Sumitomo Heavy Industries Group Environmental Sustainability Report

Environmental Management Division ThinkPark Tower, 1-1, Osaki 2-chome, Shinagawa-ku Tokyo, Japan 141-6025 Phone: +81-3-6737-2325 http://www.shi.co.jp

Printed on paper made with wood from forest thinning. “Morino Chonai-kai” (Forest Neighborhood Association)—Supporting sound forest management. Message from the President

Editorial Policy CONTENTS The Sumitomo Heavy Industries Group issued its i rst Environmental Report in 2001. In 2005, we expanded the scope Message from the President 2 ̶̶̶̶̶̶̶̶̶ of the report to include social aspects and changed its name Engaging in Global Corporate Activity Based on the Outline of Sumitomo Heavy Industries Group ̶̶ 3 to Environmental Sustainability Report. Every year, we widen the scope of social contribution activities and environmental Sumitomo Business Spirit, Our Innovation Relationship between Sumitomo activities, which form the social responsibilities of the Group. Heavy Industries Group and Society 5 ̶̶̶̶̶̶ In addition to promoting environmental management including Will Contribute to the Achievement of a Sustainable Society Highlight ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ 7 activities to prevent global warming, the 2013 Report also introduces our engagement with biodiversity as a form of social contribution. We have also expanded the scope of data on the The Sumitomo Heavy Industries Group is seeking to Together with our overseas Group companies, Environmental Initiatives environmental burden overseas. To convey to a wide audience provide i rst-class products and i rst-class services we will pursue these priority policies: our engagement with environmental and social activities, we that are considerate of the environment, as well as • Promote environmental risk management Environmental Management System 9 ̶̶̶̶̶ have sought to make the report accessible by using plain i rst-class production processes that reduce the • Promote activities to prevent global warming Environmental Objectives and concise language and by making frequent use of graphs, environmental burden in the course of producing • Contribute to the eco society through our products illustrations and photographs. (Medium-Term Plan) and Results ̶̶̶̶̶̶̶ 11 those products and services. We are taking measures • Promote activities that contribute to local communities Further, when issuing this Report, we consulted the Global Warming Prevention Activities ̶̶̶̶̶ 13 Environmental Reporting Guidelines (2012) and the for protection of the global environment and aim These measures will achieve the objectives of the to become a corporation that contributes to the third medium-term environmental plan. Activities Directed Toward Creating Environmental Accounting Guidelines (2005) from the Ministry a Society Based on ̶̶̶̶̶̶̶̶ 15 of the Environment. achievement of a sustainable society. This is a time of great change. Although we face In order to provide the world with environmentally harsh business conditions, the Sumitomo Heavy Activities for Managing Chemical Substances ̶ ̶ 17 considerate i rst-class products and i rst-class services Industries Group will continue further promoting Scope of the report Stronger Environmental Management in a variety of different i elds, our Group will have to activities to protect the global environment. at Our Overseas Factories ̶̶̶̶̶̶̶̶̶̶ 18 Sumitomo Heavy Industries, Ltd. and its group companies declare high objectives and overcome a number of For us of the Sumitomo Heavy Industries Group, Environmental Impact Data ̶̶̶̶̶̶̶̶̶ 21 Period covered by this report issues. our measures to protect the global environment April 1, 2012 – March 31, 2013 With globalization and innovation as our keywords, constitute our response to society’s calls for Relations with Society the Sumitomo Heavy Industries Group is pursuing a engagement, which are changing moment by Previous issue: October 2012 growth strategy that is focused on the global market. moment. The Group will continue listening to our Current issue: October 2013 Social Contribution Activities ̶̶̶̶̶̶̶̶̶ 27 Next issue: October 2014 Thus far we have implemented measures that include stakeholders and taking them seriously. We will building new factories and expanding facilities in continue constantly reforming ourselves, without Disclaimer other countries. ever stopping, so as to achieve the high goals we This report contains not only facts relating to the past and Globalization has brought increasing diversii cation set. present of Sumitomo Heavy Industries Group but also plans, in the cultures and values of our Group employees. We appreciate your opinions and advice, and forecasts, and projections based on management plans and management policy at the date of publication. These plans, I consider it vital for us to make active use of our we hope to draw on them for our future initiatives. forecasts and projections are assumptions and judgments diversii cation as we engage in activities to protect based on available information at the time of writing, and the environment and to take steps for all Group results or matters pertaining to future business activities employees together to communicate and share the could differ materially from the descriptions due to changing Sumitomo Business Spirit, which forms the context conditions. for our environmental protection activities. This year is the last i scal year of the third medium-term environmental plan (FY2011-2013), which started in i scal year 2011.

President and CEO Shunsuke Betsukawa

01 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 02 Outline of Sumitomo Heavy Industries Group The Sumitomo Heavy Industries Group contributes to building an affluent society with “manufacturing” technology Company Outline (as of March 31, 2013) Since its foundation as a repair shop for the Besshi Copper Mine in 1888, the Sumitomo Heavy Industries Group has moved in step with social and industrial development. With a manufacturing Company name Sumitomo Heavy Industries, Ltd. Capital 30,871,650,000 yen Founded November 20, 1888 Number of technology nurtured by a tradition spanning more than 100 years, we make use of proven technologies employees Consolidated: 18,245 that “actuate and control” devices from the world of nanotechnology to gigantic structures to realize Incorporated November 1, 1934 Net sales Consolidated: 585,871 million yen original ideas and dreams. Head Office 1-1 Osaki 2-chome, Shinagawa-ku, Tokyo

Machinery Components Precision Machinery Construction Machinery Industrial Machinery Ships Environmental Facilities & Plants

We handle speed reducers, which are devices for We handle the injection molding machines for An extremely fuel-efficient product, our hydraulic We handle products referred to as heavy machinery. We specialize in midsized tankers with a capacity in We also handle boilers that are 100% biomass fuel lowering the number of motor revolutions and making plastic products, devices for manufacturing excavator was the first construction machinery to They include forging presses for producing the 100,000 ton class. By narrowing down the types compatible, and energysaving effluent treatment raising torque. Taking part in a broad range of liquid crystal and semiconductors, and devices for win the Energy Conservation Grand Prize. Featuring components for automobile engines, large cranes of ships, we have raised development efficiency and facilities. Our products also include exhaust gas markets, speed reducers are used in conveyance diagnosing and curing cancer. Among injection outstanding maneuverability, the Good Design for shipyards and ports, steam turbines for private we take pride in a low fuel consumption that is in the processing facilities that do not use water, and lines at factories, in robotic joints and in the drive molding machines, products that require precision Award is another stellar achievement for the power generation at factories, automated warehouse top class for the industry. facilities for recovering metals from waste. systems of a range of machines. machining are one of our particular specialties. excavator. systems etc.

Main Products Main Products Main Products Main Products Main Products Main Products Power transmission equipment Plastic injection molding machines, cyclotrons for medical Hydraulic excavators Forging presses Ships Power generation systems, industrial wastewater treatment Inverters use, ion accelerators, plasma coating systems, laser Mobile cranes Material handling systems systems, water and systems, landfill processing systems, cryogenic equipment, precision Road machinery Logistics & handling systems leachate treatment systems, air control plants, positioning equipment, transfer molding press machines, Turbines process equipment for chemical plants, reactor vessels, precision forgings, defense equipment Pumps mixing reactors, steel structures, food processing machinery

Machinery Component Precision Machinery Construction Machinery Overseas Locations Industrial Machinery Ships Environmental Facilities & Plants Changes in net sales Changes in operating income Changes in net income (100 million yen) 8,000 (100 million yen) (100 million yen) 6,429 6,241 800 400 America 6,000 5,859 Europe 5,480 Asia 5,162 600 569 300 279 4,000 458 471 400 200 195 283 313 136 133 2,000 200 100 59 0 0 0 2008 2009 2010 2011 2012 (FY) 2008 2009 2010 2011 2012 (FY) 2008 2009 2010 2011 2012 (FY)

Net sales ratio by segment (FY2012) Net sales ratio by region (FY2012) Employee ratio by region (FY2012)

1.4% 0.8% 1.2% 5.3%

13.4% 15.6% 16.5% 7.8% 45% 585.9 585.9 47.3% 18,245 55% Net sales Net sales Net sales billion yen 23.8% billion yen 146 billion yen 37 billion yen 114 billion yen 11.9% 8.4%

Af liated Af liated Af liated 6.3% companies 20 companies companies 12 companies companies 22 companies 26.1% 14.2%

Number of Number of Number of Other employees employees 4,585 people employees 1,989 people 1,526 people Environmental Facilities & Plants Construction Machinery Other Asia (except China) Japan Overseas Japan Ships Machinery Components Oceania China North America Industrial Machinery Precision Machinery Central and Europe South America

03 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 04 Automobile Factories Construction Sites Relationship between Sumitomo Heavy Precision speed reducers Forging press Hydraulic excavator We contribute to reducing the burden on the Industries Group and Society environment worldwide. Delivering a 20% improvement in fuel consumption. First Oil refineries, shipbuilding yards, automobile factories, semiconductor industry and other industrial construction machinery receiving Energy Conservation settings as well as the settings of daily life such as households, hospitals, elevators and escalators: the Grand Prize products of the Sumitomo Heavy Industries Group are involved with all these areas. Here, we introduce (FY2007). No wobbling at inversion Largest in the world at 16,000 several products that take account of the global environment as well as the people who use them. Widely used in fields where precise tons control is required such as welding Plays a part in a range of forging robots etc. scenarios from compact machinery to the world’s largest machines. Mobile Phones, DVDs and CDs Plastic injection molding machine 8 Approaching next to zero waste, defects or 7 difficulty 9 1 Compatible with precision micro molding 11 4

2

Sewage Treatment Plants Diffusion 5 equipment Delivering energy savings 10 by reducing energy consumption at sewage treatment plants 12 Capable of reducing power usage by creating bubbles that are finer Underground Parking Lots than those of conventional diffusers for efficient delivery of oxygen. Mechanical parking garage 6 Maximum effective utilization of limited space 3 Facilitating faster removal times and higher storage capacity (about 170 vehicles per unit)

Sewage Treatment Automobile Factories 1 Sea 3 Warehouse 5 Plants 9 7 Power Generating Facilities 8 Oil Refineries 12 Hospitals Elevators and Oil tanker Forklift 10 Escalators Biomass boiler Coke drums Cyclotron for PET Implementing energy Satisfies all workability, Contributes to the global Responds to wide-ranging customer needs with a We continue to lead in tracer conservation on board comfort, economic efficiency Speed environment by utilizing sophisticated quality assurance system. RI pharmaceutical systems ships and safety standards. diverse fuels. At oil refineries, the for PET systems. Our proprietary technologies reducers We have an abundant lineup from coke drums are deliver energy-conserving Creates power and steam from Discovers cancers of less than 0.9 to 48 tons. capable of processing performance at the a variety of fuels including 1 cm in the early stages. heavy oil in the most international top level. biomass fuels where Automated high-efficiency use has been efficient manner. warehouse system difficult in the past. A history of trust spanning Numerous Proton cancer therapy system more than half a century 2 Harbors achievements in a Steam turbine More compact than the The compact design trims wide-ranging industry Advanced technologies with conventional system weight by 30%. Container transfer crane Streamlines tasks with confidence and results that Capable of pinpointing and picking completely automated respond to the needs of the times. off cancer cells, outstanding in Resolves environmental issues caused by heavy fuel management of 190,000 We are proud to have delivered terms of its gentle therapy effect on consumption, black smoke and other exhaust gases. packing cases. about 6,500 turbines to 11 Televisions and PCs the patient’s body. By adopting a hybrid approximately 80 countries system, we have kept Shipbuilding Yards Semiconductor Factories worldwide. Semiconductor and liquid maximum engine 4 6 output to about 1/3, Dry-type desulphurization- production equipment reduced fuel consumption Large crane Ion implantation system Cryocooler for MRI denitrification system Delivering high positioning by approximately 60%, Contributes to Delivering high precision on the order of systems Contributes to processing and reduced exhaust optimization of productivity with high nanometers gas. precision and high SOx, NOx and dioxins in The simple structure saves labor at use. shipbuilding. We handle the XY stages quality exhaust gas. Cooling to the ultralow temperature of Helps raise the efficiency of used for precision Treats exhaust gas without −269ºC, this is the core of MRI equipment. shipbuilding operation with Compatible with 20 nm positioning of FPD and using water. a lifting capacity of 1,200 ultrafine LSI. Implants ion semiconductor manufacturing tons. in wafers. equipment.

