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Fiscal 2007 News
Notice of Stock Acquisition of Demag Ergotech GmbH and Van Dorn Demag Corporation

February 08, 2008

On February 8, 2008, the board of directors of Sumitomo Heavy Industries, Ltd. (hereinafter "SHI" or the "Company") resolved to acquire 100% share of Demag Ergotech GmbH (hereinafter "Demag") and Van Dorn Demag Corporation (hereinafter "Van Dorn") both of which manufacture and sell injection molding machinery. Demag and Van Dorn are group companies of MPM Holdings.

1. Purpose of Stock Acquisition
SHI has positioned injection molding business as its core business and focused on strengthening / expanding this segment. Currently, the foreign sales ratio is slightly over 60% among the total sales of injection molding business, over half of which is occupied by the sales in Asia (mainly China). Therefore, strengthening the sales in areas other than Asia has been SHI's challenge.
Demag is a highly renown injection molding manufacturer, incorporated in Germany in 1922. In addition to its strong presence in Europe, Demag's sales channels are located within the emerging markets such as Eastern-Europe and Russia. Production facilities are located in Germany, China and India. In Europe, electric molding machine is prevailing and the present production ratio within Demag is approximately 10% of total sales.
Van Dorn is a manufacturer of injection molding machinery, incorporated in 1872. MPM Holdings acquired Van Dorn in 1993 and Van Dorn joined Demag Plastics Group. Van Dorn withdrew from the manufacturing business last year due to the cooling consumption in the US market and presently operates as a sales and service company.
SHI decided to acquire 100% share of Demag and Van Dorn anticipating the expansion of injection molding business in US, Europe, Russia, India and Brazil markets with the company's competitive electric machinery technology.

2. Overview of the Target Company
(1) Demag Ergotech GmbH
1- Company Name: Demag Ergotech GmbH
2- Representative: Dr. Klaus F. Erkes
3- Head Office: Altdorfer Strasse 15, 90571 Schwaig, Germany
4- Incorporation: 1922
5- Business Description: Manufacture / Sales of injection molding machinery
6- Fiscal Year End: September 30
7- Numeber of Employees: 1,331
8- Capital Amount: 13,300 thousand Euro
9- Total Number of Issued Shares: 1 share
10- Major Shareholders and Percentage of Shareholding: KraussMaffei Financial Services GmbH 100%
11- Financial Results:
(thousand Euros / numbers in brakets are in milloin JPY)

 September 2006September 2007
Revenue188,191 (30,111)190,699 (30,512)
Gross profit42,315 (6,770)43,359 (6,937)
Operating income 4,398 (704)4,300 (688)
Total assets116,678 (18,668) 126,534 (20,245)
Net assets28,635 (4,582)36,308 (5,809)
(Conversion rate: 1 Euro = 160 JPY)

(2) Van Dorn Demag Corporation
1- Company Name: Van Dorn Demag Corporation
2- Representative: William Thornton
3- Head Office: 11792 Alameda, Strongsville, Ohio, U.S.A.
4- Incorporation: 1872
5- Business Description: Sales / Service of injection molding machinery
6- Fiscal Year End: September 30
7- Number of Employees: 77
8- Capital Amount: 1,000USD
9- Total Number of Issued Shares: 1,000 shares
10- Major Shareholders and Percentage of Shareholding: MPM US HoldCo Inc. 100%
11- Financial Results:
(thousand Euros / numbers in brakets are in milloinJPY)
 September 2006September 2007
Revenue72,740 (11,638)45,542 (7,287)
Gross profit 12,750 (2,040)982 (157)
Operating income 3,747 ( 600) 6,467 ( 1,035)
Total assets44,887 (7,182)13,545 (2,167)
Net assets5,341 (855) 4,090 ( 654)
(Conversion rate: 1 Euro = 160 JPY)
Note: KraussMaffei Financial Services GmbH, a European holding company and a majority shareholder of Demag is a subsidiary of MPM Holdings LLC. MPM US HoldCo Inc., a US holding company and a majority shareholder of Van Dorn is also a subsidiary of MPM Holdings LLC. (Please see attached the organization chart)

3. Seller of the Stocks
(1) Stocks of Demag Ergotech GmbH
1- Company Name: KraussMaffei Financial Services GmbH
2- Representative: Dr. Dietmar Straub
3- Head Office: Krauss-Maffei- Strasse 2, 80997 Munich, Germany
4- SHI's relationship with the concerned parties: None

(2) Stocks of Van Dorn Demag Corporation
1- Company Name: MPM US HoldCo Inc.
2- Representative: Peter Sassenfeld
3- Head Offiec: 1209 Orange Street, Wilmington, Newcastle Country, Delaware, U.S.A.
4- SHI's relationship with the concerned parties: None

4. Acquired number of shares and shareholding ratio before and after the transaction:
(1) Shareholding (ratio) before
- Demag Ergotech GmbH 0 shares
(Shareholding ratio 0%, Total number of voting rights 0)
- Van Dorn Demag Corporation 0 shares
(Shareholding ratio 0%, Total number of voting rights 0)

(2) Acquired number of voting rights
- Demag Ergotech GmbH 1 share
(Shareholding ratio 100%, Total number of voting rights 1)
- Van Dorn Demag Corporation 1,000 shares
(Shareholding ratio 100%, Total number of voting rights 1,000)

(3) Shareholding (ratio) after
- Demag Ergotech GmbH 1 share
(Shareholding ratio 100%, Total number of voting rights 1)
- Van Dorn Demag Corporation 1,000 shares
(Shareholding ratio 100%, Total number of voting rights 1,000)

5. Schedule
February 8, 2008 Resolution by board of directors
March 3, 2008(plan) Transfer of stock certificate

6. Future Projection
Effect of acquiring the target company is expected to be minor and there will be no amendments to the consolidated projection for the fiscal year ending March 31, 2008.

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