November 29, 2007
The Sumitomo Heavy Industries Group has acquired new land for establishing a manufacturing plant at Tangshan City in Hebei Province of the People's Republic of China, in order to expand their business activities.
The Sumitomo Heavy Industries Group is constructing one manufacturing plant each for gear reducers and hydraulic excavators, adjacent to each other in the industrial sector for modern equipment manufacturing in Tangshan City. The city is located approximately 100 kilometers northeast of Tianjin City and approximately 150 kilometers east of Beijing. Demand for gear reducers and hydraulic excavators is increasing significantly in China. The establishment of two local subsidiaries in China is therefore planned for these areas. Once legal procedures have been fulfilled and permits for construction have been granted, construction work to build these manufacturing plants will commence immediately. The starting date for operations of both plants is targeted for February 2009.
Within the business activities that have been implemented globally by Sumitomo Heavy Industries, Ltd. (President: Yoshinobu Nakamura), gear reducers have already been distributed throughout China, with two manufacturing plants launched at Tianjin and Shanghai. Gear boxes, gear reducers of an intermediate to large scale, are primarily exported from Japan or assembled locally for distribution in China. From the perspective of stepping up expansion of the gear reducers business to enhance our competitive strength, we have decided to launch full scale local production of gear boxes and their component parts, with a dedicated manufacturing plant.
Hydraulic excavators are supplied throughout the world by Sumitomo(S.H.I) Construction Machinery Co., Ltd. (President: Kensuke Shimizu) from their manufacturing plant in Chiba Prefecture, Japan. This will be the very first overseas manufacturing location for hydraulic excavators. Global resource development and infrastructure accomplishments have been driving the demand for hydraulic excavators, which are performing briskly in the market. Efforts are currently being made at the manufacturing plant in Chiba to meet the increasing demand by increasing the maximum annual production volume from the current 10,000 units to 12,000 units through facility investments. Since further expansion of the market is anticipated, the establishment of a new production location in China has been decided, as particularly significant growth is expected there in the future.
Outline of plan for new manufacturing plant
Industrial sector for modern equipment manufacturing in Tangshan City, Hebei Province of China
|Amount of facility investment|
Approx. JPY4 billion
Approx. JPY4 billion
|Production volume (FY2010)|
2,000 units annually
Approx. JPY7 billion
Approx. JPY23 billion
|Number of employees|
Approx. 230 persons
Approx. 450 persons
Tangshan City is located about two hours by car from Beijing and Tianjin. It is a city prospering from the steel and heavy industries, with a population exceeding seven million. Coal is also abundantly available, bringing about an advanced power generating industry that supplies stable electric power. An abundance of personnel are available with skills such as welding, as well as others suitable for heavy industries, and the city is enthusiastically undertaking education, creating a location where it is possible to secure superior personnel. Twenty-one Japanese businesses have already launched their operations in the city.