Environmental
Sustainability Report

2007Environmental Sustainability Report

2007
Contents
Company Outline

2

Introductory Message

3

Sumitomo Heavy Industries Group Environmental Policy

4

Environmental Management

4

Environmental Management Organization

5

Environmental Objectives (medium term plan) and Results

6

Global Warming Prevention Activities

7

Activities Directed toward the Recycling - Based Society

9Chemical Substances Management Activities

11

Environmental Accounting

13

Company Products that Contribute to Environmental Preservation

14

Environmental Impact Data on Manufacturing Facilities

20

Environmental Impact Data on Related Companies

21

Social Contribution Activities

22

Environmental Activities

24

Environmental Management Network

25●About editing
The Sumitomo Heavy Industries Group (Sumitomo Heavy Industries, Ltd. and groupcompanies) Environmental Report was issued in 2001 and the report’s [PF1] scope
was expanded to include a social aspect and became the Environmental
Sustainability Report from 2005. This report refers to the Environmental Report
Guidelines (2003 version) of the Japanese Ministry of the Environment.
● Report Target

Sumitomo Heavy Industries, Ltd. and group companies● Target Period

April 1, 2006 — March 31, 20071

■ Company Outline
Company Name:Founded:November 11, 1888

Incorporated:

November 1, 1934

Head Office:Think Park Tower, 1-1,Osaki 2-chome, Shinagawa-ku, Tokyo

Employees:

12,561 consolidated 2,752 non-consolidated

Net Sales:

consolidated: 600,256 million JPY
non-consolidated: 259,423 million JPY■ Sumitomo Heavy Industries Group Main Business Areas[Mass-produced Machinery]
Power Transmission and control, Plastic Injection Molding Machines, Filmforming machines,Cryogenic Equipment,Stage systems,Transfer Molding Press
Machines,Laser Processing Systems,Forklifts, Precision Forgings & Castings,
ron and Steel products, Defense Equipment,Cyclotrons for Medical Use, Ion
Accelerators,Plasma Coating System for FPDs (Flat Panel Displays),
Sumitomo NACCO Materials Handling Co., Ltd., Seisa Gear, Ltd., SEN Corporation— an SHI and Axcelis Company, Sumitomo Heavy Industries HIMATEX Co., Ltd.,SHI Plastics Machinery, Ltd., Sumitomo Heavy Industries Finetech, Ltd., Sumiju
Precision Forging Co., Ltd., Sumiju Techno Center Co., Ltd., Sumitomo Heavy
Industries PTC Sales Co., Ltd., Sumitomo Heavy Industries Mechatronics, Ltd.
Sumitomo Machinery Corporation of America (SMA), Sumitomo (SHI) Cycle
Drive Germany GmbH, Sumitomo (SHI) Cyclo Drive China, Ltd., SHI Plastics
Machinery, Inc. of America, Sumitomo (SHI) Plastics Machinery Mfg. (USA), LLC,
Sumitomo (SHI) Plastics Machinery Mfg. (America), LLC, Sumitomo (SHI)
Cryogenics of America, Inc. Sumitomo (SHI) Cryogenics of America, Inc.
[Environmental Protection Facilities, Plants & Others]
Power Generation Systems,Water and Sewage Treatment Systems Facilities,
Landfill Leachate Treatment Systems,Air Pollution Control Plants,Municipal
Solid Waste Incineration Plants,Chemical Process Equipment & Plants,
Food Processing Machines, and Software
Sumitomo Heavy Industries Environment Co., Ltd., Sumitomo Heavy Environmental
Engineering Inc., Sumiju Environmental Technology Co., Ltd., Sumiju Plant
Engineering Co., Ltd., Lightwell Co., Ltd., Izumi Food Machinery Co., Ltd., Nihon
Spindle Mfg. Co., Ltd.
[Ship, Steel Structure, and Other Specialized Equipment]
Ships,Marine Structures,Material Handling Systems, Bridges & Steel Structures,Pressure Vessels,Mixing Reactors,Turbines, Pumps
Sumitomo Heavy Industries Marine & Engineering Co., Ltd., SHI Mechanical &Equipment Inc., S. H. I. Examination & Inspection Ltd.
[Industrial Machinery]
Logistics & Handling Systems(Automated warehouse system,Automatic highspeed sorting system & Others),Parking systems, Moving walkways,Forging
Presses, Material handing systems(Continuous unloaders,container cranes &Others),Turbines, Pumps
Sumitomo Heavy Industries Engineering & Services Co., Ltd., Sumitomo Heavy
Industries Techno-Fort Co., Ltd., Shin Nippon Machinery Co., Ltd.
Sumitomo Heavy Industries Technology (Hong Kong) Co., Ltd.
[Construction Machinery]Hydraulic Excavators, Mobile Cranes, Road Construction Machinery
Sumitomo Construction Machinery Co., Ltd., Hitachi Sumitomo Heavy Industries
Construction Crane Co., Ltd.