05 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 06 1 HIGHLIGHT 2 Won the “Minister of Economy, Trade and Industry Award” Awarded the Japan Machinery Federation Chairman’s Prize SE-EV series of all-electric QuaPro-R reach forklift What is an injection molding machine? injection molding machines What is a reach This is a device that is used to mold plastic forklift? products. It injects the plasticized resin into Power saving by extended operation and longer battery life; the mold under pressure, filling the mold Characterized by a compact body, Contribution to the promotion of through and forming the product. It is suited to increased efficiency by improved operability this is a type of forklift that the development and practical application of industrial equipment fabricating products with complex shapes operator rides standing up. The in large volume and at low cost, from the chassis is small, giving the forklift with outstanding energy conservation performance plastic lenses of digital cameras to large a small turning radius and making it vehicle components such as bumpers. Our useful in confined spaces. These At the 33rd Outstanding Energy Conservation Equipment Awards (FY2012) all-electric injection molding machines boast At the 33rd Outstanding Energy Conservation Equipment Awards (FY2012) forklifts therefore see all-around (organized by the Japan Machinery Federation), the SE-EV series of all-electric world-class sales in plastics industries. (organized by the Japan Machinery Federation), the QuaPro-R reach forklift use, particularly in warehouses. injection molding machines developed by Sumitomo Heavy Industries was honored developed by Group member Sumitomo NACCO Materials Handling Co., Ltd. as the sole winner of the “Minister of Economy, Trade and Industry Award.” was awarded the Japan Machinery Federation Chairman’s Prize.

The SE-EV series of all-electric injection molding machines reduced electric power consumption by 25% over conventional equipment. We achieved this by developing an integrated system to reduce injection pressure and minimize clamping force, with other unique techniques. At the same time, we also took steps to modify the grease lubrication system, by reducing the number of lubrication points, and reuse of discharged grease. Electric power Discharged We also achieved a 50% reduction of discharged consumption grease Electric power Work efficiency Fatigue level grease over conventional machines. In recognition of consumption these developments, the series won the Minister of Economy, Trade and Industry Award. These devices are developed under the new reduced25 % reduced 50% molding concept, so-called Zero-molding, which reduced24 % raised33 % reduced20 % adheres to “zero defects, zero loss and zero faults.” more intuitive by the use of pictograms. Now the system Zero-molding resolves problems and defects at the also enables the completion of whole processes on The QuaPro-R was developed to have improved riding comfort. In production point and carries the question of how the same screen, and this should minimize errors and meet the demand for energy-saving, addition, we have pursued operating efficiently molded products can be produced to its facilitate settings. In addition to the above, these space-saving forklifts used in the comfort with a turning mode selection ultimate extent. Apart from the hardware aspects of improvements in man-machine interface constitute a transportation, warehouse, and food function for stacking and swiveling, the actual device, we also improved operability of the major advantage for this product. industry. The optimization of acceleration smooth acceleration, and other such user interface. Configuration by touch panel has become Our injection molding machines had shipped a and all other types of control, adoption improvements that give operators cumulative total of 40,000 units by 2004. They are of a highly efficient IPM motor,* the ability to maneuver just as they widely used in the automotive, improving of hydraulic circuits, and want. We have also equipped the other such measures have reduced forklift with a variety of safety precision machinery, and health electric power consumption by 24% measures, including limits on sudden care fields, and the latest model over conventional model. In addition, acceleration when turning or going SE-EV series has already sold the adoption of unique turning down a slope, prevention of rollback over 1,000 units. These injection control has reduced the number of when starting to move from a stop on molding machines work at very times the steering wheel needs to a slope, and a locking function to high speeds of 5-20 seconds per be turned back, yielding a 33% prevent operation when the operator cycle in plastic molding factories. improvement in work efficiency over is absent. The machines may appear very conventional model. At the same We will continue our unremitting simple on first glance, but they time, the fatigue level has also been efforts to improve our technology represent the combination of the reduced 20%. This model achieves with the aim of making devices that finest precision technologies, and the smallest turning performance are environmentally and human are produced as devices that make (practical right-angle stacking aisle friendly. full use of the latest technologies for width) in the industry. the global environment. This forklift has also been given * IPM motor: Synchronous motor with imbedded a design that is operator friendly. The magnets. Magnets imbedded inside the rotor characteristically give the motor greater efficiency lowered floor, use of a low-vibration and torque. IPM motors are used in electric suspension, and other such measures vehicles and other applications.

07 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 08 Environmental Management System

At Sumitomo Heavy Industries Group, we have been promoting environmental management with awareness that business corporations have social responsibilities for protecting the global environment, for preserving the local environment, and for engaging in economic activities that are oriented toward recycling.

Sumitomo Heavy Industries Group Environmental Philosophy ISO14001 Certification President and Evaluation by the President (Once per year) CEO Report by the Executive Board (Four times per year) The Sumitomo Heavy Industries Group contributes to implementing of society by Environmental audit (Once per year) Japan holding fast to the “Sumitomo Business Spirit.” Executive Vice Sumitomo Heavy Industries Group Environmental Twenty-one of the main departments (works, divisions, President Management Committee (Twice per year) Environment and Energy Conservation Conference for Group companies) have acquired ISO14001. In Japan, The Sumitomo Heavy Industries Group is taking action across the Group to protect the global environment.

Prevention of Global Warming (Four to six times per year) Environmental Initiatives Associate Special Patrol for Energy Conservation (According to level of all principal manufacturing divisions have completed Executive Director goal attainment) the ISO certii cation.

Environmental Environmental Environmental Policy Environmental Management Management Division Audit Team Overseas In order to implement the sustainable development We have established an Environmental Management In i scal year 2012, certii cation was acquired by Demag of society, we must respond to global environment Division in the General Affairs Group, which draws up Group Companies Group Companies Works Divisions Plastics Machinery (Ningbo) Co., Ltd., which manufactures issues and reduce the burden on the environment the medium-term environmental plan (the current third within Japan outside Japan plastic injection molding machines, in i scal year 2013 by posed by various aspects of corporate activity. To do medium-term environmental plan runs from FY2011 to Environmental Environmental Environmental Environmental Sumitomo Heavy Industries (Vietnam) Co., Ltd., which so, the Group is promoting autonomous and proactive FY2013), environmental goals on an annual basis, and Committee Committee Committee Committee members members members members manufactures speed reducers and motors in Vietnam, initiatives to protect the environment. develops environmental management across the Group and Sumitomo NACCO Materials Handling (Vietnam) In 1992, we established the Environmental Committee including personnel training. Co., Ltd., which manufactures parts for forklifts. A to promote environmental protection and compliance in In 2011, we assigned an environmental manager total of 13 companies and 14 factories have acquired local communities. In September 1997, we established to Shanghai, China, to promote environmental activity certii cation. This means that 13 of our 20 main the Sumitomo Heavy Industries Environmental Policy monitoring and support throughout China. manufacturing companies are certii ed. in order to drive home the message of environmental management. In addition, in order to clarify the basic policy of activities across the Group, we established the Sumitomo Heavy Works and divisions that have received ISO14001 certification Industries Group Environmental Policy in November Environmental Management Audit and group companies within the scope of certification Works / Divisions Group Companies within the Scope of Certification Date of Certification 1999, expanding environmental management across Japan • Sumiju Plant Engineering Co., Ltd. • Sumiju Business, Ltd. Tanashi Works August 1998 the Group as a whole including overseas facilities. Once a year, the Environmental Management Division • Sumiju Tokki Service Co., Ltd. • Sumitomo (S.H.I.) Construction Machinery Co., Ltd. • Kenki Engineering Chiba Co., Ltd. conducts an audit of each works and Group company. Chiba Works April 1999 • Sumitomo (S.H.I.) Construction Machinery Sales Co., Ltd. The audit covers environmental management as a whole • Sumitomo Heavy Industries Marine & Engineering Co., Ltd. • Sumiju Precision Forging Co., Ltd. and its principal emphasis is on activities to prevent Yokosuka Works • Sumiju Yokosuka Kogyo Co., Ltd. February 1999 • Environmental Engineering Center of Sumitomo Heavy Industries Environment Co., Ltd. Sumitomo Heavy Industries Group Environmental Policy global warming. In order to improve performance and Established November 1, 1999 • Hitachi Sumitomo Heavy Industries Construction Crane Co., Ltd. • Sumiju Tomida Machinery Co., Ltd. Nagoya Works January 1999 to implement continued improvements, the emphasis • Sumitomo Heavy Industries Gearmotors Co., Ltd. • Sumiju Technos Co., Ltd. Consideration is placed on validating and verifying the systems. We Okayama Works • Sumitomo Heavy Industries Finetech, Ltd. March 2000 of the impact on • Sumitomo Heavy Industries Material Handling Systems Co., Ltd. • Sumitomo Heavy Industries Himatex Co., Ltd. also undertake extraordinary audits as the need arises. Ehime Works (Niihama Factory) November 1999 the environment • Sumiju Plant Engineering Co., Ltd. • Sumiju Techno Craft Co., Ltd. The audit results are evaluated on a i ve-point scale around the Ehime Works (Saijo Factory) • Sumitomo Heavy Industries Process Equipment Co., Ltd. • SHI Examination & Inspection, Ltd. February 1999 based on independent evaluation standards for each facilities Prevention of Energy & Environment Group • Sumiju Co., Ltd. October 2002 environmental department, the aim being to raise the levels. pollution Saving energy Overseas Saving resources Group companies in Japan that have independently Group companies outside Japan that have independently received the ISO14001 Promoting The Environmental Management Division undertakes received the ISO14001 certification certification recycling documentation checks and on-site internal audits of each Group Company Date of Certification Group Company Date of Certification Waste reduction overseas corporation with the principal objective being Sumitomo NACCO Materials Handling Co., Ltd. March 2000 Sumitomo (SHI) Demag Plastics Machinery GmbH (Wiehe factory) April 1998 activities to prevent global warming and environmental Shin Nippon Machinery. Co., Ltd. February 2002 Sumitomo (SHI) Cyclo Drive Germany GmbH March 2006 risk reduction. Izumi Food Machinery Co., Ltd. June 2002 Sumitomo (SHI) Cryogenics of Europe, Ltd. June 2008 SEN Corporation October 2002 Ningbo Sumiju Machinery, Ltd. September 2008 Audits were conducted in i scal year 2012 at four Sumiju Environmental Engineering Inc. October 2002 Dalian Spindle Cooling Towers Co., Ltd. December 2008 factories in China, two factories in the Philippines, and Sumitomo Heavy Industries Environment Co., Ltd. November 2002 SHI Manufacturing & Services (Philippines) Inc. January 2011 two factories in Europe. Lightwell Co., Ltd. February 2005 Sumitomo (SHI) Cyclo Drive China Ltd. May 2011 In i scal year 2013, audits will be conducted at eight Nihon Spindle Mfg. Co., Ltd. March 2006 Sumitomo (SHI) Demag Plastics Machinery GmbH (Schwaig factory) July 2011 Japan Electron Beam Irradiation Service Co., Ltd. January 2007 Link-Belt Construction Equipment Company August 2011 factories in China and two factories in Vietnam. Sumitomo Heavy Industries PTC Sales Company September 2007 Suminac Philippines Inc. September 2011 SFK Co., Ltd. August 2008 Sumitomo Heavy Industries (Tangshan), Ltd. March 2012 Seisa Gear, Ltd. August 2009 Demag Plastics Machinery (Ningbo) Co., Ltd. December 2012 Sumitomo Heavy Industries Modern, Ltd. December 2009 Sumitomo Heavy Industries (Vietnam) Co., Ltd. May 2013 Sumitomo NACCO Materials Handling (Vietnam) Co., Ltd. June 2013

09 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 10 Environmental Objectives (Medium-Term Plan) and Results

Sumitomo Heavy Industries Group formulated the third medium- term environmental plan, for which FY2013 is the i nal year, and is working to reduce environmental impact.

