yen equivalent = approx. \200 million) financed 100% by Sumitomo Heavy Industries
5. Representative: President Kuniaki Kusaba (currently Manager, Materials and Planning Head Office, Sumitomo Heavy Industries)
6. Staff: Organization of 500 people by 2005
7. Plant scale: Land area of 10,900 m2 and floor space of 5,050 m2
8. Business activities: Processing and assemblage of precision parts and components and production of metal injection molding products.

* PEZA = Philippine Economic Zone Authority (Philippines export and processing zone).
PEZA registered companies can receive favorable tax and other benefits.

[Reference]
Existing affiliate companies in the Philippines

Name: SHI Design and Manufacturing, Inc.
Location: Metropolitan Manila
Established: December 1989
Capital: 12.75 million pesos (financed 100% by Sumitomo Heavy Industries)
Business activities: Design of various kinds of machinery and software creation

Name: SHI Plastics Machinery (Phils.), Inc.
Location: Metropolitan Manila
Established: June 1997
Capital: 6 million pesos (financed 100% by Sumitomo Heavy Industries)
Business activities: Retailing, servicing and related business of plastic molding machines