2

Sumitomo Heavy Industries Environmental Sustainability Report 2007

A company that makes valuable contributions
to the continuous development of our society
Introductory Message
As a company, our mission is to contribute to building, and making a reality, a continuously
developing society. As such, it is natural that a deep concern for solving our environmental problems
is a large part of that mission.
In particular, global warming is perhaps the most serious of all environmental problems facing us
today. Therefore, in our efforts to combat global warming as a company, in August 2005 we instituted
a Sumitomo Heavy Industries group-wide sweeping commitment to strive to reduce carbon dioxide
emissions, the main cause of global warming.
Three of our company-wide goals are to "Reduce electronic device use," "Reduce paper use" and"Promote green distribution," and we have been seeing strong progress in reaching these goals. In
terms of our efforts to reduce use of electronics, despite the fact that our production has increased, we
saw a 1.6% decrease in the total amount of electronic device use from 2004 to 2006. Also, in 2007
there is a good chance that we will be able to achieve a 10% reduction from 2004 levels.
We have long had a deep consciousness of the role we as a company must play, in terms of our
products and production activities, in reducing the environmental burden and protecting ourenvironment. We are devoting our efforts to more than meeting the environmental protection
demands of society by making our products lighter and smaller and reducing energy use as we
continue to offer products of superior functionality and quality.
In terms of products, we started with environmental systems such as municipal garbage
incinerators, recycling systems, water treatment and air purifying systems and have moved on tothings such as semiconductors for injection molding machines, XY stage systems and laser
processing systems. We also make digital devices for home electronics, automatic parking systems
for cars, moving sidewalks and distribution systems among other things that support local
municipalities as they work to protect the environment. In addition, we also make various kinds ofmultipurpose machines like construction machinery, conveying and loading machinery, metal
processing machinery and cyclo drive machinery, which combined with our marine products, gives
one an idea of how far and wide our contribution to societal and environmental protection extends.
In terms of production, all of our manufacturing facilities and our important group companies
participate in the ISO 14001 management system. Also, the entire Sumitomo Heavy Industries Group
is strongly committed to continuously minimizing waste, reducing carbon dioxide emissions andreducing hazardous chemicals and has made significant progress in all areas. In terms of preventing
environmental pollution, we are also committed to working our hardest to avoid potential
environmental risks by taking preventative steps in advance.
As for protection of local environments, as we have long been doing, we are actively involved inholding conferences and consultations with local citizens about environmental preservation. This
report is a continuation of our 2006 report and is a summary of our environmental efforts. We
welcome opinions, comments and advice and will take them into consideration in our ongoing efforts
to sustain and preserve our environment.

President and CEO(Yoshinobu Nakamura)3

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Sumitomo Heavy Industries Group Environmental Policy
We will always work to achieve the following as we ensure thateach Sumitomo Heavy Industries Group company has a strong andabiding consciousness of their social obligation to preserve andprotect the environment in our circular economic activities.

Considerthe environmental
impact surrounding
our facilities
Reduce waste

Prevent
environmental
pollution
Save energy
Save resources
Promote recycling

Our determination to strictly adhere to all legal restrictions is one of our core
concerns, and our environmental risk management has developed as part ofthat commitment. In September 1999, when our "Sumitomo Heavy Industries
Environmental Policy" was enacted, the idea of consciously considering theenvironmental impact of our businesses was clearly stated and became one of
our core principles.

●Enacted November 1, 1999

Environmental Management
set, an environmental program created and put into practice andthen audited and finally evaluated. At group companies outside ourmanufacturing area, the environmental policy enacted by ourpresident is in effect. In particular, we have made carrying out ourenvironmental program a main theme of both our products andproduction activities. To ensure that our management system isbeing fully implemented and to facilitate continuous improvement,
the Environmental Management Division at our head officeconducts internal audits and supervises an external auditingorganization in conducting audits once a year.

Each manufacturing facility (including local area group companies)
within our manufacturing area has enacted this environmental
policy, while environmental management systems in keeping with
ISO 14001 standards are being promoted at all our manufacturing
facilities. Firstly, any and all elements that could potentially havean environmental impact are inventoried, and then an
environmental impact evaluation is undertaken and any applicablelegal restrictions are made clear and faithfully observed. We’ve
improved our management system and made PDCA an essential
part of our system by requiring that environmental goals be

4Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Management Organization
As the entire Sumitomo Heavy Industries Group (Sumitomo Group)
continues to work towards further development and ever more
improvement, the General Secretary under the auspices of theEnvironmental Management Division conducts environmental
management planning, carries out plans and also conducts periodic
audits. The Sumitomo Group Environmental Management Committee
also monitors the environmental activities throughout the group to
ensure that they are thoroughly implemented in accordance with ourenvironmental policy. With the prevention of global warming being
such a critical issue to all of us, we are working particularly hard on
this problem through our Global Warming Prevention AssistanceConference.

In order to ensure that our environmental protection activities
continue to be effective and productive, all of our manufacturing
facilities and business units as well as our main group companies
have received ISO 14001 certification. Our manufacturing facilities
and business units are actively conducting their environmental
management activities and working towards continuous improvementin keeping with ISO 14001 standards. The group company insideeach manufacturing area is actively conducting their environmental
management within their respective organization. As for companies
that are outside our manufacturing area, they are conducting their
ISO 14001 environmental management activities in a similar fashion
but within their own independent organizations.
Sumitomo Group Environmental
Management Committee
Global Warming Prevention
Assistance Conference
Secretariat: Environmental
Management Division

President
General Secretary

Related companies

Environmental Committee

Manufacturing facilities

Environmental Committee

Business Division

Environmental Committee

Environmental Management
Division
Environmental Audit Team■ Group companies and manufacturing facilities and businesses that havereceived ISO 14001 certification and are working within the certified range.
※ The date noted below is the date of certification

Sumiju Plant Engineering Co., Ltd.
● Sumiju Business., Ltd.
● Sumiju Tokki Service Co., Ltd.

■ Group companies that have independently received
ISO 14001 certification※ The date noted below is the date of certification●

Tanashi Works,
August 1998

Sumitomo NACCO Materials Handling Co., Ltd.
March 2003

Sumitomo Construction Machinery Co., Ltd.
SHI Plastics Machinery, Ltd.
● Sumijyu Platec Co., Ltd.
● Sumiju Logitech Co., Ltd.
●

Chiba Works,
April 1994●

Shin Nippon Machinery. Co., Ltd.
February 2002

Sumitomo Heavy Industries Marine & Engineering Co., Ltd.
Sumiju Precision Forging Co., Ltd.
● Sumiju Techno Center Co., Ltd.
● Sumiju Yokosuka Kogyo Co., Ltd.
● Sumiju Kankyo Analysis Service Inc.
●

Yokosuka Works,
February 1992●

Hitachi Sumitomo Heavy Industries Construction Crane Co., Ltd.
Sumiju Tomita Machinery Co., Ltd.
● Sumiju Technos Co., Ltd.
● Sumitomo Heavy Industries PTC Sales, Co., Ltd.
●

Nagoya Works,
January 1999

Okayama Works,
March 2003

Ehime Works(Niihama Factory),
November 1999

Ehime Works (Saijo Factory),
February 1999

Izumi Food Machinery Co., Ltd.
June 2002

SEN Corporation - an SHI and Axcelis Company
October 2002●●

Sumiju Environmental Engineering Inc.
October 2002

Sumitomo Heavy Industries Finetech, Ltd.