Overall view of the FY2012 environmental impact (Sumitomo Heavy Industries Group, domestic) Activities in FY2012 – General Overview We are promoting our third medium-term environmental plan (FY2011-2013) based on lessons learned with the second INPUT OUTPUT medium-term environmental plan. The status of achievement of FY2012 activities is as follows.

Evaluation: ◎ Achieved ○ Achieved by 70% or more △ Achieved by less than 70% Environmental Initiatives

Index Item Third Medium-Term Plan (2011-2013) Targets in FY2012 Achievements in FY2012 Evaluation CO2 Emissions 61,200t Energy Environmental Zero environmental accidents Continue zero environmental accidents Zero environmental accidents (legal ① Zero environmental accidents (legal violations) Management (legal violations) (legal violations) violations) ◎ Crude oil equivalent 39,295kℓ Chemical substance transfer Reduce CO2 emissions by 18% from and release amounts ① Reduction in CO2 emissions at Reduction by 19% from the FY2004 level by 36% reduction compared to FY2004 FY2004 level (27% reduction over ◎ works and offi ces FY2013 (28% reduction over FY1990 levels) (43% reduction compared to FY1990) Sumitomo PRTR Substances 767t FY1990 levels) Water Resource 1.154 3 million m Emission of Air Pollutants Waste ② Improved energy productivity Heavy Energy productivity = Net 2 * By FY2013, a 7% improvement in the energy Improvement by 6% compared to Improvement by 18% compared to VOC 548t sales/CO2 emissions (CO2 productivity indicator compared to FY2008 FY2008 FY2008 ◎ Steel purchase Industries NOX 3.6t reduction due to productivity improvements at factories) volume 109kt SOX 1t Prevention of Global Warming Achieve four points of a maximum fi ve-point Group Raising scores for process ③ score as in-house benchmark for process Average score 3.4 points Average score 2.9 points Discharge into the water improvement ○ improvement activities across all departments Paper 49 million sheets COD 1t Reduction by 45% from FY2005 level by Reduction in paper usage Reduction by 44% from the FY2005 level 54% reduction compared to FY2005 (A4 paper equivalent) T-N 2.2t ④ FY2013 ◎ T-P 0.1 Promotion of green logistics 13% reduction per basic unit of t ⑤ By FY2013, 14% reduction per basic unit of Chemical substance Reduction in CO2 emissions in transportation against FY2006 4% reduction compared to FY2006 transportation against FY2006 benchmark ○ transfer and Waste transportation benchmark release amounts Total Amount 28,116t • 13% reduction in amount generated • 12% reduction in amount generated 965t • 17% reduction compared to FY2007 ◎ *1 ① Reduction in volume of waste compared to FY2007 compared to FY2007 PRTR substances • Amount disposed of is 0.01% of Recycling Amount 28,113t generated and disposed of • Amount disposed of is less than 0.05% of • Amount disposed of is less than 0.5% amount generated Promotion amount generated of amount generated ◎ *1 PRTR: Pollutant Release and Transfer Register of Resource Continue achieving zero emissions *2 VOC: Volatile Organic Compounds Conservation and Achievement of zero emissions Achieve zero emissions factories Achieved by all divisions ② factories ◎ Recycling • 24% or greater reduction compared Reduction by 25% or more from the FY2005 40% reduction compared to FY2005 Reduction in water usage to FY2005 ③ level • Achieved by all divisions ◎ • Reduce non-attaining divisions to zero • Continuing complete abolition of • Continue complete abolition of dichloromethane Emission control of ① dichloromethane, trichloroethylene and • Continuing complete abolition of Environmental Accounting for FY2012 organochlorine chemicals tetrachloroethylene trichloroethylene (Soil Contamination Use completely abolished • Continue complete abolition of ozone- • Continuing complete abolition of ◎ As a yardstick for measuring the investment, expenditure and effect of environmental protection, we have conducted Countermeasures Law, depleting substances HCFC-141b, tetrachloroethylene Montreal Protocol) environmental accounting in accordance with the Environmental Accounting Guidelines, 2005, issued by the Ministry of HCFC-225 • Continuing complete abolition of HCFC-141b and HCFC-225 the Environment. Promotion of Emission control of substances Prevention of ② designated as VOC (Air Pollution Reduced by 33% from the FY2006 level Reduced by 32% from the FY2006 level 45% reduction compared to FY2006 Unit: million yen Environmental ◎ Control Law) Pollution Costs for environment protection Effectiveness of environmental protection • Complete early registration with the Japan Environmental Safety • Early registration of equipment with Investment amount Costs Economic effect Total abolition of equipment Corporation of equipment with high ③ high concentrations of PCB completed Category Details of the main activities and the effects Main content that uses PCB (Law Concerning concentration of PCB. Dispose of Total prohibition of use • Survey of low concentration is 2011 2012 2011 2012 2011 2012 Special Measures Against PCB appropriately after receipt of disposal ◎ complete (survey of welding machines, Waste) notice (1) Costs within Maintenance and amortization of environmental impact reduction etc. still remains) 727 602 473 551 1,001 562 • For low concentrations, replace and Business Areas (Sites) equipment and facilities store in accordance with plans (1) - 1 Maintenance management of facilities for prevention of air pollution and Reducing cost of wastewater Costs for 178 48 209 174 39 73 • Review Green Procurement Guidelines; water pollution and measurement of noise and vibration of facilities treatment Preventing Pollution Develop regulations for prohibited (1) - 2 Cost reduction with Expansion • Review Green Procurement Guidelines, substances • Continue in accordance with Green Investment in energy-saving measures (electric power monitoring, Promotion of measures for Costs for Global 406 447 102 35 438 216 introduction of energy of Line-up of ① eliminate prohibited substances • Expansion in environmentally friendly Procurement Guidelines energy-saving equipment, lighting upgrades, etc.) green procurement (purchase of Environment Protection conservation, natural energy Environmentally • Expansion in environmentally friendly products: 15 or more certifi ed products • Number of certifi ed environmentally ◎ raw materials and components) Reducing landfi ll by separating Friendly Products products (products considerate of environment friendly products: 15 products (actual) Breakdown (1) - 3 69 0 rubbish, cost reduction by by energy saving, lighter weight, low Resource Recycling Investment in waste material reduction and recycling (recycling, reuse) 143 108 162 342 cutting back on waste noise, chemical substances, etc.) Costs Proceeds from sale of 455 273 Planning and implementing certifi cation Three overseas Group companies Three overseas companies acquire valuables, etc. Increase in the number of ① acquisition in Group companies including acquire certifi cation for total of 12 certifi cation (2) Upstream and Reduction of product packaging material, recycling of appliances, use of ISO14001 certifi cations ◎ 0 0 1.4 56.8 overseas companies companies certifi ed Total 13 companies acquire certifi cation Downstream Costs reverse side of paper (3) Management Activity Administration and maintenance of ISO 14001 standards, expansion of • Implementing environmental surveys 49 45 180 146 Costs green areas at principal overseas manufacturing (4) Research and Research and development to reduce the environmental impact of • Local guidance by head offi ce, periodic bases and environmental audits at 580 1,384 735 1,316 Development Costs products, research and development of environmental equipment environmental audits overseas factories (China, Southeast Environmental Expansion of the scope of the • Post full-time staff to Shanghai, create Asia, EU) ② Expand to principal overseas manufacturing (5) Social Activity Costs Local environmental protection and greening activities 0 0 7 8 Management Consolidated Environmental a network • An environmental management offi cer bases ◎ (6) Cost of dealing with Levies on air pollution loads; share of green belts and pollution Management • Raise the level of education for was assigned to Shanghai, a head 0 0 0.01 0.06 environmental damage compensation environmental managers at Chinese offi ce-Shanghai-China factory network factories was created, and conducted training Total 1,355 2,032 1,396 2,078 1,001 562 to raise the level of environmental managers Expand tree-planting and growing programs Expand tree-planting and growing Systematic tree-planting and growing Contribute to biodiversity ③ at factory premises programs at factory premises programs in all areas ○

11 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 12 Global Warming Prevention Activities

In its business activities, including procurement, manufacturing and logistics, Sumitomo Heavy Industries Group has been taking measures to reduce CO2 emissions by positioning it as the most important issue.

Promoting Environmental Management factories in countries like China, where the CO2 emissions Promoting Green Logistics Paper usage (A4 paper equivalent) In the Sumitomo Heavy Industries Group, activities to prevent coeficient is higher. For iscal year 2012, we achieved the In transportation, we have been making efforts to Amount of paper used Target value Basic sales unit (1 million sheets) (Sheets/million yen) global warming are positioned as a part of environmental target value for the year with a 7% reduction in emissions. reduce CO2 emissions by eliminating waste and by 120 240 management with discussions conducted at evaluations The combined target value for Japan and other improving eficiency. With FY2006 as the benchmark 100 200 by the President on visits to the manufacturing loor. The countries is total emissions of 161,000 tons, which year, we aimed to achieve an 13% reduction in the basic Environmental Initiatives

results from each business division are fed back for represents a 19% reduction from the iscal 2004 reference unit of transportation (t-CO2/weight) in FY2012. We 80 160 monthly processing at the Environmental Management value in Japan and an annual 2% reduction in other promoted such measures as improving loading ratios Division. The results are also announced at the quarterly countries. The target was achieved with an actual igure and switching to modal shift in iscal year 2012, but the 60 120

meetings of the Executive Board. of 139,000 tons, which represents a 14% reduction reduction was limited to 4% due to the decline of sales 40 80 Each division in the Group promotes activities to from the target value. in other countries relative to the reference year and the 105 68 49 54 53 49 58 20 40 prevent global warming and is engaged in activities increase in long-distance truck transport to the Tohoku to improve a range of processes in order to further Improvement of energy productivity Region to meet earthquake recovery demand. In terms 0 0 2005 20082009 2010 2011 2012 2013(FY) Reference Target enhance the eficient use of energy and to “visualize” Starting in iscal year 2009, Sumitomo Heavy Industries of total CO2 volume, however, the reduction was 37%. activities and initiatives through “the participation of all Group has been taking the characteristics of Group For our iscal year 2013 activities, we are setting a target employees.” businesses into account and using the new uniied index of 14% reduction relative to iscal year 2006.

of energy productivity (net sales/CO2 emissions: the Reducing CO2 Emissions reciprocal of the basic unit) in Japan. We are pursuing Environmentally Friendly “First-Class Products” The Sumitomo Heavy Industries Group started to take management and operation on a monthly basis at each The Sumitomo Heavy Industries Group has created action in FY2005 with the First Medium-Term Environmental business unit (BU). systematic and voluntary standards across the Group

