Sep. 10, 2019
Equity Stake Increased in US Railway Wheels and Axles Manufacturer Standard Steel
Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) has made an additional investment in Standard Steel (Head Office: Pennsylvania; CEO; Yoshiro Hori), a US manufacturer of railway wheels and axles that Sumitomo Corporation and NIPPON STEEL CORPORATION (Head Office: Chiyoda-ku, Tokyo; President: Eiji Hashimoto) jointly acquired in 2011, through the purchase of part of the stake held by NIPPON STEEL CORPORATION. As a result, Sumitomo Corporation has raised its equity stake in the US firm from 20 percent to 35 percent.
In North America, railway freight volume is growing at an estimated 2-3 percent per annum, reflecting the recent trend that favors this environment-friendly means of long-distance mass transport. Also, new railcar orders remain strong, 40,000 cars likely to be exceeded this year, as in the past. Given this, in this region, which is the world’s largest railway market, demand for railway wheels and axles is expected to increase steadily over the coming years.
Sumitomo Corporation views North America as a key railway market. The above-mentioned increased stake in Standard Steel will enable Sumitomo Corporation to become more deeply involved in the company’s management, reaffirming its commitment to contributing to the company’s growth, as well as enhancing its regional market presence and adding value for customers.
■Profile of Standard Steel
|Location||:||Pennsylvania (head office & plant)|
|Business||:||Manufacture and sales of railway wheels and axles|
|Ownership||:||NIPPON STEEL CORPORATION (65%)|
|Sumitomo Corporation (35%)|
|Employees||:||Approx. 600 (as of August 31, 2019)|
■ Sumitomo Corporation’s Material Issues
We have defined the Six Material Issues to Achieve Sustainable Growth with Society as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This business particularly contributes to “Achieving Harmony with the Global Environment,” “Establishing a Foundation for Comfortable and Enriching Lifestyles” and “Providing Diverse "Accessibility"".