Sumitomo Heavy Industries Techno-Fort Co., Ltd.
Sumitomo Heavy Industries Engineering & Services Co., Ltd.
Sumitomo Heavy Industries HIMATEX Co., Ltd.
● Sumiju Techno Craft Co., Ltd.
●
●
●

●
●

Nihon Spindle Mfg. Co., Ltd.
March 2006

SHI Mechanical & Equipment Inc.
S.H.I. Examination & Inspection, Ltd.

- Energy & Environment Group- Water & Wastewater Engineering Group (presently, Sumitomo
Heavy Industries Environment Co., Ltd.), November 2002●

Lightwell Co., Ltd.
May 2002

Sumiju Environmental Technology Co., Ltd.

Note: Where a group company has more than one manufacturing facility only one will be listed as a representative.

5

Japan Irradiation Service Co., Ltd.
February 2007

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Objectives (medium term plan) and Results
expansion of the range of related environmental activities including
maintenance and renewal of ISO 14001 certifications.
Areas in which we reached less than 80% of the target include thefollowing: reduction in the amount of electricity use as related to theemissions of carbon dioxide, reduction in the occurrence and amount ofwaste, reduction of hazardous chemicals that cause soil contamination due
to the discharge of ozone layer depleting organic chlorine chemical
substances. We will be working harder than ever in 2007 to reach ourtargeted goals in the areas in which we fell short in 2006.

All of our activities are conducted based on our environmental objectives(medium term plan). Our results for 2006 are listed below.
Areas in which we reached our target are the following: reduction in theamount of waste disposed (amount of landfill), reduction in the amount ofwater used, management of PCB (polychroriroted bipfenyl) and expansion in
the number of ISO certifications.
Areas in which we reached over 80% of the target are the following: zero
emissions, control of the discharge of ozone layer depleting organic chlorine
chemical substances, controls placed on the discharge amounts of VOC(volatile organic compounds) substances, promotion of green procurement,
Evaluation:
Barometer

GlobalWarmingPrevention

Item1) Reduce carbon dioxide
emissions and electricity use
in both factories and offices

Reached the target,

Reached over 80% of the target,

Medium term plan2006 Results

By 2010, reduce carbon dioxidethroughout the entire group to 18%
below 1990 levels (electricity use
as of 2007 has been reduced by
10% compared to 2004 levels)

Reduce carbon dioxideby 4.4% compared to 1990
levels (As of 2004 we havealready reduced electricity
use by 1.6%)

Reduce carbon dioxide per trans2) Encourage green transportation portation unit to 10% less than 2006 Total transportation volumeof 31,560,000 kilometer tons
reduce carbon dioxide emissions levels by 2010
Transportation unit 0.025
in our transportation activities
Transportation unit = amount of(t-carbon dioxide/t)
energy used / total transportation
volume (tonnage)

Evaluation

Reached less than 80% of the taget
2007 Plan

Reduce electricity use in 2007 by 10%
compared to 2004 levels

Using 2006 as a standard, reduce 2007transportation units by 2% (Amended Energy
Conversation Law stipulates a 1% reduction)

1) Reduce the occurrence ofwaste and waste disposal

2010,- Amount produced 21,000 tons
(32% reduction compared to 2001)- Amount disposed 2,000 tons (77%
reduction compared to 2001 levels)

2) Achieve zero emissions- Achieve more than a 95%
Recycle rate of 89.2%,
recycling rate in all divisions by 2010 Achieve a greater than 95%- Achieve a 95% recycling rate
rate at 5 locations (last yearby 2007 and then aim for zero
3 locations succeeded)emissions

Achieve a greater than 95% recycling rate
(Sumitomo Group average)3) Reduce paper use- By 2008 reduce by 30% compared Reduce by 5.8% compared
to 2005 levels (started as
to 2005 levels- Continue to promote paperless work of October 2006)

Using 2005 as a standard, reduce by 15% in alldivisions4) Reduce water use

By 2010 reduce by 14% compared
to 2005 levels

Reduce by more than 13% compared to 2005
levels1) Control the discharge of ozone
layer depleting organic chlorine
chemical substances (SoilContamination Countermeasures
Law, Montreal Protocol)

1) In accordance with Soil Contamination 2005 Comparative Standard
Countermeasures Law,completely
1) Respective reductions:eliminate the use of hazardous chemical dichloromethane 35.2%,
substances, dichloromethane,tetrachloroethylene 81.9%
tetrachloroethylene, trichloroethylene by and trichloroethylene 6.3%
2010. 2) By 2010 reduce ozone layer 2) Respective reductions:depleting substances HCFC-141b,
HCFC-141b 11.2%,
HCFC-225 to 50% of 2006 levels
HCFC-225 55.2%

1) Reduce dichloromethane, tetrachloroethylene
and trichloroethylene by more than 50%
compared to 2005 levels
2) Reduce ozone layer depleting substances
HCFC-141b by more than 20%

Promotethe prevention 2) Control the release of VOC
substances (Air Pollutionofenvironmental Control Law))pollution

Control the emissions of painting
Handled amount for 2006:
solvents (mainly toluene, xylene
and ethylbenzene), By 2010 reduce 1090t (1100t in 2005)
by 30% compared to 2006 levels

Reduce the amount of emissions of these 3 substances by more than 10% compared to 2006
levels- Control the amount of emissions by changing
and rebuilding equipment- Expand the use of low solvent paint products