Plan to reduce CO2 emissions by 10% from FY2004 For iscal year 2012, we declared a 6% increase such as carrying out Lifecycle Assessments*, improving levels by FY2007. As of FY2011, we launched the Third over iscal year 2008 as the target for our program. recycling rates at the time of disposal, reducing the Medium-Term Environmental Plan aiming to further We achieved this target with an 18% increase at our volume of packaging, curtailing harmful substances

reduce CO2 emissions by 19% from the FY2004 level by principal production bases in Japan. contained in products, and developing products that FY2013. Compared to the benchmark year of FY1990 The target for our programs in other countries was consume less energy, weigh less, are more compact and for the Kyoto Protocol, the target is to achieve a 28% set at 1% increase year on year. We achieved this target last longer. We have launched initiatives for continuous reduction. in iscal year 2012 with an increase of 5.3%. improvements and evaluation based on these standards. In FY2012 we were able to control emissions The combined igure for Japan and other countries In iscal year 2012, therefore, we have been able Using ships to achieve a modal shift to far exceed the target with a 36% reduction (21% shows a 6% decline because of the increase in CO2 to add another four products to the 11 “environmentally reduction in the basic unit) over FY2004 levels and a overseas. friendly irst-class products” we had already designated. CO2 emission through logistics 43% reduction over FY1990 levels. Going forward, we will continue to promote the The 11 products were the biomass boiler, compact For other countries, we have set a target of 2% following measures. CO2 emission tons Target value Actual value 25-ton biomass boiler, and dry-type desulphurization (1,000 t) Basic unit (t-CO2/weight) Concentrate operating hours (promote mass equipment (Energy & Environment Group); hydraulic reduction year on year taking production increases ❶ 15,000 0.025 into account. The emissions volume is trending upward holidays) excavator and asphalt inishers (Sumitomo (S.H.I.) because of the new establishment and expansion of ❷ Minimize standby power (reduce the amount of 12,000 0.020 Construction Machinery Co., Ltd.); bag ilter (Nihon power used by machine tools on standby) Spindle Mfg. Co., Ltd.); electric-powered reach forklifts ❸ Minimize working times 9,000 0.015 (Sumitomo NACCO Materials Handling Co., Ltd.); plastic CO2 Emissions Make effective use of equipment and facilities injection molding machines (Plastics Machinery Division); ❹ 6,000 0.010 Japan Other countries turbines with longer blades (Shin Nippon Machinery Co.,

(10,000 t-CO2) 16.11 15.79 13,726 11,061 6,647 7,855 8,869 8,651 11,804 3,000 0.005 Ltd.); hot forging presses (Industrial Equipment Division); 15 13.85 Energy productivity and dividing-wall distillation columns (Sumiju Plant In Japan In other countries In Japan and other countries Target in Japan Target in other countries 0 0 12 2006 20082009 2010 2011 2012 2013 (FY) Engineering Co., Ltd.). The four added products are (1 million yen/t-CO2) Reference Target 4.004.67 5.12 6.60 7.73 8.23 8.06 8.0 kiln equipment (Energy & Environment Group); a hybrid 9 electric power source for transfer cranes (Sumitomo 6.07 6.13 6.19 6.24 Activities to Reduce Paper Usage 5.83 5.95 Heavy Industries Material Handling Systems Co., Ltd.); 6 6.0 Reducing paper use is part of activities to save resources the Cle-Eco Ⅲ (Nihon Spindle Mfg. Co., Ltd.); and the 10.67 9.54 8.44 6.79 7.21 7.00 6.12 7.83 7.73 5.83 5.77 6.08 6.88 6.89 6.24 and at the same time, it is linked to activities to prevent SHX-III/S ion implantation system (SEN Corporation). 3 4.0 4.38 3.97 4.21 4.62 4.10 global warming such as reducing CO2 emissions in the 0 papermaking process. In FY2013, the Sumitomo Heavy * Lifecycle Assessment: A method of objective and quantitative evaluation of (FY) 1.671.69 1990 2004 20082009 2010 2011 20122012 2013 2.0 1.65 1.70 environmental impact throughout the lifecycle (all stages from extracting the Reference Target Target Industries Group aims for a 45% reduction compared resources to manufacturing, use, disposal and transportation) of products and services * For Japan, the FY2000 igure of 3.78 (t-CO2/10,000 kWh) from the Federation of to FY2005 levels. 1.87 1.40 1.65 2.07 1.92 1.70 Electric Power Companies of Japan was used as a ixed emissions coeficient. 0 In FY2012 we exceeded the target of a 43% For other countries, the FY2005 igures from the GHG Protocol were used as 2008 2009 2010 2011 2012 2013 (FY) Reference Target ixed coeficients. reduction over FY2005 levels with a reduction of 54%.

13 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 14 Activities Directed Toward Creating a Society Based on Recycling TOPICS Energy-saving activities at Nihon Spindle Mfg. Co., Ltd.

We are working to limit the discharge of waste material from Nihon Spindle Mfg. Co., Ltd., which is a member of our The Environmental Committee takes the lead in all Group, is a development proposal-type enterprise with of the company’s environmental protection activities. It business activities, as well as to recycle and make effective use of a demonstration center. It develops and manufactures engages in detailed monitoring with energy-saving patrols, dust collectors, clean rooms, precision air-conditioning improvement programs, and other such activities. The that material. equipment, machine tools, tire manufacturing equipment, Energy-Saving Committee is responsible for headquarters cooling towers, building materials (schoolroom partitions, functions, working from reports and other input provided etc.), etc. by the Environmental Committee to formulate improvement The main factory of Nihon Spindle Mfg. Co., Ltd. plans and issue instructions for implementation and so on. Measures to reduce environmental impact total waste (the landill rate) is less than 0.5% as zero is located in Amagasaki City, Hyogo Prefecture. An These two organizations have further increased Environmental Committee was set up there, and in iscal the company’s capabilities for promoting energy-saving In order to build a recycling-oriented society, we at the emissions factories. We have been promoting this Sumitomo Heavy Industries Group are controlling the program since FY2005, and as a result in FY2012 we year 2011, an Energy-Saving Committee was also activities, and the company has cleared all the Sumitomo established that includes managers from each of the Heavy Industries Group environmental targets. discharge of waste from our business activities, recycling achieved zero emissions at all seven works and all eight company’s three business divisions as members. waste, and making eficient use of resources as well Group companies. We were also able to achieve a zero Environmental Initiatives as working on initiatives to reduce the burden on the emissions rate of 0.01% for the SHI Group as a whole, greatly exceeding the target. We are operating in other environment through our business activities. Plan improvement countries with the target of making less than 10% of total waste go to landill. In iscal year 2012, the igure Limiting the generation of waste and reducing the was 2.2%, which achieved the target. Organization amount of waste discarded The combined igure for Japan and other countries Energy-Saving Committee Strong Deep probe for leadership Implement In Japan, our target for the amount of waste discharged shows that the shift to recycling is progressing smoothly, (Business division managers) improvement and the percentage of waste going to landill was 0.7% improvement in iscal year 2013 is a 13% reduction relative to iscal Detailed monitoring Environmental Committee Facility maintenance and year 2007. In iscal year 2012, we worked to increase the in iscal year 2012. Recycling by separation of waste Enact improvement production technology programs (Activity teams) eficiency in production activities, do away with waste, and materials is crucial for the achievement of zero emissions. limit the amount of metal scrap and other such waste We intend to continue with rigorous separation of waste generated. As a result, emissions amounted to 28,116 so that we can maintain zero emissions, and our aim is Verify effectiveness to have factories that are kind to the global environment. tons, which was a 17% reduction from iscal year 2007, Energy-saving patrols and which achieved the 12% reduction target for iscal Zero emissions of waste year 2012. The target for the amount of waste discarded In Japan In other countries Total Two organizations for increased promotion capability was under 0.5% of emissions, and the 3.4 tons of Final disposal of waste (landfill rate) (%) waste discarded in iscal year 2012 was only 0.01% of 12 emissions, which exceeds the target by a signiicant 10 margin. In terms of basic units, this represents a 3% 8 11.5 10.3 9.0 10.0 Examples of Energy-Saving Activities increase. 6 The combined igure for Japan and other countries 4 3.4 1. Energy saving in machine tools 3.1 2.8 2.6 2.2 shows an increasing trend in emissions due to production 2.4 2 The following measures were implemented to save increases in other countries. In terms of basic units, 0.77 0.9 0.5 0.05 0.01 0.71 0.5 energy with machine tools that consume more however, the trend is diminishing. 0 20082009 2010 2011 2012 2013 (FY) electric power. Target Waste generated • Reduce standby power for machine tools 4-8% per day by standardizing work and upgrading Waste generated in Japan Waste generated in other countries Target in Japan Reducing Water Consumption Waste disposed of in Japan Waste disposed of in other countries maintenance (cleaning and replacing filters, (t) (t) Reducing water consumption is linked to protecting 60,000 6,000 changing oil, etc.) Change to double-paned windows Skylights in factory roof 56,206 resources and reducing discharge into public water • Reduce standby power for machine tools 34-65% work shifts, indoor temperature settings, reduction in the number 50,000 5,000 systems. The SHI Group has set a target of reducing water 17,775 22,465 24,205 25,000 28,090 28,000 per day by improving hydraulic actuation circuits of lights turned on, and so on. The following equipment investments 40,000 4,000 consumption in FY2013 by 25% compared to FY2005 33,880 34,014 were also made on an emergency basis. As a result, the company met 30,000 3,000 2,652 29,761 levels. In FY2012, we continued to install visible water pipes 28,020 31,216 28,116 29,475 2. Green logistics or exceeded the required government target (17% or greater reduction 20,000 2,000 (aboveground installation) in order to identify water leaks 2,800 A full-time logistics team controls logistics operations for the whole at peak times) and cooperated throughout the power-saving period. 10,000 2,053 2,321 2,167 650 609 1,000 and eliminate waste. As a result, we achieved a 39.5% company. Continuous engagement in measures like the following • Convert to gas heat pumps for office air conditioning (power saving 808 147 0 271 143 16 3 0 reduction from FY2005 levels. For FY2013, we will aim for resulted in a 30% improvement (basic unit CO2/deadweight tons) of 2.50% per month) 2007 20082009 2010 2011 2012 2013 (FY) further reductions without allowing ourselves to be limited Reference Target in fiscal year 2012 relative to the reference year (FY2006). This • Change office window sashes to double panes (power saving of by target igures. We have also been engaging in reduction achieved the Group target. 1.50% per month) Waste generated (basic sales unit activities in other countries since iscal year 2010. Basic unit for waste generated in Japan Basic unit for waste generated in other countries • Improve loading ratios by placing vehicle dispatch list on company- • Change to inverter compressors (power saving of 0.10% per month) Combined igures for Japan and other countries Basic unit for waste generated in total wide network and coordinating among business divisions • Increase number of skylights in factory roof (power saving of 0.20% t/million yen also show a diminishing trend. per month) 0.40 • Promote consolidation (shipping jointly with other companies) of 0.34 Water use Basic unit for water used in Japan loads with nearby companies • Install power monitors on main facilities and equipment (power Basic unit for water used in other countries 0.30 • Promote modal shift using railway container transport, etc. saving of 1.00% per month) Use in Japan Use in other countries Basic unit for water used in total 0.20 • Change spot coolers to cool air blowers (power saving of 1.96% per 0.19 (1,000 m3) (m3/million yen) 0.20 0.16 0.15 0.15 0.15 2,500 10.0 3. Measures to deal with electric power supply shortages month) 0.16 0.10 0.12 0.13 In order to deal with electric power supply shortages during the • Upgrade factory electric fans to energy-saving models (power 2,000 8.0 0.066 0.071 0.078 0.066 0.067 0.068 314 277 295 1,526 370 summer of 2011, the company enacted power-saving measures in saving of 0.37% per month) 0 1,500 293 6.0 20072008 2009 2010 2011 2012 (FY) 373 1,000 4.0 Zero Emissions in FY2012 Achieved by Entire SHI Group 500 2.0 We intend to continue with efforts in environmental protection and electric power saving through measures like these to reduce standby power to 1,907 1,574 1,439 1,425 1,269 1,154 1,430 equipment and by working steadily on cumulative activities. We also intend to expand the environmental protection activities and energy-saving The SHI Group has deined factories at which the amount 0 0 2005 2008 2009 2010 2011 2012 2013 (FY) activities at the company’s factory to our factories in China and Malaysia, to promote overseas programs to reduce CO2 emissions, as well. of waste disposed of as landill as a percentage of Reference Target

15 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 16 Activities for Managing Chemical Stronger Environmental Management Substances at Our Overseas Factories

We manage chemical substances with the aim of implementing Sumitomo Heavy Industries Group is strengthening environmental prevention of environmental pollution. risk management and global warming prevention measures at overseas factories.

