Company history

The company starts in 1888 as the machine section of the Sumitomo Besshi copper mine at Niihama, in Ehime — a shop built to make, in-house, the equipment the mine needed. The contrast with Mitsubishi matters: Mitsubishi turned its Nagasaki yard outward and sold ships and heavy machinery on the open market, while for the Sumitomo zaibatsu mining was the core business and machinery was something you made for yourself. Renamed the Niihama Works of Sumitomo Besshi Mining in 1928, spun out in November 1934 as Sumitomo Machinery Manufacturing with a capital of 5 million yen, and renamed Sumitomo Machinery Industries in 1940, it kept filling orders from within the group and never built a sales arm to reach outside it.

The one exception pointed the way it would eventually go. A 1935 tie-up with the German firm Cyclo brought it into Cyclo speed reducers — gearless reduction drives — the only business it entered ahead of the field before the war, and the one that would still be carrying it decades later. Everything else was generalist: presses, conveyors, wire machinery, chemical plant, mining and smelting equipment, a little of everything and a commanding position in nothing. That breadth secured volume so long as the group placed the orders; it made it very hard to build competitive depth in any single line.

Defeat and the dissolution of the zaibatsu took away the reason the group had been placing orders, and the company — restored to the name Sumitomo Machinery Industries in May 1952 — was pushed into an open market it had never learned to sell in. The cost structure did not move with it: one site at Niihama, a catalogue that covered everything. Losses followed in the years to March 1954 and March 1955, and the second was severe — a net loss of $1.9M (¥690m) against a capital of $750,000 (¥270m), with the equity ratio down to 4% by September 1954. For a former zaibatsu company this was a conspicuous brush with insolvency.

It was avoided only by drawing down the asset-revaluation reserve to cover the deficit; President Samejima Tatsuo resigned to take responsibility. What came out of the crisis was the beginning of a different company. A works at Nagoya opened in 1961 and one at Chiba in 1965, breaking the single-site structure and assigning products to plants that could be run efficiently one line at a time, and a 1966 tie-up with the Swiss firm Netstal took it into injection moulding machines — the origin of the plastics-machinery business. The generalist was learning, slowly and under duress, to specialize.

In June 1969 the company merged with the shipbuilder Uraga Heavy Industries and became Sumitomo Heavy Industries, with roughly 10,000 employees. Each side wanted what the other had: Sumitomo wanted the scale that shipbuilding would add, while Uraga — carrying about $8.3M (¥3bn) of accumulated losses and unable to fund the dock the 300,000-dwt tanker age demanded — wanted the financial reach of the Sumitomo group. The Oppama yard (today the Yokosuka works) followed in 1972 with a 500,000-dwt dock, and Saijo in 1973. In 1983 a joint venture with America’s Eaton Corporation, Sumitomo Eaton Nova (SEN), began building the NV-10 high-current ion implanter — at the time a distinctly minor line beside ships and excavators.

The 1985 Plaza Accord ended that arrangement. The yen’s rise hit Japanese shipbuilding directly, and in February 1987 the company opened voluntary retirement to 1,600 employees aged 35 and over in shipbuilding and steelmaking machinery; with transfers, 1,700 people left in three months. Chairman Goda Shigeru later said he never wanted to go through it again. Weight shifted steadily toward the non-ship businesses — construction machinery, injection moulders, gear motors, semiconductor equipment — but the cycle came round again: losses in 2001, then in 2002 another 1,000 job cuts and a 15% pay cut across the board. Shimomura Shinji, a junior employee at the time and president from 2019, would still be describing those losses years later as the thing he remembered most.

From the late 2000s the company set out to buy its way out of the ship-and-excavator cycle. Germany’s Demag Ergotech (now SHI Demag) in March 2008 gave it a European base in plastics machinery; Belgium’s Hansen Industrial Transmissions (industrial gearboxes) followed in March 2011, the Dutch boiler maker FW Energie (circulating fluidised bed, now SHI FW) in June 2017, Italy’s Lafert (industrial motors) in June 2018 and Britain’s Invertek Drives (inverters) in November 2019. Gears, plastics machinery, energy and electric drives each acquired a European footing, and the share of earnings riding on domestic shipbuilding and construction equipment came down.

The quieter move mattered more. In March 2009 the company ended the 26-year Eaton joint venture and bought out the ion-implanter business outright for $121.9M (¥11bn), making semiconductor equipment wholly its own for the first time. Nothing about its position changed immediately — it was still filed as a useful extra alongside the heavy-industry portfolio, and it would be the 2020s before it became the lead business. But the end-to-end solutions that were hard to pursue inside a joint venture became possible from this point, and the later pivot to power-semiconductor demand had nowhere else it could have started.

Shimomura Shinji became president in April 2019, succeeding Betsukawa Shunsuke and continuing a run of roughly six- or seven-year terms. He arrived saying that building a compliance-first culture was the urgent task — a response to the quality and misconduct problems that recur through the company’s record — and set about the portfolio. In the year to December 2022 he booked about $200.2M (¥26bn) in special losses, largely impairments in shipbuilding and construction machinery, and took full ownership of Sumitomo Heavy Industries Construction Crane. Writing the assets down first was what made the withdrawals of the following year executable.

In February 2024, alongside the Medium-Term Management Plan 26, the company announced its exit from newbuilding — ending 55 years of shipbuilding begun with the Uraga merger, and giving up the 500,000-dwt dock built in 1972. Watanabe Toshiro, then CFO, put it plainly: with ship prices depressed since 2012–13 the company had cut the number of hulls it took and built, and the business had been effectively loss-making, beyond what repair work could cover. The remaining seven hulls were to be delivered by around January 2026, and the freed Yokosuka docks and buildings were turned over to hydraulic excavators of 35 tonnes and above and demolition machines, with Chiba concentrating on smaller volume models. The withdrawal was designed as a transfer of production capacity, not merely a closure.

The European businesses then presented the bill. Lafert, DEMAG and SHI FW were all loss-making in the year to December 2024, and the February 2025 briefing set out a restructuring road map of headcount reductions and capacity cuts — Europe’s demand collapse, rigid costs and post-pandemic energy prices arriving together, a decade and more after the deals. Net profit fell to $50.8M (¥8bn) from $215.8M (¥33bn), and the shareholder-return plan in Plan 26 was cut from $528.1M (¥80bn) to $462M (¥70bn). Watanabe, promoted from CFO to president in January 2026, inherits both halves: the exit from ships is settled, while returning Europe to profit and turning ion implanters into the company’s lead business are not.