3) Management of PCB’s:eliminate all contaminatedequipment (In accordance with
the Law Concerning Special
Measures Against PCB Waste)

By 2010 completely eliminate the useof lighting equipment stabilizers, trans- 1) Equipment with highformers and capacitors containing
concentrations of PCB s
PCB s. 1) Investigation into highhas been registeredconcentrations has been completed
2) Investigation for low2) Investigation into low concentrations concentrations is ongoing
will be completed in 2008 and renewedin turn based on our plan

1) We have already registered our equipmentwith high concentrations of PCB s with the Japan
Environmental Safety Corporation. After
receiving an okay for disposal notification we will
dispose of the items as directed
2) Our investigation into low concentrations is
proceeding according to plan

- Based on customer basic expectations:
Guarantee to ship no products with harmful Activities underway Green
substances - Ensure that our suppliers make procurement guidelines area guarantee to supply parts and products
currently being writtenwith no harmful substances included- Distribute Green procurement guidelines to all
relevant parties- Explain the planned activities to each manufacturing area and relevant companies and suppliers

Save
resources,
promoterecycling

Expand our products that take Promote green procurement
the environment (raw materials o parts purchases)
into consideration

2) Expand the number of group

3) Expand the targeted rangeof connected environmental
management activities

Reduce by 13% compared
to 2005 levels- Amount generatd 24,300 tons (21% reduction
compared to 2001 levels)- Amount disposed 2,300 tons (74% reduction
compared to 2001 levels)

Three incidents of verbal
guidance

Zero legal ordinances water quality violations(Including verbal guidance)

One related company hasreceived certification andtwo are in the process of
preparing for certification

Two related companies are in the process of
preparing for certification (and expect to becertified by 2008)

Expand to our important overseas
We have been begun an
production facilities, In 2007, investi- investigation of relevantgate the environmental risk at three legal ordinances at threeof our Chinese factories and thenChinese factories
expand to other regions after that

Currently undertaking an environmental
management investigation (a survey) at three
Chinese factories

1) Maintain and renew ISO 14001 Zero environmental accidents(Violations of the law)certification

Environmental companies that receive ISO
Management 14001 certification

Amount generated: 27960t(9.2% reduction compared
to 2001 levels), Amountdisposed of: 3007t (66%
reduction compared to 2001
levels)Expand the number of domestic
businesses that receive ISO 14001
certification (particularly factories
and related companies)

6

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Global Warming Prevention Activities
Full participation activities
At the Sumitomo Group we strongly encourage each and every one of ouremployees to take the initiative and personally tackle the issue of global
warming. We want every single Sumitomo Group employee to take actions toprotect our natural environment as we strive for a commitment to environmental
preservation that permeates the entire company. With the goal of fullparticipation of every employee of both the Sumitomo group and our associatedcompanies in our environmental activities, we have created a character, "Eco
Marukun," to symbolize the growth and development of our environmental
movement. Eco Marukun will be seen on posters, stickers and folding fans as away to deepen our consciousness of the environmental issues we face and tospur us on to further action.
Working together to stop global warming
Team Minus 6%

Eco Marukun poster

Energy reduction - Carbon dioxide emissions reduction
Sumitomo Heavy Industries Group Manufacturing Facilities(Including factories within our group area)
Group companies (outside the Sumitomo Heavy Industries Group area)■ Total energy consumption
(TJ)
3,000
2,500

2,040

2,000
1,500
1,000
500

369

0
1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006 Year※ We do not have data for the quantity of fuel used from 1996-1998. Therefore, we have calculated the average of the quantity used between

2000-2002.

■ Amount of carbon dioxide emissions

Sumitomo Heavy Industries Group Manufacturing Facilities(Including factories within our group area)
Group companies (outside the Sumitomo Heavy Industries Group area)(10,000 tons)
11

Amount of carbon dioxide emissions

In 2001 we set a goal of realizing a 9%
reduction (the old objective line) in carbon
dioxide emissions throughout the entire
Sumitomo Group by 2010. In August 2005
we began our global warming prevention
activities and committed ourselves toreducing our electricity usage. Our efforts
to reduce electricity usage will directly aid
us in our efforts to reduce carbon dioxide
emissions. As such, we have decided to
set the bar higher for ourselves, and wehave now resolved to achieve a reduction
by 2007 to 10% less than 2004 levels. In
2006 the Sumitomo Group used 2,410
tera joules (compared to 2,460 tera joules
in 2005), of energy (electricity and fuel),
and carbon dioxide emissions amounted
to 9.67 million tons (compared to 9.79
million tons in 2005), which is 2.2% better
than 2005 and a 1.2% reduction.
Notwithstanding our production increases,
we have had successes in our energy
reduction efforts as we have seen both areduction in energy use and in carbon
dioxide emissions. Starting this year we
will be working harder than ever on
promoted reduced energy use and carbon
dioxide emissions through proper usage
management and reduction in wastefulusage of everything from powermachinery to air conditioning to lighting,
reduced machine energy use and efficient
usage of equipment through use of
inverters.

Old objective line
10

Objective line
9

1.4

8
7
8.2
6
5
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year

※ We do not have data for the amount of carbon dioxide emissions or amount of fuel consumed from 1996-1998. Therefore, we have calculated

the average of the quantity used between 2000-2002.

7

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Reducing electricity usage■ Amount of electricity used

Using 2004 as a standard, we have set ourselves a goal of
reducing electricity usage in 2007 by 10% compared to 2004
levels. In 2006 we achieved a reduction of 1.6% compared to 2004
levels. In the manufacturing division, the energy saving effects ofreduced stand-by power, more energy-efficient lighting, and alights-off policy have exceeded the amount of energy used inincreased production. In the Office Division, we have seen great
results by our efforts in promoting a lights-out policy and Cool Biz,among other things. Our efforts to reduce electricity usage areclosely linked to our ISO 14001 environmental management
system, and both are moving forward enthusiastically.