Complete Abolition of Organochlorine Chemicals Emissions and Transfer of PRTR Substances Stronger Environmental Risk Management Complete abolition of substances subject to the Soil More than 90% of PRTR substances are paint solvents Stronger environmental management system at our overseas factories Reinforcing environmental pollution prevention programs Contamination Countermeasures Law (toluene, xylene, ethylbenzene). In FY2012, we reduced Sumitomo Heavy Industries Group has been continuously China and the countries of Southeast Asia are In FY2011, we completed eliminating any use of these substances by 42% of the level in FY2006. This reinforcing management systems in order to strengthen strengthening their environmental standards every year.

dichloromethane, tetrachloroethylene and trichloroethylene, also represents a 34% reduction in terms of the basic environmental risk management at factories in other We are continuously expanding the scope of management Environmental Initiatives which are organochemical substances subject to the Soil sales unit. We will continue to expand the use of low- countries. We have assigned full-time environmental activities at every factory in order to respond to the Contamination Countermeasures Law. We maintained solvent paint while ensuring that we maintain the quality managers at every overseas factory. At factories where stronger environmental standards in that country. this total elimination of use in FY2012. of our products. We will also install and expand solvent production is on the rise, as in China, in particular, we In iscal year 2012, the speed reducer factory in collection and removal equipment to reduce the emission are promoting further measures, such as increasing the Vietnam installed a new wastewater treatment facility in number of those managers. response to stronger environmental standards instituted and transfer of PRTR substances. Total abolition of ozone depleting substances at the industrial park where it is located. We totally eliminated use of the ozone-depleting Emissions and transfer volume of Class I Designated Chemical Substances Strengthening Environmental Management in China In addition, the forklift parts factory in the Philippines substance HCFC-225 in iscal year 2008, and that of under the PRTR Law in FY2012 (Substances subject to reporting) Out of all our Group factories in other countries, the largest has taken steps to reduce the risk of environmental HCFC-141b in iscal year 2010. We maintained the total Emissions + number in operation by region is in China, where there are pollution by voluntarily installing a water-sealing plate Substance number Substance designation transferred amount elimination of such use in iscal year 2012. 53 Ethylbenzene 153,167 eight. We therefore have a special management system as an emergency shutoff that will prevent factory 80 Xylene 396,825 for environmental management matters, as well. In iscal wastewater from being discharged into the public sewer 240 Styrene 1,394 year 2011, we established a department in Shanghai to if a fault occurs. The installation of this water-sealing Emission Control of VOC (Volatile Organic Compounds) 296 1, 2, 4-trimethylbenzene 2,319 handle centralized environmental management for the plate has been treated as an advanced example of 297 1, 3, 5-trimethylbenzene 6,947 China , and in iscal year 2012 we added one new activity to prevent pollution of the environment, and it Toluene, xylene and ethylbenzene in paint solvents 300 Toluene 155,622 staff member as part of our further strengthening of the has been publicized as such within the industrial park. account for over 90% of the VOC we use. Our goal is to 349 Phenol 791 374 Hydrogen fluoride and its water-soluble salts 24,284 system. reduce emissions of these chemicals by at least 33% by 384 1-bromopropane 7,292 In China, we have been ahead of other regions in Promoting environmental audits at factories in other FY2013 compared with the level in FY2006. 392 Normal hexane 1,128 establishing environmental management meetings like countries 405 Boron and its compounds 1,900 The amount of coating we used in shipbuilding those held at our factories in Japan. We began holding 412 Manganese and its compounds 8,816 The head ofice Environmental Management Division during iscal year 2012 diminished, and further reductions * Emissions + transferred amount is the total amount for Sumitomo Heavy Industries these meetings there in iscal year 2011, bringing together conducts periodic audits of our factories in other were achieved by the operation of solvent collection and and all Group companies the environmental managers from each of the factories countries. In order to reduce the environmental risk at removal equipment at our large-scale paint facilities Emissions and transfers of PRTR substances in China to hear explanations of environmental policy overseas factories to the same level as at factories

that are subject to legal controls. Promotion of these Emissions in Japan Emissions basic unit from the head ofice in Japan, to report on the status in Japan, these environmental audits check the and other reduction measures yielded a 46% reduction (t) Basic unit for PRTR emissions and transfers (kg/million yen) of environmental management at their factories, and to environmental management activities at each factory, 1,500 2.80 3.0 work on raising the level of environmental management applying the same audit standards as at factories in relative to iscal year 2006. This was also a 37% 2.55 2.60 2.20 at each factory. Japan. reduction in terms of the basic sales unit. Measures 1,200 2.08 2.4 In iscal year 2012, the meeting venue began to The frequency of audits is determined according to to control VOC emissions in FY2013 will continue from 1.85 900 1.8 be shifted from factory to factory in turn, and on-site the environmental risk at the factory in question, taking FY2012 through such steps as the operation of solvent 600 1.2 environmental patrols are being carried out by all the local environmental requirements into consideration. In collection and removal equipment, the expanded use of 1,316 1,228 993 939 972 767 participants together at each meeting venue factory. iscal year 2012, environmental audits were conducted 300 0.6 powder paint, and the adoption of low-solvent paints to On-site environmental management is said to require at eight of our factories in the China, Europe, and control emissions. 0 0 experience and practical management know-how. The Southeast Asia areas. 2006 2008 2009 2010 2011 2012 (FY) environmental managers at our China factories have At the same time that audits are conducted, VOC emissions TOPICS relatively few years of experience, so we are using these environmental managers and oficers are also given environmental patrols to improve the management know- training in activities to prevent environmental accidents Emissions in Japan Emissions in other countries Management of PCB (Polychlorinated Biphenyl) and Total Basic unit in Japan Basic unit in other countries Basic unit total Abolition of Equipment Containing PCB how and knowledge of the participants as well as to and in energy saving. (t) Basic unit for VOC emissions (kg/million yen) disseminate that know-how and knowledge laterally to 1,000 2.0 We have completed early registration of all equipment with high 2.09 every factory. 1.90 2.01 1.76 concentrations of PCB with the processing company, Japan 800 680 1.75 Environmental Safety Corporation, and we have undertaken a 1.58 130 600 132 1.5 systematic course of detoxiication based on the Law Concerning 1.32 Special Measures Against PCB Waste. Until FY2011, this material 400 1.21 1.25 was processed at the Tanashi Works, Okayama Works, Nihon

200 0.89 1.0 Spindle Mfg. Co., Ltd., and Izumi Food Machinery Co., Ltd. 984 915 767 754 736 548 659 The survey of equipment with low concentrations of PCBs was 0 0 20062008 2009 2010 2011 2012 2013 (FY) furthered and updated in FY2011. Study is underway regarding Target treatment of items presently being stored. In FY2011, we also undertook a major upgrade with regard to lighting equipment with stabilizers and transformers containing PCBs. Environmental management meeting in China Environmental audit at an overseas factory

17 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 18 Stronger Environmental Management at Our Overseas Factories

Promoting Global Warming Prevention Activities Waste reduction measures

CO2 emissions are trending upward at Sumitomo Heavy ceilings for lighting. Now luorescent light-type LED —Measures in the United States— —Measures in Brazil— Industries Group’s factories in other countries because lights have been installed close to the machines to At the construction machinery factory in the United People at the speed reducer factory in Brazil drink a of the construction of new factories and the expansion illuminate each machinist’s work area. States, a company-wide program is being promoted to great deal of coffee in the factory. At irst, disposable of production at existing factories. In addition to their lower power consumption, LED reduce the amount of waste generated by the factory. cups were used, and most of the cups were disposed Environmental Initiatives Our Group is setting targets for the reduction of lights turn on instantly. This means the lights can be turned The waste material that used to be treated as of as waste material. However, local employees who

CO2 emissions at factories in other countries, and we on only when needed, so that power consumption can landill is now being sorted carefully by category. The wanted to help reduce waste came up with an idea are promoting activities to prevent global warming. be reduced rationally. The LED lighting at this factory sorted waste is collected under a program to increase themselves: They made heat-retaining cups carrying In iscal year 2012, we set reduction targets for all was also installed in a way devised by the production the amount of waste that can be recycled and reduce the company logo for individual use, and distributed our factories in other countries and promoted activities engineering manager to match with the speciic work the weight of landill material. one cup to every employee. This made it possible to to reduce CO2 emissions. As a result, we achieved the being done. New waste collection boxes for recycling material eliminate the use of disposable cups. target value for total emissions of 82,300 tons with the have been placed in the factory. Once a week, employees actual igure of 77,315 tons. We will continue promoting also check through the waste yard for landill material to reduction activities that are geared to achieving future retrieve any recyclable waste that is mixed in. reduction targets.

Activities to Reduce Electric Power Consumption by Improvements to Factory Interior Lighting At the speed reducer factory in Germany, wall surfaces were almost all converted to glass windows to introduce large amounts of natural light in some workplaces. Electric power for lighting in these workplaces was further reduced by installing new devices that automatically Checking recyclable waste dim and brighten the interior illumination according to the Fluorescent-type LED lighting installed close to machine tools Drinking from a heat-retaining cup for exclusive in-house use amount of sunlight. At the forklift parts factory in Vietnam, the machine workshop areas used to have mercury lamps on the Promoting environmental protection activities at —Measures in Vietnam— factories in other countries Bin for recyclable waste in the factory At the speed reducer factory in Vietnam, the raw garbage generated at the dining hall in the factory is Sumitomo Heavy Industries Group’s factories in other A unique logo mark has also been created as a not treated as landill waste. Instead, a program is being countries face differing environmental requirements symbol for waste reduction activity. Not only is this conducted in cooperation with local livestock farmers according to the factory location. In order to meet these logo used at exhibitions of waste reduction activity in to use the garbage as animal feed and other such different demands, we promote environment management the factory, but it is also displayed on tape and other purposes. activities that are characteristic of those various factories. such materials used in packing construction machinery parts that are shipped from the factory. In addition Measures for conservation of natural resources to improving awareness of waste reduction within the The water used at the speed reducer factory in Brazil is company, this logo also publicizes the commitment to ground water, and a well has been dug on the grounds waste reduction to people outside the company. where the water can be pumped up. In order to reduce the amount of water pumped from the well, domestic wastewater and other such water is treated in a wastewater treatment facility installed at the factory, and the treated Interior view of the factory with walls converted to glass water is used for such purposes as watering grass and trees on the grounds.

