Special Feature 1 Earnings Expansion：Providing new value while staying attuned to customer needs and addressing changes

The business environment surrounding Sumitomo Corporation has been in a constant state of flux, characterized by the complex interplay of various factors, including the yen's appreciation, advances in IT and growth in emerging countries. Other factors have included the Lehman Brothers bankruptcy and the ensuing financial instability, global environmental issues and natural disasters. In step with these developments, our customers' needs have also changed. For example, customers in the manufacturing industry are increasingly seeking to shift their operations offshore and to address environmental issues.

We see these changes as business opportunities. While harnessing our business platforms, including operating sites around the world, and functions such as information gathering and analysis capabilities, as well as risk management skills, we have built value chains by expanding our business domains from midstream fields such as distribution operations to upstream fields such as manufacturing operations and downstream fields, including retail and service operations.

And by continuing to provide new value while adding depth to the value chains we have built, we aim to achieve sustained earnings expansion into the future.

In this feature section titled “Earnings Expansion,” we present three examples of how we have created new value and added depth to our value chains. The first is our tubular products business in North America, where we have continually refined the value chain. The second is the Tanjung Jati B coal-fired thermal power plant project in Indonesia, where we have refined our business model starting from our role as a construction contractor for this power plant. Finally, we take a look at overseas development of the retail business, where we have nurtured various businesses by taking full advantage of our trading company functions.