Sumitomo Heavy Industries Group Manufacturing Facilities(Including factories within our group area)
Group companies (outside the Sumitomo Heavy Industries Group area)

Amount of electricity used

(Million kilowatt hours)
220

Efforts to Reduce Paper Usage

Objective line

200
33

35

34

175

177

171

2004

2005

2006

180
160
140
120
100

■ Amount of paper used

Our efforts to reduce the amount of paper we use and the shift to amind-set of reducing resource usage are inevitably connected toefforts to reduce carbon dioxide emissions and the nationwide
global warming prevention campaign. The Sumitomo Group is
working hard to reach our goal in 2008 of a reduction of 30%
compared to 2005 levels. In 2006 we were able to realize a
reduction of 5.8% from 2005. With ongoing efforts to reduce waste- like printing two-pages-per sheet, making double-sided copies,
utilizing the opposite side of a piece of paper and using projectors
in meetings - we fully expect to see even greater reductions in the
future.

2007 Year※ Excluding the paper in the diagram

Sumitomo Heavy Industries Group Manufacturing Facilities(Including factories within our group area)
Group companies (outside the Sumitomo Heavy Industries Group area)(Pieces)Target value

120,000

Amount used

100,000
80,00060,00040,00020,0000 ,96Promoting Green Transportation

31,55656,404

,00

,01

,02

,03

,04

,05

,06

,07

,08 Year

10% reduction compared
to 2006 levels)（t-CO2/t）
0.0300

Amount of carbon
dioxide emissions

Target value
0.02500.02000.01500.02500.01000.0050Carbon dioxide
Carbon dioxide emissions
emissions amount amount (transportation unit)(t- carbon dioxide)(t- carbon dioxide/t)
3873

,99

(Amount of carbon dioxide emissions; transportation unit)■ 2006 amount of carbon dioxide emissions (transportation unit)
Energy(GJ),98■ Green transportation

Based on the Amended Energy Conservation Law that came into
effect in April 2006, we have calculated our transportation kilo
tonnage. Our actual kilo tonnage for 2006 was 31,560,000 kilo tonsof special freight. By 2009 our goal is to reduce the basic unit ofcarbon dioxide emissions by 10% compared to 2006. As part of ourefforts, a person has been assigned at each business unit to be
responsible for eliminating wasteful shipping and increasing
shipping efficiency. Both the 2006 basic unit and the 2009 goals
are displayed on the list and diagram to the right.

Kilotons(thousand kilotons)

,97

0
2006

0.02502007

2008

2009 Year

Promoting Green Procurement
to green procurement efforts by presenting to all our business
partners our "Sumitomo Heavy Industries Group Green
Procurement Guidelines."

From our products to our production, we are committed to reducing
the environmental impact of our activities. This means that we must
reduce the environmental impact at all stages, from initial
procurement to waste disposal. We have stressed our commitment8

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Activities Directed toward the Recycling - Based Society
Building a resource recycling oriented society, allowing forunlimited development potential, is one of the most important
issues we face. All of our business units have set goals to reduce
emissions as much as possible while also improving efforts torecycle waste whenever possible as we strive to reduce our overall
environmental impact. We have separated our emissions into thefollowing three categories and are managing them accordingly.

Valuable Resources
Waste Disposal

Recycling ofWaste asResources Materials

Landfilled orincinerated as
unusable waste

Mainly consitutemetal scrap
which is recycled
for reuse

Although discarded aswaste, subject toresource recovery
and reuse

efforts and have expanded into recycling casting waste grit (paving
aggregate), waste paint and sludge. From 1996 to 2001 we paid
particular attention to our specific goals of reducing the amount of
our treated waste and increasing our recycling. In 2001 our results
actually exceeded our target, so we used 2001 as a new baseline
and set even higher goals for ourselves in terms of controllingemissions and the amount of treated waste (including reclaimed
waste and incinerated waste). In other words, our new goals meanthat by 2010 we will be aiming to have reduced emissions by 32%,
and the amount of treated waste by 55% compared to 2001 levels.
In 2005, our production increased, and our emissions of 27,969
tons were 10% over our goal of 25,400 tons. Even so, we wereable to exceed our goal in the amount of treated waste of 5,100
tons as we produced only 3,007 tons. Currently, the recycling rate
throughout the entire group is 89%. We plan to increase this rate
to 95% by the end of 2007. Our next goal will be to achieve zero
emissions.

Controlling emissions (= treated waste + recycled waste + valuable
resources) and reducing treated waste are critically important
issues. Reducing the emissions caused by our production activities
is connected to our efforts to save resources and reduce energyuse, and also helps preserve our environment as part of our
mission to control our overall level of emissions. The standards
used by waste treatment facilities regarding the items they will
accept are becoming increasingly stringent, making it ever morecritical that we reduce our amount of waste. In addition tocontrolling emissions and reducing waste treatment, we must also
reduce wastefulness on the production side while controllingemissions and striving to recycle waste whenever possible. Whilecontinuing with our efforts at sorting rubbish, we are also promoting
the complete recycling of resources by using recycled paper (madefrom chip material), low grade scrap metal (raw metal material) andpackaged wood (made from chip material, construction
pressboard). We recognized that we must improve our recycling■ 2006 Emissions

Sumitomo Heavy Industries Manufacturing Facilities (Including manufacturing area group companies)
Group companies (Sumitomo Heavy Industries manufacturing facilities outside the group area)

Amount of treated waste X

2,699

Amount of waste recycled Y

2,097

Amount of waste W(X+Y)

308 Total 3,007
396 Total 2,493

4,796

704 Total 5,500

Valuable resourcesZ

18,978Emissions S(X+Y+Z)
0t

3,491 Total 22,469
23,7745,000t4,195

10,000t

15,000t
Emissions t

920,000t

25,000t

Total 27,969
30,000 t

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Sumitomo Heavy Industries manufacturing facilities(Including manufacturing area group companies)
Group companies(Sumitomo Heavy Industries manufacturing facilities outside the group area)■ Recycling rate