Recycling logo mark Logo mark displayed near a bulletin board

Automatic light-adjusting device Wastewater treatment facility Cardboard carton for packing parts

19 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 20 Environmental Impact Data

Environmental impact data for SHI works*1, Group companies in *2 Japan as well as the main overseas Group companies Nagoya Works Electric power (1000 kWh) 15,047 Emissions volume Transfer Established in 1961 ISO14001 (obtained in January 1999) PRTR (kg/year) Energy used Energy Gasoline (kL) 18 Atmosphere Water volume *1 Including Group companies within the works *2 Group companies other than works Site Area: 293,000m2 Building Area: 90,000m2 Kerosene (kL) – Ethylbenzene 8,250 – 1,185 Main Products: Power Transmission and Controls, Gear Motors, Inverters, Construction Cranes Light oil (kL) – Xylene 56,479 – 6,550 Volume of waste disposed of Percentage of Heavy fuel oil A (kL) – Hexavalent chromium compounds 82 – – [Environmental impact data for each works] CO2 emissions Energy productivity Volume of waste generated waste to landfill LPG (t) – (including lead chromate) 3 (t-CO2)(million yen/t-CO2) (t/year) (%) City gas (1000 m ) 631 Styrene 372 – – 10,000 5 4,000 100 Water used (m3) 143,624 1,2,4-trimethylbenzene 357 – – Tanashi Works Electric power (1000 kWh) 5,962 Emissions volume Transfer Discharge into the atmosphere 1,3,5-trimethyl benzene 961 – 812 PRTR (kg/year) 4 80 Gasoline (kL) – 7,500 3,000 – Toluene 19,568 – –

Energy used Energy volume SOx (kg) Established in 1939 ISO14001 (obtained in August 1998) Atmosphere Water 2 2 3 60 Naphthalene 360 – – Site Area: 40,712m Building Area: 14,368m Kerosene (kL) 1 Ethylbenzene 14 – – NOx (kg) – 5,000 2,000 Lead 82 – – Main Products: Defense Equipment, Cryogenic Equipment Light oil (kL) 1 Ethylene glycol monomethyl 1 – – 2 40 Discharge into the water Heavy fuel oil A (kL) – ether (2-methoxyethanol) COD (kg) 620 Normal hexane 417 – – Volume of waste disposed of Percentage of 2,500 1,000 Environmental Initiatives LPG (t) – 1,2-epoxybutane 5 – – 1 20 Nitrogen (kg) 27 Benzene 62 – – CO2 emissions Energy productivity Volume of waste generated waste to landfill 3 Ferric chloride – – 192 Manganese and its compounds 19 – 1 City gas (1000 m ) 2 0 0 0 0 Phosphorus (kg) – (t-CO2)(million yen/t-CO2) (t/year) (%) 3 Xylene 18 – – 2012 2012 6,000 10 1,600 100 Water used (m ) 14,830 2004 2010 2011 (FY) 2001 2010 2011 (FY) Discharge into the atmosphere Quinoline 3 – – 8 80 4,500 1,200 SOx (kg) – Hexavalent chromium compounds – – 21 (including lead chromate) 6 60 NOx (kg) – Ethylene glycol monoethyl ether 3 – – 3,000 800 4 40 acetate Toluene 325 – – 1,500 400 Okayama Works Electric power (1000 kWh) 5,001 Emissions volume Transfer 2 20 Lead compounds – – 11 PRTR (kg/year)

Energy used Energy Gasoline (kL) 1 volume 1-bromopropane 5,827 – – Established in 1948 ISO14001 (obtained in March 2000) Atmosphere Water 0 0 0 0 Site Area: 425,000m2 Building Area: 94,000m2 Kerosene (kL) – Ethylbenzene 1,889 – 523 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) Manganese and its compounds – – 9 Main Products: Gearboxes, Stage Systems, Machine Tools Light oil (kL) 7 Xylene 4,898 – – Volume of waste disposed of Percentage of Heavy fuel oil A (kL) – 1,3,5-trimethyl benzene 447 – – CO2 emissions Energy productivity Volume of waste generated waste to landfill LPG (t) 77 Toluene 4,762 –– 3 (t-CO2)(million yen/t-CO2) (t/year) (%) City gas (1000 m ) – 7,000 10 2,500 100 Water used (m3) 17,201 6,000 Discharge into the atmosphere 8 2,000 80 Chiba Works 5,000 SOx (kg) – Electric power (1000 kWh) 18,201 Emissions volume Transfer PRTR (kg/year) 6 1,500 60 Established in 1965 ISO14001 (obtained in April 1999) 4,000 NOx (kg) 140 Energy used Gasoline (kL) 96 Atmosphere Water volume Site Area: 294,600m2 Building Area: 110,692m2 Discharge into the water Kerosene (kL) 12 Water-soluble zinc compounds 126 – – 3,000 4 1,000 40 Main Products: Plastic Injection Molding Machines, Metallic Molds, COD (kg) 96 Light oil (kL) 542 2-aminoethanol 39 – – 2,000 Hydraulic Excavators 2 500 20 Nitrogen (kg) 461 Volume of waste disposed of Percentage of Heavy fuel oil A (kL) – Ethylbenzene 11,067 – 18,023 1,000 Phosphorus (kg) 2 CO2 emissions Energy productivity Volume of waste generated waste to landfill LPG (t) 166 Xylene 48,355 – 83,866 0 0 0 0 3 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) (t-CO2)(million yen/t-CO2) (t/year) (%) City gas (1000 m ) 868 Hexavalent chromium 2 – – 16,000 16 5,000 100 Water used (m3) 47,741 compounds (including lead Discharge into the atmosphere chromate) 4,000 80 12,000 12 SOx (kg) – Styrene 498 – 286 3,000 60 NOx (kg) 251 1,2,4-trimethylbenzene 752 – – 8,000 8 1,3,5-trimethyl benzene 1,750 – 690 2,000 40 Ehime Works (Niihama Factory) Toluene 29,760 – 14,796 Electric power (1000 kWh) 21,319 Emissions volume Transfer 4 PRTR (kg/year) 4,500 Energy used Gasoline (kL) 15 volume 1,000 20 Naphthalene 2 – – Established in 1888 ISO14001 (obtained in November 1999) Atmosphere Water 2 2 Lead 8 – – Site Area: 418,000m Building Area: 204,000m Kerosene (kL) 21 Water-soluble zinc compounds 30 – – 0 0 0 0 Main Products: Ion Accelerators, Coating Equipment, Parking System, Forge Rolling Machines, Hexamethylene diisocyanate 20 – – Light oil (kL) 91 Acetonitrile 123 – – 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) Transporting Machines Volume of waste disposed of Percentage of Heavy fuel oil A (kL) 761 Bisphenol A 29 – –

CO2 emissions Energy productivity Volume of waste generated waste to landfill LPG (t) 443 Ethylbenzene 19,109 – 1,412 3 (t-CO2)(million yen/t-CO2) (t/year) (%) City gas (1000 m ) – 1-octanol 19 – – 20,000 6 8,000 100 Water used (m3) 655,053 Xylene 29,340 – 2,543 5 80 Discharge into the atmosphere Toluene 18,029 – 2,021 15,000 6,000 906 4 SOx (kg) Lead compounds 73 – 201 Yokosuka Works Electric power (1000 kWh) 30,794 Emissions volume Transfer 60 NOx (kg) 1,122 Arsenic and its inorganic 73 – – PRTR (kg/year) 3 4,000 Established in 1971 ISO14001 (obtained in February 1999) 10,000

Energy used Gasoline (kL) 30 volume Atmosphere Water 40 Discharge into the water compounds 2 2 Site Area: 523,000m Building Area: 170,635m Kerosene (kL) – Ethylbenzene 67,155 –– 2 COD (kg) 120 Hydrogen fluoride and its 114 – – Main Products: Ships, Laser Processing Systems, Semiconductor Manufacturing Equipment 5,000 2,000 water-soluble salts Light oil (kL) 193 Ferric chloride – 4 77 1 20 Nitrogen (kg) 773 (Molding Machines), Precision Forgings, Stage Systems, System Controller Boron and its compounds 44 – 75 Heavy fuel oil A (kL) – Xylene 101,834 – – Phosphorus (kg) 12 Volume of waste disposed of Percentage of 0 0 0 0 Molybdenum and its compounds 4 – 26 LPG (t) 13 1,2,4-trimethylbenzene 15 –– 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) CO2 emissions Energy productivity Volume of waste generated waste to landfill City gas (1000 m3) 860 (t-CO2)(million yen/t-CO2) (t/year) (%) 1,3,5-trimethyl benzene 23 – – 25,000 6 12,000 100 Water used (m3) 143,547 Toluene 24,327 – 141 Discharge into the atmosphere Phenol 790 – 2 20,000 5 80 9,000 SOx (kg) – Hydrogen fluoride and its – 24 24,119 4 15,000 60 NOx (kg) 820 water-soluble salts 3 6,000 Discharge into the water 1-bromopropane 874 – 591 Ehime Works (Saijo Factory) Electric power (1000 kWh) 5,507 Emissions volume 10,000 40 Boron and its compounds – 7 69 Transfer 2 COD (kg) 373 Established in 1973 ISO14001 (obtained in February 1999) PRTR (kg/year) 4,000 used Energy Gasoline (kL) 13 Atmosphere Water volume 5,000 20 Nitrogen (kg) 490 Manganese and its compounds 846 – 7,541 Site Area: 535,000m2 Building Area: 91,500m2 1 Kerosene (kL) – Ethylbenzene 2,287 – 1,978 Phosphorus (kg) 55 Tritolyl phosphate 2,208 – – Main Products: Steel Structures, Pressure Vessels, Stirring and Mixing Equipment, 0 0 0 0 Coke Oven Machines Light oil (kL) 55 Xylene 10,350 – 8,811 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) Volume of waste disposed of Percentage of Heavy fuel oil A (kL) – Styrene 53 – 40 CO2 emissions Energy productivity Volume of waste generated waste to landfill LPG (t) 394 1,2,4-trimethylbenzene 81 – 99 (%) (t-CO2)(million yen/t-CO2) (t/year) City gas (1000 m3) – 7,000 6 4,000 100 1,3,5-trimethyl benzene 200 – 179 Water used (m3) 56,268 Toluene 4,189 – 3,629 6,000 5 80 Discharge into the atmosphere Butyl methacrylate 18 – 12 5,000 3,000 4 SOx (kg) 30 4,000 60 3 2,000 NOx (kg) 97 3,000 40 Discharge into the water 2 2,000 1,000 COD (kg) 387 20 1,000 1 Nitrogen (kg) 427 0 0 0 0 Phosphorus (kg) 38 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY)

21 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 22 Environmental Impact Data

[Environmental impact data for Group companies in Japan (away from the works)]

Shin Nippon Machinery Co., Ltd. SEISA Gear, Ltd. Electric power (1000 kWh) 3,466 Emissions volume Transfer Electric power (1000 kWh) 5,955 Emissions volume Transfer Main Products: Turbines, Pumps PRTR (kg/year) PRTR (kg/year) Main products: Speed reducers used Energy Gasoline (kL) 5 volume Energy used Energy Gasoline (kL) – Atmosphere Water volume Atmosphere Water Volume of waste disposed of Percentage of Kerosene (kL) 265 Antimony and its compounds 11 – 1 Volume of waste disposed of Percentage of Kerosene (kL) 8 Ethylbenzene 341 – 113 CO2 emissions Energy productivity Volume of waste generated waste to landfill CO2 emissions Energy productivity Volume of waste generated waste to landfill Light oil (kL) 7 Ethylbenzene 1,798 – 199 Light oil (kL) 1 Ethylene glycol monoethyl ether (t-CO2) (million yen/t-CO2) (t/year) (%) (t-CO2) (million yen/t-CO2) (t/year) (%) 107 – 34 Heavy fuel oil A (kL) – Heavy fuel oil A (kL) – (2-ethoxyethanol) 3,500 12 100 Xylene 3,960 – 421 4,000 5 100 1,000 1,200 Xylene 725 – 241 LPG (t) 7 Chromium and trivalent 243 – 27 LPG (t) 15 3,000 10 3 800 80 City gas (1000 m3) – chromium compounds 4 80 City gas (1000 m ) 134 Styrene 9 – 1 2,500 3,000 900 8 Water used (m3) 24,744 Cobalt and its compounds 82 – 9 Water used (m3) 49,730 1,3,5-trimethyl benzene 34 – 11 600 60 60 2,000 Styrene 5 – 1 3 Discharge into the atmosphere Toluene 9,770 – 2,444 6 Discharge into the atmosphere 2,000 600 1,500 400 40 SOx (kg) 13 1,2,4-trimethylbenzene 105 – 10 2 40 SOx (kg) – Lead 47 – 16 4 Hexamethylene diisocyanate 5 – 1 1,000 NOx (kg) 1,000 1,3,5-trimethyl benzene 300 – 33 1,000 300 NOx (kg) 138 200 20 1 20 500 2 Discharge into the water Toluene 1,153 – 81 Methyl methacrylate 8 – 2 0 0 0 0 COD (kg) 60 Naphthalene 89 – 10 0 0 0 0 Environmental Initiatives 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) Vanadium compounds 16 – 2 2008 2010 2011 2012 (FY) 2008 2010 2011 2012 (FY) Manganese and its compounds 71 – 8

