Management Rights Acquired in Malaysian Fertilizer Manufacturer/Distributor

Sumitomo Corporation (head office: Chuo-ku, Tokyo; president: Kuniharu Nakamura) and Sumitomo Corporation Asia & Oceania Pte. Ltd. (head office: Singapore; president: Kohei Hirao) (both hereinafter collectively referred to as “the Sumitomo Corporation Group”) have increased to 60% of their holdings in Union Harvest (M) Sdn. Bhd. (head office: Malaysia; Managing Director: Wong Yu, hereinafter “UHM”), a Malaysian fertilizer manufacturer/distributor, and acquired a controlling interest therein. UHM will serve as a key base in expanding operations for the Sumitomo Corporation Group’s fertilizer business in Asia.

Malaysia’s fertilizer market is one of the world’s largest at 4.5 million tons per year, and more than 80% of this volume is fertilizer for oil palm, used to create palm oil, the world’s most widely produced vegetable oil. Malaysia produces about 40% of the world’s palm oil, and steady growth is foreseen for the fertilizer market as oil palm plantation acreage and replanting demand increase.

UHM has a compound fertilizer* plant located in Kuantan, the state capital of Pahang, in Peninsular Malaysia with an annual production capacity of about 150,000 tons, where it manufactures fertilizer for Malaysian oil palm plantations. The company’s products are known for being more effective than general compound fertilizers, and have earned such a strong reputation that its leading products have won the endorsement of the government institutions overseeing Malaysia’s palm oil industry.

The Sumitomo Corporation Group has for many years been engaged in the fertilizer business, primarily the sale of fertilizer products to end-consumer farmers and plantations in Japan, China, Malaysia, Australia and elsewhere in the Asia-Oceania region. The Group entered the Malaysian market in 1993, acquiring a 20% stake in UHM in 2004 and recently adding to this stake to further expand its business, and will strive to enhance its business using the know-how cultivated by the Sumitomo Corporation Group in the fertilizer business as well as the networks it has developed in other businesses.

The Group plans to triple the sales from their present level by 2020 (to approximately 20 billion yen) by constructing new plants, and it is considering handling a broad range of commercial goods such as agrochemicals and other agricultural production materials as well as expanding into Indonesia, the world’s largest palm oil producer.

The Sumitomo Corporation Group will meet rising global demand for food by distributing high-performance compound fertilizers essential for stable production of farm products.

Note: *Compound fertilizer: collective name for fertilizers that include two or more of the following: nitrogen, phosphorus, and potassium. Compound fertilizers offer the benefit of requiring fewer applications for the same effect.