88 6%
88.6%
Recycling Rate (Y+Z)/S
92.7%
0%

20%

40%

60%

80%

Amount of treated waste X
Amount of waste recycled Y

100%

Valuable resources Z
Emissions S(X+Y+Z)

Sumitomo Heavy Industries manufacturing facilities(Including manufacturing area group companies)
Group companies(Sumitomo Heavy Industries manufacturing facilities outside the group area)■ Encouraging improvement in reducing the amount of treated waste
and the amount of emissions(t)
45,00040,00035,000

Amount of waste emissions objective line
30,000

4,195

25,00021,000t

Old objective line

20,00023,77415,000

Amount of waste
treated objective line

10,000
5,000
0

X
S
1996

X
S
1997

X
S
1998

X
S
1999

X
S
2000

X
S
2001

X
S
2002

X
S
2003

308
2,699
X
S
X
S
2005
2006

X
S
2004

2,000t…

X
S
2010 Year

Sumitomo Heavy Industries manufacturing facilities(Including manufacturing area group companies)
Group companies(Sumitomo Heavy Industries manufacturing facilities outside the group area)■ Encouraging improvement in the rate of recycling
(%)
100
80
60
40
20
0
1996

Reducing the Amountof Water Used
We have set ourselves a goalof reducing our water use in2010 to 14% less than theamount used in 2005. In 2006,
thanks to our efforts to makeour water pipes visible (above
ground) we have been able toeliminate water leaks andreduce our water usage by
12%.

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006 Year

Sumitomo Heavy Industries manufacturing facilities(Including manufacturing area group companies)
Group companies(Sumitomo Heavy Industries manufacturing facilities outside the group area)■ Amount of water used3（m ）2,500,000

Objective line
2,000,000
1,665,050m3
1,500,000
1,000,000
500,000
0
2001

2002

2003

10

2004

2005

2006

2007

2008

2009

2010 Year

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Chemical Substances Management Activities
The following four issues are of critical importance to us in oureffort to effectively manage chemical substances and work towards
preventing environmental pollution.

Controlling the emissions of organic chlorine compounds■ Soil Contamination Countermeasures Law targeted
substances (dichloromethane, tetrachloroethylene and trichloroethylene)（kg）
20,000

Amount handled

1) We have set ourselves a goal to completely eliminate by2010 the use of dichloromethane, tetrachloroethylene andtrichloroethylene, the substances targeted by the Soil
Contamination Countermeasures Law. Through our efforts at
utilizing alternative substances, we were able to reduce ouremissions of dichloroethylene by 35.2%, tetrachloroethylene
by 81.9% and trichloroethylene by 6.3% compared to 2005
levels. The figure to the right shows our actual results for all
three substances from 2004 to 2006. 2006 shows a 37%
decrease in emissions compared to 2005.

16,96316,000

16,25512,00010,7408,000

Completely
eliminate
by 2010

2,000
0
2004

2006

2010 Year■ Ozone layer depleting substances(HCFC-141b, HCFC-225)
（kg）
2,000

Amount handled

2) We have set ourselves a goal of reducing our emissions ofozone layer depleting chemicals HCFC-141b, HCFC-225 by
50% in 2010 compared to 2006 levels. In 2006, thanks to ouruse of alternative substances, we were able to reduce ouremissions of HCFC-141b by 11.2% compared to 2005. We
were also able to reduce our emissions of HCFC-225 by
55.2%. As the diagram to the right indicates, we succeeded in
reducing our emissions of ozone layer depleting chemicals in2006 by 40% compared to 2004 levels.

2005

1,836

1,500

1,363
1,095

1,000

50% reduction
compared to2006 levels
546

500

0
2004

Control of the emissions of VOC targeted
substances

2005

2006

2010 Year

1,100

1,090

30% reduction
compared to2006 levels■ VOC

More than 90% of the targeted substances we are using are
paint solvents such as toluene, xylene and ethyl benzene.
We have set ourselves a goal to reduce our emissions by theyear 2010 by 30% compared to 2006 levels. We haveinstalled removal equipment for the large-scale painting
facilities that were the target of the legal regulations that cameinto effect in 2006. We fully expect to achieve a reduction in2007 of 10% compared to 2006 levels.

Amount handled

（ton）
1,200
1,000
800

763

718

600
400
200
0
2004

11

2005

2006

2010 Year

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Emissions and transfer amount of PRTR Targeted Substances
About 90% of PRTR (pollutant release and transfer register)targeted substances are painting materials (epoxy resin) andsolvents (toluene, xylene and ethyl benzene). While continuing
to maintain the highest quality, we are increasing our use of
appropriate low solvent paints while also expanding the setting
up of removal equipment as we work towards reducing ouremissions and transfers.

■ PRTR

Amount of emissions +Amount transferred(Tons/year)
1,600
1,329

1,316

2005

2006 Year

1,200

800

794

400

0
2004

■ PRTR 2006 Results(Unit: kg)

Chemical Substances
Issue Number

Amount of emissions Chemical Substances+ Amount transferred
Issue Number

Chemical Substance Name

30

Bisphenol A type epoxy resin

163,978200

Tetrachloroethylene

40Ethyl benzene

239,543

211

Trichloroethylene

43

Ethylene glycol

45

227

Toluene63

Xylene566,348

230

Lead and its compounds

68

Chrome and chrome trivalent compounds

350

231

Nickel132

1,1 dichloro-1-fluoroethane

1,056

304

Boron and its compounds

4,543

145

Dichloromethane

1,531

311

Manganese and its compounds

14,079177

Styrene

2,177

346

Molybdenum and its compounds

30

Chemical Substance Name

Total

Amount of emissions+ Amount transferred
0
8,560
272,6312,437
921,315,845

The total of the amount of emissions + amount transferred for Sumitomo Heavy Industries and its group companies

PCB Management and Equipment Removal
By 2010 we will completely eliminate the use of lighting
equipment stabilizers, transformers and capacitors containing
PCB’s. We have completed our investigation of equipment
containing high concentrations of PCB’s and registered thisinformation with the Japan Environmental Safety Corporation.
Our investigation of equipment containing low concentrationsof PCB s will be completed in 2008, and we will immediately
develop a plan to handle the early stages of treatment.