Nihon Spindle Mfg. Co., Ltd. Electric power (1000 kWh) 1,833 Emissions volume Transfer Sumitomo Heavy Industries Modern, Ltd. Electric power (1000 kWh) 911 Emissions volume Transfer PRTR (kg/year) PRTR (kg/year)

Main Products: Industrial Instruments, Environmental Equipment, Building Materials used Energy Gasoline (kL) 4 Atmosphere Water volume Main products: Plastic extrusion molding machines used Energy Gasoline (kL) 22 Atmosphere Water volume Volume of waste disposed of Percentage of Kerosene (kL) – Ethylbenzene 785 – 385 Volume of waste disposed of Percentage of Kerosene (kL) – Ethylbenzene 55 – – Energy productivity CO2 emissions Volume of waste generated waste to landfill Light oil (kL) – Xylene 3,315 – 1,648 CO2 emissions Energy productivity Volume of waste generated waste to landfill Light oil (kL) 1 Xylene 129 –– (million yen/t-CO2) (%) (million yen/t-CO2 (%) (t-CO2) (t/year) Heavy fuel oil A (kL) – Hexavalent chromium compounds 1 – 1 (t-CO2) ) (t/year) Heavy fuel oil A (kL) – 1,2,4-trimethylbenzene 2 – – 1,400 16 600 100 600 15 300 100 LPG (t) 6 (including lead chromate) LPG (t) 1 1,3,5-trimethyl benzene 2 – – 1,200 3 3 80 City gas (1000 m ) 25 Parachlorophenol 3 – 2 12 80 City gas (1000 m ) – Toluene 4,540 – – 12 1,000 3 3 400 Water used (m ) 12,280 Styrene 2 – 1 400 200 Water used (m ) 2,396 N-butyl phthalate 150 –– 800 60 Discharge into the atmosphere 1,2,4-trimethylbenzene 23 – 11 9 60 Discharge into the atmosphere 8 1,3,5-trimethyl benzene 8 – 5 600 40 SOx (kg) – 6 40 SOx (kg) – 200 – Toluene 4,554 – 2,660 200 100 – 400 4 NOx (kg) NOx (kg) 20 Lead compounds 80 – 54 3 20 200 N-butyl phthalate 3 – 0.1 0 0 0 0 0 0 0 0 Benzene 15 – – 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) 2008 2010 2011 2012 (FY) 2008 2010 2011 2012 (FY) Formaldehyde 1 – 0.8

SEN Corporation Electric power (1000 kWh) 11,200 Emissions volume Transfer Izumi Food Machinery Co., Ltd. Electric power (1000 kWh) 461 Emissions volume Transfer PRTR (kg/year) PRTR (kg/year)

Main Products: Ion Implantation Systems Energy used Gasoline (kL) – Atmosphere Water volume Main products: Food processing machinery Energy used Gasoline (kL) 1 Atmosphere Water volume Volume of waste disposed of Percentage of Kerosene (kL) – Ethylene glycol monomethyl 5 – – Volume of waste disposed of Percentage of Kerosene (kL) – Ethylbenzene 29 – – CO2 emissions Energy productivity Volume of waste generated waste to landfill Energy productivity Light oil (kL) 1 ether (2-methoxyethanol) CO2 emissions Volume of waste generated waste to landfill Light oil (kL) – Xylene 38 – – (million yen/t-CO2) (%) (million yen/t-CO2) (%) (t-CO2) (t/year) Heavy fuel oil A (kL) – Toluene 9 – – (t-CO2) (t/year) Heavy fuel oil A (kL) 2 Hexavalent chromium 2 – – 8,000 5 200 100 350 30 300 100 LPG (t) – Hydrogen fluoride and its – – 7 LPG (t) – compounds (including lead water-soluble salts 4 80 City gas (1000 m3) – 300 80 City gas (1000 m3) – chromate) 6,000 150 Boron and its compounds 3 – – Toluene 344 – – Water used (m3) 14,386 250 20 200 Water used (m3) 3,424 60 60 3 Discharge into the atmosphere Discharge into the atmosphere N-butyl phthalate 9 – – 4,000 100 200 Hydrogen fluoride and its 21 – – SOx (kg) – 40 SOx (kg) – 2 40 water-soluble salts – 150 10 100 2,000 50 NOx (kg) NOx (kg) – 20 20 1 100

0 0 0 0 0 0 0 0 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY)

Sumitomo NACCO Materials Handling Co., Ltd. Electric power (1000 kWh) 2,952 Emissions volume Transfer SFK Co., Ltd Electric power (1000 kWh) 846 PRTR (kg/year)

Main Products: Forklifts used Energy Gasoline (kL) 17 Atmosphere Water volume Main products: Bolts, nuts, precision screws used Energy Gasoline (kL) 3 Volume of waste disposed of Percentage of Kerosene (kL) – Ethylbenzene 15,461 – 1,109 Volume of waste disposed of Percentage of Kerosene (kL) 6 CO2 emissions Energy productivity Volume of waste generated waste to landfill Light oil (kL) – Xylene 31,072 – 2,235 CO2 emissions Energy productivity Volume of waste generated waste to landfill Light oil (kL) – (%) (million yen/t-CO2) (t-CO2) (million yen/t-CO2) (t/year) Heavy fuel oil A (kL) – Ethylene glycol monoethyl 155 – 11 (t-CO2) (t/year) (%) Heavy fuel oil A (kL) – 4,000 15 1200 100 LPG (t) 95 ether acetate 600 8 180 100 LPG (t) – 3 Styrene 121 – 8 3 12 80 City gas (1000 m ) – 80 City gas (1000 m )– 6 3,000 900 3 1,2,4-trimethylbenzene 800 – 63 3 Water used (m ) 19,250 400 120 Water used (m ) 752 9 60 Discharge into the atmosphere 1,3,5-trimethyl benzene 1,398 – 97 60 Discharge into the atmosphere 2,000 600 4 SOx (kg) – Toluene 7,945 – 573 SOx (kg) – 6 40 40 NOx (kg) – Naphthalene 415 – 27 200 60 NOx (kg) – 1,000 300 2 3 20 N-butyl phthalate 89 – 6 20 Discharge into the water Normal hexane 429 – 32 COD (kg) 13 0 0 0 0 0 0 0 0 Benzene 72 – 5 Nitrogen (kg) 10 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) 2004 2010 2011 2012 (FY) 2001 2010 2011 2012 (FY) Boron and its compounds 1,586 – 114 Phosphorus (kg) 1

23 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 24 Environmental Impact Data

[Environmental impact data for main overseas Group companies]

Sumitomo Heavy Industries (Tangshan), Ltd.Country: China Main products: Power transmission equipment SHI Manufacturing & Services(Philippines) Inc.Country: The Philippines Main products: Precision parts and components

Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Energy productivity Energy productivity Volume of waste generated waste to landfill CO2 emissions Volume of waste generated waste to landfill Electric power (1000 kWh) 8,388 VOC emissions (t/year) 9 CO2 emissions Electric power (1000 kWh) 2,121 VOC emissions (t/year) Under 1 t (t-CO2) (million yuan/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) 160 (t-CO2) (million yen/t-CO2) (t/year) (%) Gasoline (kL) 1 SOx emissions (kg/year) – 100 1,200 2.25 100 12,000 0.06 600 Kerosene (kL) – NOx emissions (kg/year) 1,060 400 Kerosene (kL) – NOx emissions (kg/year) – 2.0 0.05 80 Light oil (kL) – 1,000 80 Light oil (kL) – 9,000 1.75 300 0.04 400 LNG (t) – 800 1.5 LNG (t) – 60 60 LPG (t) – 1.25 LPG (t) – 6,000 0.03 600 200 3 1.0 3 40 Natural gas (1000 m ) 1,929 40 Natural gas (1000 m )– 0.02 200 Water used (m3) 48,739 400 0.75 Water used (m3) 50,648 3,000 100 0.5 20 0.01 20 200 0.25 0 0 0 0 0 0 0 0 Environmental Initiatives 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY) 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY)

Sumitomo (SHI) Cyclo Drive China, Ltd.Country: China Main products: Power transmission equipment Sumitomo Machinery Corporation of AmericaCountry: United States Main products: Power transmission equipmen

Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere CO2 emissions Energy productivity Volume of waste generated waste to landfill CO2 emissions Energy productivity Volume of waste generated waste to landfill Electric power (1000 kWh) 4,405 VOC emissions (t/year) 42 Electric power (1000 kWh) 5,059 VOC emissions (t/year) 4

(t-CO2) (million yuan/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) – (t-CO2) (million US$/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) – 5,000 0.12 1,500 100 Kerosene (kL) – NOx emissions (kg/year) – 4,000 0.05 750 100 Kerosene (kL) – NOx emissions (kg/year) –

4,000 0.1 80 Light oil (kL) 279 0.04 80 Light oil (kL) – 3,000 0.08 1,000 LNG (t) – 500 LNG (t) – 3,000 60 LPG (t) – 0.03 60 LPG (t) 9 0.06 2,000 Natural gas (1000 m3)– Natural gas (1000 m3) 1 2,000 40 0.02 40 0.04 500 Water used (m3) 35,706 250 Water used (m3) 1,729 1,000 0.01 20 1,000 0.02 20

0 0 0 0 0 0 0 0 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY) 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY)

Ningbo Sumiju Machinery, Ltd.Country: China Main products: Plastic molding machines, components for power transmission equipment Link-Belt Construction Equipment CompanyCountry: United States Main products: Construction cranes

Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere CO2 emissions Energy productivity Volume of waste generated waste to landfill CO2 emissions Energy productivity Volume of waste generated waste to landfill Electric power (1000 kWh) 5,353 VOC emissions (t/year) Under 1 t Electric power (1000 kWh) 27,041 VOC emissions (t/year) 61

(t-CO2) (million US$/t-CO2) (t/year) (%) (t-CO2) (million yuan/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) – Gasoline (kL) – SOx emissions (kg/year) 96 25,000 0.018 25,000 100 5,000 0.012 1,000 100 Kerosene (kL) – NOx emissions (kg/year) – Kerosene (kL) – NOx emissions (kg/year) 4,196 0.015 4,000 0.01 800 80 Light oil (kL) 21 20,000 20,000 80 Light oil (kL) – 0.008 LNG (t) – 0.012 LNG (t) – 3,000 600 60 LPG (t) – 15,000 15,000 60 LPG (t) – 0.006 0.009 Natural gas (1000 m3)– Natural gas (1000 m3) 2,307 2,000 400 40 10,000 10,000 40 0.004 Water used (m3) 63,225 0.006 Water used (m3) 36,028 5,000 5,000 20 1,000 0.002 200 20 0.003 0 0 0 0 0 0 0 0 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY) 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY)

