Sumitomo Heavy Industries - Company History
- Founding
- In 1888 the Sumitomo Besshi Mining Office machine shop was set up at the Besshi copper mine in Niihama, Ehime Prefecture. It was a machining department that made in-house the machinery needed to keep the mine running; it became the Niihama Works in 1928, was incorporated in November 1934 as Sumitomo Kikai Seisakusho with capital of ¥5 million, and was renamed Sumitomo Machinery in 1940. In 1935 it tied up with Cyclo of Germany and entered reduction gears, the one business it had entered ahead of the field before the war and the only one it carried through to the post-war years. Because it had started life as a captive works, however, it never built the muscle to sell outside the group, and when the dissolution of the zaibatsu took away the customers that had placed its orders it posted a net loss of $1.9M (¥690m) in the year to March 1955 — more than its capital of $750,000 (¥270m) — and stood on the edge of negative net worth.
- The Decision
- When scale was needed the company took on the heavy plant that came with it, and when the economics broke down it let go of the plant and the people alike. Sumitomo Machinery held a little over 30 per cent of the domestic market in speed reducers and variable-speed drives, yet it could not match Mitsubishi Heavy Industries or Ishikawajima-Harima Heavy Industries for size, and in June 1969 it absorbed the large shipbuilder Uraga Heavy Industries and crossed over to the side of the general heavy engineering makers. The shipbuilding slump that followed the Plaza Accord broke the economics, and in 1987 the company put through a voluntary redundancy programme that cut 1,700 jobs in three months. In 2008, looking for fields that moved less with the cycle, it acquired five European machinery makers one after another. Then in February 2024 it withdrew from newbuilding after fifty-five years and turned the dock over to the production of large hydraulic excavators. Through half a century of taking on and letting go, the business narrowed down to machines that turn inside a customer's equipment — speed reducers, cryogenic refrigerators.
- Today
- The largest business by revenue and the largest by profit are not the same. Of revenue of $7.1B (¥1.07tn) in the year to December 2025, the biggest was Logistics & Construction, the hydraulic excavator business, at $2.6B (¥389bn). In profit, however, Mechatronics — speed reducers and cryogenic refrigerators — earned $127M (¥19bn), above that business's $93.6M (¥14bn). Industrial Machinery, which makes ion implanters, sold $1.5B (¥223bn) and kept only $28.1M (¥4bn) of it. In February 2026 President Watanabe Toshiro (渡部敏朗) announced the sale of Shin Nippon Machinery and a voluntary redundancy programme covering 500 people, and said the company would narrow itself to three core businesses and a little besides. It has entered the stage of ranking its businesses by profit rather than by revenue.
- Competition
- The opponents differ business by business. President Nishimura Tsunesaburo (西村恒三郎) later described the pre-merger company as a country department store that could not match Mitsubishi Heavy Industries or Ishikawajima-Harima Heavy Industries for scale, and said it had spread itself over too wide a range to narrow down into a speciality shop the way Komatsu had in construction machinery or Ebara in pumps. Having crossed over to the side of the general heavy engineering makers, it fought in shipbuilding for fifty-five years and then came off the field, and its hydraulic excavators still have their profits set by the swings of North American demand. Where it held its advantage was in the fields it had narrowed down to. Speed reducers, in which it had led the domestic market since before the merger, remain the core of Mechatronics, and in ion implanters it dissolved its joint venture with Eaton of the United States in 2009 and turned the business into one it runs alone.
Timeline
1888–1968From the Besshi copper mine to an industrial machinery maker
- 1888The Sumitomo Besshi Mining Office machine shop is established at the Besshi copper mine
- 1928Renamed the Niihama Works of Sumitomo Besshi Mining Co.
- 1934Sumitomo Kikai Seisakusho incorporated with capital of ¥5m
- 1935Tie-up with Cyclo of Germany; entry into cyclo reduction gears
- 1940Renamed Sumitomo Machinery Co.