12

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Accounting
Environmental accounting is one of the yardsticks by which
environmental activities are measured. Sumitomo Heavy Industries
has conducted environmental accounting in accordance with the"Environmental Reporting Guidelines, 2006 Version" issued by the
Ministry of the Environment. The total cost of environmental
protection for FY2006, which includes a combination of investment
and various costs, came to 2,895 million yen, a sharp increase overthe 1,940 million yen of the previous year. This marked change
reflects the increase in the cost of efforts designed to reduce theCompany’s electric power consumption. Sumitomo Heavy Industries
intends to utilize environmental accounting as an effective tool inpromoting its various corporate environmental activities.

■ Environmental Preservation Cost

● Accounting base: (Sumitomo Heavy Industries Group) ● Accounting Term: April 1, 2006 to March 31, 2007

(Unit: million yen)

Category

Investments

Costs

Various costs incurred for handling or processing water, air, noise, vibration, chemical substances,and waste materials, for reducing energy and resource consumption and for recycling materials.

1,095

924

(1)-1 Pollution Prevention Cost

These include the cost of upgrading wastewater treatment facilities, installing dust collection systems, implementing
measures to deal with substances containing volatile organic compounds (VOCs), removing asbestos, conducting
inspections to detect traces of PCBs, operating and maintaining water treatment facilities, measuring and analyzingwater quality, exhaust emissions, noise and vibrations and ensuring conformance with various regulatory limits.

103

228

(1)-2 Global Environment
Preservation Cost

These include investment in energy saving measures and measures for monitoring electric
power demand.

974

93

(1)-3 Resource Recycling Cost

These include the costs incurred for recycling waste products, including wood, plastic, paper, oil
products, thinner, and raw garbage, creating landfill areas and implementing steps to reduce thevolumes of waste collected, transported, processed and otherwise disposed of.

18

602

These include adopting measures to switch to low-sulfur fuel oil and adopt green procurement
approaches to purchasing office supplies.

0

12

35

109

124

589

0

6

Breakdown(1) Costs Within Business Areas (sites)(2) Upstream and Downstream Costs(3) Management Activity Costs(4) Research and Development Costs

Environmental Preservation Cost

Costs in this category include administering and maintaining ISO14001 standards, providing education and training(general, specialized, screening panel training, internal auditing, etc.), supervising and monitoring various actionplans, holding regular screening, sessions expanding and maintaining green areas and providing training for andmaintaining the Pollutant Release and Transfer Register (PRTR).
Expenditures in this area cover the cost of developing equipment for incinerating, gassifying and breaking down
exhaust gases, when processing urban and industrial waste products, developing ash melting furnaces, water andsewage system facilities, implementing noise reduction measures for cyclo-reducers and new types of tube heatexchangers.

These include the cost of conducting assessments of levels of atmospheric pollution and the amounts(5) Environmental Damage Control Costs regional corporations should contribute for creating green areas and compensation to be paid when
deemed for responsible pollution.

(Unit: million yen)

Item

Description

AmountTotal Investment

Investments are for upgrading wastewater treatment facilities, installing dust collection systems, implementing measures to deal
with substances containing volatile organic compounds (VOCs), and implementing energy conservation measures.

1,254

Total Fee Costs

These include the costs incurred for recycling, collecting, transporting, processing and disposing of waste products, conducting
inspections to detect traces of PCBs, operating and maintaining water treatment facilities, measuring and analyzing water quality,
exhaust emissions, noise and vibrations, administering and maintaining ISO14001 standards, providing education and training,monitoring the implementation of action plans and holding regular screening sessions.

1,641

Expenditures in this area cover the cost of developing equipment for incinerating, gassifying and melting down ash when

Total Research and Development Costs processing urban and industrial waste products, developing water and sewage system facilities (or processing sludge, dioxins,

713

Proceeds from Salable Items

282

compost, etc.), building exhaust gas collection and processing systems (for collecting dust and removing sulfur, nitrates anddioxins), implementing noise reduction measures for cyclo-reducers and developing new types of tube heat exchangers.

These can include such leftover materials as scrap metal that are still usable.

2,895

Total Cost of Environmental Preservation Activities

13

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Company Products that Contribute to Environmental Preservation
Sumitomo Heavy Industries, Ltd. and the various other members of the Sumitomo Heavy Industries Group have supplied the market with awide range of facilities and equipment that have contributed to environmental preservation over the years.

■ Sumitomo W+E Rotary Kilns

Energy & Environment GroupJFE Materials Co. Ltd. has adopted the W+E rotary kiln for use in the roastingprocess of its rare metals recovery operation. The roasting process differs fromincineration in that the minerals are heated to temperatures below their melting point
to induce both chemical and physical changes as part of a process that requires
advanced temperature control technology. The JFE Materials process in question isused to roast such industrial waste materials as the ash taken from boilers of thermal
power generation stations. The ash is roasted at approximately 900 degrees Celsius
to remove the oils and sulfuric elements contained in the industrial waste material,prior to sending it on to the electric furnace of the next process, where it is melted
and the rare metals extracted. The rare metals are finished in the form of a ferrous
alloy in a finery furnace. Before delivering the W+E rotary kiln to JFE Materials,
Sumitomo Heavy Industries conducted an extensive program of tests on the kiln at
the testing plant located in the Niihama Factory at Ehime Works. The purpose was toconfirm the kiln was fully able to perform the required roasting operations, in addition
to its standard incinerating and melting functions. Sumitomo Heavy Industries aims
to move quickly forward by applying its current rotary kiln technology to developmentof new technology that will enable it to bring ash melting furnaces, furnaces forrecovering metals from steel dust and roasting furnaces of the type delivered to JFE
Materials to the market.