Sumitomo (S.H.I.) Construction Machinery (Tangshan) Co., Ltd.Country: China Main products: Hydraulic excavators Sumitomo (SHI) Demag Plastics Machinery GmbHCountry: Germany Main products: Plastic molding machines

Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Energy productivity Volume of waste generated waste to landfill CO2 emissions Energy productivity Volume of waste generated waste to landfill Electric power (1000 kWh) 7,905 VOC emissions (t/year) Under 1 t CO2 emissions Electric power (1000 kWh) 8,782 VOC emissions (t/year) 6 (%) (t-CO2) (million yuan/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) 120 (t-CO2) (million Euro/t-CO2) (t/year) Gasoline (kL) – SOx emissions (kg/year) – 12,000 0.16 1,500 100 Kerosene (kL) – NOx emissions (kg/year) 1,620 8,000 0.04 2,000 100 Kerosene (kL) – NOx emissions (kg/year) –

80 Light oil (kL) 17 80 Light oil (kL) 3 0.03 9,000 0.12 LNG (t) – 6,000 1,500 LNG (t) – 1,000 60 LPG (t) 15 60 LPG (t) 201 0.08 4,000 0.02 1,000 6,000 Natural gas (1000 m3) 2,713 Natural gas (1000 m3)– 40 40 500 Water used (m3) 14,600 Water used (m3) 11,000 3,000 0.04 2,000 0.01 500 20 20

0 0 0 0 0 0 0 0 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY) 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY)

Sumitomo Heavy Industries (Vietnam) Co.,Ltd.Country: VietnamMain products: Power transmission equipment and motors Hansen Industrial Transmissions NVCountry: Belgium Main products: Power transmission equipment

Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere Volume of waste disposed of Percentage of Energy used Discharge into the atmosphere CO2 emissions Energy productivity Volume of waste generated waste to landfill Electric power (1000 kWh) 11,161 VOC emissions (t/year) Under 1 t CO2 emissions Energy productivity Volume of waste generated waste to landfill Electric power (1000 kWh) 9,793 VOC emissions (t/year) 5

(t-CO2) (million US$/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) – (t-CO2) (million Euro/t-CO2) (t/year) (%) Gasoline (kL) – SOx emissions (kg/year) – 6,000 0.012 3,000 100 Kerosene (kL) – NOx emissions (kg/year) – 4,500 0.014 2,500 100 Kerosene (kL) – NOx emissions (kg/year) – 0.012 Light oil (kL) – 0.01 80 Light oil (kL) – 2,000 80 4,500 LNG (t) – 0.01 LNG (t) – 0.008 2,000 3,000 60 LPG (t) 262 0.008 1,500 60 LPG (t) – 3,000 0.006 Natural gas (1000 m3)– Natural gas (1000 m3) 908 40 0.006 1,000 40 0.004 1,000 3 1,500 3 Water used (m ) 41,923 0.004 Water used (m ) 7,023 1,500 20 500 20 0.002 0.002 0 0 0 0 0 0 0 0 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY) 20092010 2011 2012 (FY) 2009 2010 2011 2012 (FY)

25 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 26 Social Contribution Activities

With the employees taking the initiative, we are planning and implementing activities that serve as social contributions in each region.

Biodiversity Measures

The Sumitomo Heavy Industries Group endorses the Inspiration and opened it to the public as a place where some concern that this was causing groundwater to biodiversity declaration issued by Nippon Keidanren local communities and corporations can think together diminish, so that ground subsidence could occur as a

(the Japan Business Federation), and we have joined about the future of the earth. Artiicial plantings have result. The occurrence of unanticipated, localized heavy Society with Relations the partners promoting it. We determined our policy been avoided so that visitors can get a feeling of what rainstorms and other such phenomena that are thought in the third medium-term environmental plan, and we the original Musashino landscape was like. Barrier-free to be caused by the worldwide environmental problem are committed to afforestation and planting greenery to walking paths have been set up with wooden benches of global warming has raised concern about looding contribute to the protection of biodiversity. to make a place where local residents can come to damage in neighboring areas, including residential Our Tanashi Works is preserving the Musashino relax. In the autumn, nursery school children come to neighborhoods. The rainwater iniltration pipes that Forest, which occupies approximately 30% of the gather acorns. return rainwater into the earth constitute a measure for 43,000-m2 campus. This forest contains over 4,500 The acorns gathered in the forest at the Tanashi Works protection of the natural environment by remedying the trees of 40 or more species, and 170 of the trees have are distributed to other works and Group companies for depletion of groundwater, reducing the risk of ground been designated protected trees by Nishi-Tokyo City. use in our tree-planting campaigns. Our aim is to make subsidence, and so on. Past wildlife habitat surveys conirmed the presence effective use of the space within the works, expand the At the Niihama Factory, we have demolished buildings of considerable wildlife in the forest, which is a stronghold green area, and make it an ecologically friendly facility. as part of redevelopment of the campus and converted for the local ecosystem as well as a precious natural This Forest of Inspiration also has rainwater iniltration those areas to greenery. Plans call for continuing Green curtain at the Niihama Factory asset for scientiic research. pipes installed. Most of the rainwater to date has been expansion of green areas. All our factories are also With its abundant greenery, the Tanashi Works channeled through underground rainwater drainage engaged in green curtain activities. has named a portion of these woods the Forest of pipes into nearby rivers and streams. There has been

Overseas Biodiversity Measures

Link-Belt Construction Equipment Company located Our other factories worldwide are likewise contributing in the state of Kentucky in the United States, has a to biodiversity by engaging in afforestation and planting campus of 425,000 m2, where for many years they have activities. been conserving natural trees and planting many other trees. They have also constructed ponds where ish can live. Employees can ish in these ponds, but they practice a strict catch-and-release policy. As a result, the expansive LBCE campus has preserved a rich natural environment that is inhabited by many wild creatures. Among them are skunks, bats, woodchucks, turtles, opossum, muskrats, various Main building at the small birds, geese, and bees. Tanashi Works There are wild geese that breed on the campus, Kindergarten children enthusiastically gathering acorns in the Forest of Inspiration and the goslings are hatched at the factory. Some of the goslings become prey for creatures such as foxes, Rainwater Infiltration Pipes Laid Underground hawks, coyotes, snakes, and raccoons, but this is the (Rainfall) working of nature, and the employees do not try to Newly installed drain pipe interfere by saving the goslings. Existing drain Existing pipe Woodland scene Newly installed infiltration well Sometimes one will see a procession of goslings ditch and Newly installed View from the commuter gate drain box (Rainwater discharged directly into underground water veins) infiltration tank led by a parent goose, and the employees refer to these (Rainwater enters here) by adding the company name and calling them "Link- Belt Geese."

(Rainwater is filtrated) Flow of rainwater

Underground water vein

Underground water vein

Sidewalk border changed to planting area (Nihon Spindle Mfg. Co., Ltd.) Cherry trees at Sumitomo Heavy Industries (Tangshan), Ltd. A procession of geese

27 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 Sumitomo Heavy Industries Group Environmental Sustainability Report 2013 28 Social Contribution Activities

Holding classes on the environment Cleanup activities Traffic safety measures Cooperation with Safety Training and Emergency Drills The Sumitomo Heavy Industries Environment Co., In the Sumitomo Heavy Industries Group, we carry on Our Group is a member of local Trafic Safety Associations for Police Department Personnel Ltd. held classes on the environment in Fujisawa City, regular cleanup activities in the areas around our works. and as such we participate in trafic safety campaigns. The Yokosuka Works provided cooperation for personnel Kanagawa Prefecture. We also participate in cleanup activities organized by We also hold lectures in all of our districts to heighten of the Kanagawa Prefectural Police, the Taura Police The difference between clean water and polluted local government bodies and volunteer groups. awareness of trafic safety among Group employees, and Department, and the Uraga Police Department who water was explained to the children in the class, who In addition to cleanup activities in the neighborhood we seek the cooperation of transportation contractors are members of Emergency Management and learned about the importance of protecting river and of our works, during iscal year 2012 the Nagoya Works that carry loads into and out of our factories. Countermeasures Departments through safety training ocean environments. and Sumitomo NACCO Materials Handling Co., Ltd. The Nagoya Works and Sumitomo NACCO Materials and emergency drills. We also offered the use of our

We had the children look through actual microscopes also participated in the Adopt Program* organized by Handling Co., Ltd. regularly take on trafic monitoring Safety Training Center. Society with Relations and conduct an experiment in how powdered activated Obu City in Aichi Prefecture, while the Niihama Factory duties, and they are actively cooperating on trafic safety The drills covered a wide range, including rescue charcoal can make polluted water clean. took part in the Adopt Program of Niihama City. All these with local communities. drills using vehicles for high-lift work, experiential training We intend to continue these activities in the activities involve continuing engagement in cleanup of The Yokosuka Works participated in the year- about electric shock, practice in using chain hoists in future, and to convey the importance of environmental neighboring areas. end trafic accident prevention campaign, distributing scenarios for rescue of people trapped under collapsed protection to the children. In addition, the Saijo Factory and SEN Corporation lealets calling for trafic safety. The campaign was structures, practice in using jacks in scenarios for rescue took part in the "Refresh Setouchi" Inland Sea cleanup focused on the following three points: of people trapped under collapsed structures, instruction activities at Takasu Beach in Saijo City, Ehime Prefecture. on dealing with people whose hands get caught up when (1) Eradication of drunk driving This Takasu Beach is the only natural sand beach still using motors, experiential training in hanging by a safety (2) Prevention of trafic accidents involving remaining in Saijo City, and the community hopes to harness, instruction in the use of gas cutting torches, and pedestrians (especially elderly people) and protect the environment there. instruction on using forklifts for rescue. bicycles This activity started in 1993, and this year is its 21st Employees who led the drills were impressed. (3) Making sure that everyone fastens their year. It is a major event for volunteer activity in the city. Some remarked that seeing the trainees work so hard seatbelts and that child seats are properly The Sumitomo Heavy Industries Group will continue at learning was a learning experience for them, as well, used with this commitment to beautiication of the local while others observed that the trainees were disciplined environment. We also conduct trafic safety training at the head and energetic, and left a very good impression. ofice for members of the sales and service divisions * Adopt Program and other employees who drive company vehicles. This is a volunteer campaign in which people designate a public facility, such as a park or a footpath, and register it with the city. They then pick up trash, water the plants, and weed the designated facility so that people will be able to enjoy using it.

Scenes of our class in session

Drill with vehicle for high-lift work Participating actively in local community events Sumitomo Heavy Industries Group takes an active part in events in local communities, as well. The Niihama Factory took part in the Saijo City Ofuki Area Friendship Sports Day as part of the Trafic safety training Experiencing electric shock Ehime Prefecture Support Group Matching Project for Healthy Village Development, with the aim of regional revitalization. Many people here in the Ofuki area are elderly, so the sports days suffered from a shortage of participants. Upon the community’s request, we sent three of our people to take part. The weather was ine Cleanup (Niihama Factory) on the day of the event, and it was a very enjoyable and Handing out year-end trafic Training with jacks meaningful day of exchange with members of the local safety lealets community as well as with many other volunteers. Cooperation with Blood Donation Drives Group collaboration with blood donation drives has continued over many years, and for our employees, this is the social contribution activity they feel most familiar with. In iscal year 2012, a total of 1,107 Group members donated blood. Sumitomo Heavy Industries Marine & Engineering Co.,

Ltd. was recognized for its many years of cooperation with A blood drive under way blood drives by the Japan Red Cross, which presented it with a Silver Border Letter of Commendation. The Sumitomo Heavy Industries Group is committed to continuing these efforts with lifesaving blood donation Volunteers who participated in the sports day Group employees who participated in cleanup of Takasu Beach in Saijo City drives. An award ceremony

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