Sumikin Bussan Eyes Record Profit by Asia Expansion

Sumitomo Metal Industries’ trading equity method affiliate, Sumikin Bussan targets record consolidated recurring profit under midterm management plan started fiscal 2011 ending March 2012 topping record 20.13 billion yen in fiscal 2007 with strong domestic profit. The firm tries to seek profit growth through wider offshore business to follow growing market while the firm improves the profitability for the domestic business. The firm’s steel unit focuses on offshore growth by expansion of Thai coil center and other offshore operations and by development of global and professional human resources.

Sumikin Bussan improves the profitability by taking advantage of mixture of 4 internal companies. The firm plans optimum investment and restructuring for the 4 units to keep the profit share balance with 39% for steel, 28% for textiles, 18% for industrial supply and infrastructure and 16% for foodstuffs. The firm targets 30% of steel export on the total steel sales value in future while the firm reported record 15.5% of export rate in fiscal 2010 compare with 13% in fiscal 2009.

Sumikin Bussan plans around 8 billion yen of investment for fiscal 2011, of which investment for steel business represents around half. The steel unit focuses the investment in Asian market to improve the global business especially for the processing functions.

The firm doubled the investment to 7.8 billion yen in fiscal 2010 including 3.9 billion yen for steel business. The firm expanded the business base by the investment activities including new Indian company in April 2010, investment in US automotive parts maker and acquisition of Japanese steel pipe dealer, Awaji Steel Pipe.

Sumikin Bussan has shares in Vietnamese joint ventures of cold rolling mill and coil center of Sumitomo Metal Industries and China Steel Corporation of Taiwan. Sumikin Bussan eyes steel business expansion in Asia mainly by steel sheet & strip department for Asia, which launched in April 2010. The firm also eyes infrastructure business expansion eyeing expansion of Rojana Industrial Park Public in Thailand, in which the firm has around 20% shares, and new investment in Asian business.