New Year's Message from Hiroshi Tomono, Representative Director and President

Hiroshi Tomono, Representative Director and President of Sumitomo Metal Industries, Ltd. (Sumitomo Metals), made a New Year's address to all employees on January 5, 2009, at 11 a.m.

[Condensed version]
I am pleased to tell you that we are likely to achieve the three-year profit targets that had been stated in our current Medium-Term Business Plan (fiscal 2006-2008). This is thanks to all of you who have worked hard to realize our corporate goal for sustained growth in corporate value with focus on quality.

The new year of 2009 will be an extremely difficult one due to the unprecedented drastic economic contractions worldwide. I expect that a very severe environment will last the whole year, at minimum. However, the current economic turmoil has not changed the basic middle- to long-term scenario that anticipates the economic growth in BRICs and other emerging countries will enable the world demand for steel to continue growing.

We aim to win and retain the trust of all stakeholders, by becoming more resilient to downside risks and improving corporate value. I believe that we have to overcome two challenges in order to achieve our goal.

First, we keep our middle- and long-term viewpoints and strategies intact. Concerning our strategies and measures to accelerate distinctiveness and enable sustained growth of the Group, we will do what is needed to be done. At the same time, we will respond flexibly to the current difficult business environment. We are currently working on the next medium-term business plan, which will be in line with our basic policy to carry out what is to be done with a perspective of over 10 or 20 years ahead of us.

Our second challenge is to respond swiftly and flexibly in our production and sales in the current difficult business environment. On the production side, we have been cutting back production from the end of last year. Such quick and appropriate response to volatility in demand and fluctuation in production is critical.

I would like to ask those of you who work on our shop floors not only to adjust to fluctuations in production but also to take the current challenging period as a chance to engage in issues that you had not been able to tackle to during busy times. These include large-scale test production and promotion of multi-skill development.

To those of you who work in sales and marketing, may I ask you to communicate even more closely with our customers and to understand their conditions and needs swiftly as well as accurately.

The Sumitomo Metals Group has a history in manufacturing of over 100 years. This is our precious asset. It is based on Sumitomo's business spirit that has prevailed for over 400 years, and which remains an integral part of our policy today. By making this the solid foundation of our work, we will continue to produce steel products and help customers to build their visions for the future. I firmly believe that this will lead our Group to continue growing as a company trusted by all stakeholders.

Tomono has also addressed the following issues and our policies on them.
:Issues for each internal company
:Global environment
:Safety and security
:Compliance
:Strengthening group management
:Communication in the workplace
:Global development