Sumitomo Corp.’s Resource Unit to Improve Profitability

Sumitomo Corporation’s mineral resources, energy, chemical & electronics business unit tries to secure 20% of consolidated profit of the corporation by expanding the interests in upper stream interests in mineral and energy. Sixty percent of the unit’s profit was from upper stream interests in energy and mineral resources while 60% of the unit’s assets are middle- and down-stream operation. The unit tries to expand the profitable upper stream assets to 60% of the unit to balance the assets and profit.

The unit’s asset is 1.0505 trillion yen, which represents 16% of the corporation’s assets, while the unit’ s human resource is around 700, which represents 14% of the corporation. The unit tries to secure 20% of the corporation’s profit, which is higher than the asset and human resource balance. The unit also tries to secure 5-6% of return on asset while the corporation’s target is 3%.

The unit has profitable assets including San Cristobal zinc and silver mine in Bolivia and Ambatovy project in Madagascar. The unit tries to expand the resource base into iron ore and coal while the unit tries to expand the resource in oil and gas.

The unit tries to improve the balance sheet under the Focus ’10 or the corporation’s mid-term business plan. The unit tries to improve the return on the asset with minimum asset increase.

The unit posted 16.7 billion yen of consolidate net profit for first half of fiscal 2009 started April 2009, which was 57% lower than same period of last year. The unit revised the full year outlook upward from 18 billion yen to 29 billion yen for fiscal 2009.