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 message to all employees on January 4, 2010, at 11 a.m.

[Condensed version]

Happy New Year!
It is a great pleasure for me to share with you all the start of 2010.

In this new year, we will establish a strong foothold to carry out our medium- to long-term business plans that we put together in 2008. Specifically, we must continue to further curb costs and reduce debt so that we can strengthen our financial position. I encourage you to come up with ideas and suggestions on how to curb costs.

Let me share with you today the three challenges.

Our first challenge is to excel in global competition and grow by developing and refining technologies, which are the foundation of manufacturing. I expect global demand for steel to expand and competition to intensify in the coming years. To beat such competition, I believe we have to sharpen our competitive edge in technologies, costs and sales in Japan and expand in overseas markets. Only when each of our manufacturing bases keeps outperforming its global peers in technologies, costs and sales, will we manage to succeed in all of our ongoing projects.

Therefore, I would like you all to think about how competitive we are at this moment, and where we will be in the global standard in 10 or 20 years. Please take actions while always asking yourselves these questions.

Our second challenge is to work on developing our strengths in the automotive and energy sectors in order to raise our corporate value. Both sectors have medium- to long-term global growth potential. Global environmental consideration requires us to provide means for sustainable growth in these areas.

Sumitomo Metals manufactures numerous world-leading products that help reduce our customers' CO2 emissions. These products include steel sheets for light-weight automobiles and steel tubes for the development of clean energy and highly efficient power plants. I firmly believe we should continue to focus on polishing such areas of strength.

Our last and most important issue is safety and security. The main premise in the continuation of our business is to ensure your safety, the safety of all our employees. At the dawn of the new year, let me remind you all of the basic principle that you should follow safety rules to protect yourself. Similarly, you need to follow rules regarding compliance. Accordingly, let's all think carefully about the meaning of this crucial principle: "We shall follow rules in order to protect ourselves and our family."

Let me now wrap up my message. In the year 2010, we shall, while curbing costs, carry out our medium- to long-term business plans. In this regard we are facing three important challenges. Firstly, we will excel in technologies, costs and sales, which are the foundation of manufacturing, and expand our operations overseas. Secondly, we will strive to reinforce our capabilities in developing environmentally-friendly products in the automotive and energy sectors. Thirdly, nothing is more important than your safety.

Sumitomo Metals' tradition, attitude, and culture of manufacturing have been refined for over 100 years. These are our precious assets. We have inherited them from our previous generation, and we will add more value and pass them down to our younger generation. Based on the Sumitomo spirit, which forms the foundation of our power, we make steel and help our customers make their future. By performing such activities, I firmly believe that we, the Sumitomo Metals Group, can grow and gain the trust of all stakeholders.

Let's all join forces together to achieve the key goals, so we can create a happy and prosperous future for ourselves and our societies.