- 1945Renamed Shikoku Kikai Kogyo to shed the zaibatsu name
- 1949Shares listed on the Tokyo Stock Exchange in May
- 1952Reverts to the name Sumitomo Machinery
- 1954Management crisis; President Samejima resigns to take responsibility
- 1961Nagoya works opened, the first specialist plant
- 1965Chiba works opened
- 1966Entry into injection moulding machines with Netstal of Switzerland
1969–2018The Uraga Heavy Industries merger and the turn to heavy engineering
- 1969Sumitomo Machinery merges with Uraga Heavy Industries; Sumitomo Heavy Industries is formed in June
- 1972Oppama shipyard opened with a 500,000-tonne dock
- 1973Saijo plant of the Ehime works opened
- 1983Sumitomo Eaton Nova set up as a joint venture with Eaton
- 1986Sumitomo Construction Machinery established
- 19871,700 jobs cut in three months in shipbuilding and steelmaking machinery
- 2001Large losses as shipbuilding and construction machinery weaken together
- 20021,000 jobs cut and annual pay reduced by 15 per cent
- 2003Shipbuilding spun off into Sumitomo Heavy Industries Marine & Engineering
- 2008Demag Ergotech of Germany acquired
- 2009SEN-SHI Accelis taken into full ownership
- 2011Hansen Industrial Transmissions of Belgium acquired
- 2015Mitsubishi Heavy Industries' industrial crane business acquired in October
- 2018Lafert of Italy acquired in June
2019–2025Leaving newbuilding, and rebuilding around semiconductor equipment
- 2019Shimomura Shinji becomes president in April
- 2019Invertek Drives of the United Kingdom acquired in November
- 2022Extraordinary losses of about ¥26.3bn booked in the year to December
- 2022Sumitomo Heavy Industries Construction Crane taken into full ownership
- 2024Withdrawal from newbuilding announced in February with the plan to 2026
- 2024Lafert, DEMAG and SHI FW all fall into loss
- 2024Net profit falls to ¥7.7bn from ¥32.7bn the previous year
- 2025Restructuring roadmap for the European businesses presented in February
- 2025Capital-return plan cut from ¥80bn to ¥70bn
Founding Story
1888–1968From the Besshi copper mine to an industrial machinery maker
For its first sixty years the company existed to serve someone else: it machined what the Besshi copper mine needed, and it sold almost nothing outside the Sumitomo group. When the zaibatsu were broken up and the captive orders stopped, a works that could build anything and dominate nothing ran straight into loss, and the recovery — specialist plants, a narrower product line, licensed technology from Europe — set the pattern by which it would grow for the next half-century.
The machine works the Besshi mine created, and the pre-war years
The origin of Sumitomo Heavy Industries lies in the machine shop of the Sumitomo Besshi Mining Office 住友別子鉱業所工作方, set up in 1888 at the Besshi copper mine in Niihama, Ehime Prefecture[1]. It was a machining department created to supply in-house the machinery and plant that running a mine required. Where Mitsubishi took its Nagasaki shipyard as the starting point for shipbuilding and heavy machinery sold on the open market, the Sumitomo zaibatsu — the family-controlled industrial combine — kept mining at its core and treated the machinery arm as a works building for the mine. According to the 1968 corporate history Kigyo no Rekishi: Meiji Hyakunen 企業の歴史 明治百年, the works, which had begun as the machinery section of the Besshi mining office[2], was renamed the Niihama Works of Sumitomo Besshi Mining Co. in 1928[3], became independent in November 1934 as Sumitomo Kikai Seisakusho with capital of ¥5 million[4], and in 1940 — still a single-site operation — was renamed Sumitomo Machinery Co., the direct predecessor of the present company[5]. For all the successive changes of name and increases of capital, its character was strongly that of a contractor taking orders for industrial machinery from within the Sumitomo group, and no active selling was done outside it. That it had started life as a captive works inside a mine left it short of commercial muscle when it was exposed to a competitive market after the war, and the problem stayed with its management for a long time.
