Notice Regarding the Establishment of Water Treatment Company in China

February 13, 2012

This is to notify that Sumitomo Heavy Industries, Ltd. will establish a water treatment company as an overseas affiliate in Shanghai, China. The details are outlined below.

1. Purpose of Establishment
The SHI Group will establish an overseas affiliate for the purpose of leveraging its equipment sales to enter the water treatment business in China, where the market is expected to grow.
Through creation of the overseas affiliate, SHI will meet today's expanding market demand, and vigorously promote future sales growth. SHI is already conducting business operations in China, and will seek to expand sales and service by having a local base.

2. Profile of New Company
(1) [Company Name]
Sumitomo Heavy Industries Environment (Shanghai) Co., Ltd.
(2) [Location]
Shanghai, China
(3) [Business Activities]
Sell and service of water treatment equipment
(4) [Capital]
(5) [Main Investor]
Sumitomo Heavy Industries Group (100%)

3. Future Outlook
The impact on current year business results (ending March 2012) as a result of the establishment of this new entity is expected to be minimal.