Notice Regarding the Establishment of an Investment Firm in China

July 30, 2010

This is to notify that the Board of Directors of Sumitomo Heavy Industries, Ltd. (hereinafter referred to as "SHI" or the "Group") passed a resolution at a meeting held on July 30, 2010 to establish an Investment Firm in China. The details of the decision are outlined below:

1. Purpose of Establishment
In the rapidly expanding China market, SHI has been actively developing its business activities through such efforts as the opening of a new plant in Tangshan and the strengthening of existing operations. As the Group's production and sales operations in China become more active, the demand for capital investment and funds are anticipated to grow. For this reason, SHI has decided to establish an Investment Firm in China to support the funding needs of the local entities. At the same time, the new firm will be tasked to carry out adjustments to balance funding between locally domiciled Group companies in China, and will thus be managing funds on a consolidated basis. Currently, SHI has 16 Group companies within China, and of these entities, a greater emphasis will be put on enhancing the production capabilities for the Group's construction machinery and speed reducers in the future.

Since April of this year, the Group has been working to integrate the local China operations into a Holding Company format, with the aim to establish a framework to strengthen overall management capabilities and increase the speed of decision-making in the country. The establishment of the new firm will further strengthen the Group's operating platform in the high-growth China market, and will promote expansion in the future.

2. Profile of New Company
(1) Location: Shanghai, China
(2) Business Activities: Investment and fund management in China
(3) Capital: USD35,000,000
(4) Date of Establishment: December 2010 (Projected)
(5) Main Investors: Sumitomo Heavy Industries, Ltd. (100%)
Further information on the name of the new company and representative person will be disclosed once decisions on such matters have been made.

3. Future Outlook
The impact on current year business results (ending March 2011) as a result of the establishment of this new entity is expected to be minimal. As such, no revisions have been made to the earnings forecast that was announced on May 5, 2010.