In 1935 the company tied up with Cyclo of Germany and entered the cyclo reduction gear, a drive that achieves speed reduction without gear teeth[6]. This was its one pre-war entry into a business ahead of the field, and it became a mainstay after the war, a pillar that supported the company for decades. Beyond it, however, the company followed a generalist line — presses, materials-handling machinery, wire and cable machinery, chemical machinery, mining machinery, refining machinery, anything at all — and came through to the post-war years still weak at selling outside the group. That weakness in selling beyond Sumitomo burst out as a management problem when the zaibatsu were dissolved after the war. A pre-war style of management that never narrowed the product range and put a little of itself into every field of machinery secured volume, but it was a structure in which competitiveness in any one business was hard to build. It was a trait common to pre-war zaibatsu companies, and in the post-war market it became a weakness.
The first crisis after the dissolution of the zaibatsu, and the dispersal of plants
Defeat and the dissolution of the zaibatsu broke Sumitomo Machinery's commercial base. To shed the zaibatsu name the company was renamed Shikoku Kikai Kogyo in December 1945[7], and reverted to its old name, Sumitomo Machinery, in May 1952 after the peace treaty[8] — both changes belong to this period. The reason for group orders had gone and the company was exposed to competition in the market, while its cost structure — a single site at Niihama and an all-round product line — went unimproved, and it fell into loss for two years running, in the years to March 1954 and March 1955. The net loss for the year to March 1955 reached $1.9M (¥690m), above the company's capital of $750,000 (¥270m) at the time[9]. By the end of September 1954 its equity ratio had fallen to 4 per cent, and the company drew attention as a major zaibatsu firm on the edge of negative net worth. As a management crisis at a zaibatsu company so soon after the war it was serious in degree, and the company reached a point where negative net worth could be avoided only on the assumption of support from the group's financial institutions. The generalist constitution formed before the war had burst out as a fatal weakness in the post-war competitive market, and for Sumitomo Machinery this was the point from which it started again.
As an emergency measure the company drew down its asset revaluation reserve to cover the deficit and narrowly avoided negative net worth. President Samejima Tatsuo (鮫島竜雄) resigned to take responsibility[10]. Out of this crisis came a succession of new specialist plants — the Nagoya works in 1961[11], the Chiba works in 1965[12] — and the break from the single-site structure at Niihama began. In 1966 the company tied up with Netstal of Switzerland and entered injection moulding machines[13], the origin of what would become its plastics machinery business. This was the period in which Sumitomo Machinery began to change shape, from a generalist in industrial machinery into a maker with plants rationalised around individual fields. Assigning products plant by plant, and seeking efficiencies that the all-round works at Niihama could not absorb, was carried forward as an extension of the response to the crisis. On the foundation of that post-war crisis, the company would advance step by step into specialisation and the dispersal of its sites.
Notes
- Sumitomo Heavy Industries, annual securities report for the 130th term (year to December 2025), “Corporate history”↩
- 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
- Sumitomo Heavy Industries, annual securities report for the 130th term (year to December 2025), “Corporate history”↩
- Sumitomo Heavy Industries, annual securities report for the 130th term (year to December 2025), “Corporate history”↩
- 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
- 住友重機械50年史 (Fifty Years of Sumitomo Heavy Industries)↩
- 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
- 企業の歴史 : 明治百年 (Corporate Histories: A Century of Meiji, Keizai Shunju-sha, 1968)↩
- 経済時代 (Keizai Jidai), vol. 28 no. 3, 1963↩
- 住友重機械50年史 (Fifty Years of Sumitomo Heavy Industries)↩
- Sumitomo Heavy Industries, annual securities report for the 130th term (year to December 2025), “Corporate history”↩
- Sumitomo Heavy Industries, annual securities report for the 130th term (year to December 2025), “Corporate history”↩
- 住友重機械50年史 (Fifty Years of Sumitomo Heavy Industries)↩
References & sources
- Corporate Histories: A Century of Meiji, Keizai Shunju-sha (1968), the Sumitomo Machinery entry.
- Sumitomo Heavy Industries, Ltd. (annual securities reports) and results-briefing materials, including the February 2024 announcement of withdrawal from newbuilding alongside the medium-term management plan to 2026 and the February 2025 restructuring roadmap for the European businesses.
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