[Company analysis] Sumitomo Electric Industries, Ltd. (住友電気工業)

「Sumitomo Electric Industries, Ltd. (住友電気工業)」is the largest non-ferrous metal company in Japan, headquartered in Osaka Prefecture, and its main products are electric wires and optical fiber cables. They still own several products with the world's top share, and have about 400 bases in 40 countries all over the world. It is one of the three major electric wire companies in Japan,「Sumitomo Electric Industries, Ltd.(住友電気工業)」,「Furukawa Electric Co., Ltd.(古河電気工業)」and「Fujikura Ltd.(フジクラ)」. The number of consolidated employees is approximately 272,796.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Sumitomo Electric Industries, Ltd.
Company name (Japanese)	住友電気工業
Date of establishment	1897
Headquarters location	〒541-0041 大阪府大阪市中央区北浜四丁目5番33号
Capital	99,737
Consolidated sales	3,177,985
Consolidated operating profit	166,260
Consolidated total assets	3,053,263
Consolidated capital	1,776,313
Capital adequacy ratio	58.2%
Consolidated number of employees	272,796

 

 

 

2. Summary and Features

 
「Sumitomo Electric Industries」is the core company of the「Sumitomo Group」and is one of the three major Sumitomo companies on par with「Sumitomo Corporation(住友商事)」and「NEC Corporation(日本電気)」. This company was established in 1897, to produce copper wire for electrical use by utilizing the copper developed from Besshi Copper Mine of「Sumitomo Electric Mining Co., Ltd. (住友金属鉱山)」. In addition to electric wires, which was the business at the time of our founding, they are currently engaged in various businesses such as automobile-related, information and communication equipment, electronic parts, and industrial materials.

Currently, one of the most important businesses of「Sumitomo Electric Industries」is the automotive wiring equipment business. The business started in 1949 with a military jeep and in 1961, they produced the first harness for a four-wheeler Hijet. Taking this opportunity, this company expanded their automobile-related business steadily, and now they got a global share of 27% in this field, which is the second largest market share in the world after the 「Yazaki Corporation(矢崎総業)」.

「Sumitomo Electric Industries」are also operating optical fiber business, which is designed to transfer large amounts of data quickly and reliably. As of 1986, they developed the world's lowest transfer loss "Z-fiber" and contributed to the construction of optical communication networks for submarine cables. Besides, this company handles cutting tools business for precision machining. In 1982, they succeeded in synthesizing a 1.2-ct diamond single crystal, which was the largest size in the world at the time (described in the Guinness Book of Records in 1984), and based on this technological strength and know-how,「Sumitomo Electric Industries」are working on the machining tool business. .

In this way, This company has expanded their business diversification not only to the existing electric wire business, but also to new fields such as optical fiber, optical communication systems, cemented carbide and semiconductor materials by utilizing their unique technology. Behind all of this success, there was the slump in demands for electric wires in Japan. After the high economic growth period of 1980, Japan experienced long term economic depression and「Sumitomo Electric Industries」was not exception. In order to survive with that situation, they decided to handle all kind of  non-ferrous metals.

And their business diversification was very successful. The electric communication system made by「Sumitomo Electric Industries」is currently being used for the "Yurikamome(ゆりかもめ)" which is a unmanned train running on the Rainbow Bridge in Tokyo. The Metropolitan Police Department's traffic information collection system and road traffic control system are also works of「Sumitomo Electric Industries」. They also have the world's top share in gallium nitride (GaN), an essential material for Blu-ray. In addition, they are very active in expanding oversea business, and it is said that 50% of all employees have experience in overseas business trips or stationing in their overseas offices.

 

 

 

3. Major Business

 

■ Automobile related business
This company supplys products such as wiring harnesses for in-vehicle data and energy transfer worldwide. This division accounts for about half of all sales.

■Information and communication
「Sumitomo Electric Industries」handle various network access products such as optical fibers, cables and connectors. In the case of electronic wires and they have the top share in the world, and in the case of optical fiber cables, they have the third largest in the world.

■ Electronic products
This company provides basic materials and wiring for small devices such as FPCs (Flexible Printed Circuits) for manufacturing high-end electronic devices such as smartphones and flat screen TVs, heat shrinkable tubes, and compound semiconductors.

■ Industrial materials
They handle light metal products such as cutting tools essential for high-speed, high-performance and high-precision machining. They also support special wires such as special metal wires for concrete for the construction industry.

■ Environment / Energy related

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		2,814,483	3,082,247	3,177,985
Consolidated operating profit		150,503	173,139	166,260
Consolidated total assets		2,907,292	3,017,303	3,053,263
Consolidated net assets		1,628,615	1,764,086	1,776,313
Breakdown of sales	Automobile related business	1,511,739	1,631,039	1,706,459
	Information and communication business	196,173	216,802	205,986
	Electronic products business	235,981	229,890	209,583
	Environment / Energy related businesss	607,494	701,745	740,722
	Industrial materials business	263,096	302,771	315,235