■ Biomass Power Generation

Energy & Environment Group

With growing demand in recent years to reduce the CO2 emissions responsible for
global warming and make more efficient use of waste materials as effective ways topreserve the environment, SHI has taken the initiative to develop and commercialize
a biomass power generation system based on circulating, fluidized-bed boilers.
Fueled by a combination of biomass, tire chips and plastic, there are currently 15
such power plants in operation or under construction in Japan and at overseas
locations. The new energy boiler that came online in May 2006 at the Nichinan Mill of
Oji Paper Co., Ltd. uses discarded tires and wood chips as its main source of fuelbut uses no coal or other fossil fuels. The plant also processes the gases itdischarges, and recycles part of the incineration ash. An added benefit to thesavings in energy costs at the mill is the biomass power plant s very tiny
environmental footprint.

■ High Efficiency Motor

Power Transmission & Control Group

With approximately 70% of the electric power consumed in industrial plants being
used for driving electric motors, simply enhancing the efficiency of motors can go along way towards reducing power consumption. SHI contributes to environmental
preservation through marketing a varied range of high-efficiency direct-drive typegear motors and speed reducers, as typified by the Cyclo series speed reducers. The
high-efficiency motors feature high-grade electromagnetic steel plate materials andadvances in wound coil design that reduce power consumption, conserve energy anddrive overall efficiency. Compared with conventional motors, the SHI high-efficiency
motors feature far less damage or breakdowns. The resulting longer operating lifeand greater product economy is calculated to reduce operating costs by approximately 414,300 yen per year (*). The reduction in generation of temperatures in the higher
range also extends product life and reliability.
based on a scenario where 50 units of conventional motors with ratings of 4P, 2.2kW, 220V, and* Calculation
60Hz, operating at 100% load capacity for 4,000 hours per year (at 17 yen per kWh) are replaced by equivalent SHI motors.

14

Sumitomo Heavy Industries Environmental Sustainability Report 2007

■ High Efficiency Hyponic Reduction Gear

Power Transmission & Control Group

Hyponic reduction gears are direct-drive gear motors, used to power conveyors andelevators, that feature space-saving design as a key feature. Worm, bevel andhypoid are the three gear types most commonly used in reduction type, direct-drive
gear motors. The hypoid gear used in hyponic gear motors offers higher efficiency
than worm gears and generates lower noise than bevel gears. The Hyponic gear
motors have also enjoyed wide recognition for their environmentally-friendly design
ever since their market launch in 1988. Originally designed for industrial use, ongoing
reductions in both size and operating noise have led to a broadening of applications
in non-industrial sectors.

■ Ultra-Compact HN-7 Cyclotron for PET

Quantum Equipment Div.

Positron emission tomography (PET), a new diagnostic imaging technique used in
the field of medicine, is now coming into standard use. This amazing new medical
imaging technique is capable of quickly scanning the entire body for tumors andother signs of cancer. SHI currently manufactures and sells cyclotron systems thatsynthesize the radiopharmaceutical agents used in positron emission tomography or"PET scans," as they are more commonly known. Cyclotrons are basically designed
to manufacture radioactive substances and until now have been large, cumbersome
machines that consumed power on the order of heavy machinery. SHI’s new ultracompact HN-7 Cyclotron system incorporates advanced new technology that has
redrawn the landscape for cyclotron systems. The HM-7 is only about half the size of
its predecessors and can make significant environmental contributions to hospitals interms of reduced power consumption and waste reduction.

■ Semiconductor Encapsulating Systems

Electro - Mechanical Div.

SHI manufactures and sells the "semiconductor encapsulation machines" used on
semiconductor production processes to encapsulate IC chips using thermosetting
resin. This resin differs from thermoplastic resin in that the chemical reaction involved
prevents it from being recycled. With the conventional transfer molding method, resin
is channeled through paths referred to as "culls" and "runners" to package the IC
chips. However, the resin that flows to culls and runners where there are no IC chips
simply becomes waste material. SHI s new pressure molding technique is designed
to supply thermosetting resin directly to the product mold. This ensures that the resin
utilization rate is close to 100%, thereby significantly reducing the resin from the culland runner approach that ended up as industrial waste. The Company is currently
working to expand the lineup of systems employing this pressure molding techniqueand broadening the range of products to which they can be applied.

15

Sumitomo Heavy Industries Environmental Sustainability Report 2007

■ SAT Low Concentration Anaerobic Wastewater Treatment Facility Sumitomo Heavy Industries Environment Co., Ltd.
The SAT type, low-concentration, anaerobic wastewater treatment facility was jointly
developed by three companies, including Asahi Breweries, Asahi Beer Engineering,and Sumitomo Heavy Industries. Compared with traditional activated sludge
processing facilities, the super anaerobic treatment (SAT) facility uses approximately
40% less motive power and can generate more than 60% less sludge, thereby
contributing significantly to energy conservation and reduction in CO2 emissions.
Biogases generated by the facility are burned in the boiler and can even berecovered in vapor form. The reactor vessel used is less than the size of
conventional treatment facilities and takes up much less installation space.
Anaerobic treatment was traditionally not suited to processing low concentration
wastewater. However, the unique new structure of the reactor vessel settler device
has now made this possible. The very first SAT type low-concentration anaerobic
wastewater treatment facility was installed at the new Asahi Breweries Ibaraki Plant
where it is operating smoothly as it gathers a broad range of useful data.

■ Floating Type Flocculator

Sumitomo Heavy Industries Environment Co., Ltd.

The floating type flocculator is a horizontal shaft agitator designed for use in water
system applications. Specifically, it is designed to slowly stir raw water into whichflocculating agents have been added as part of a process designed to promote thegrowth of small particles in turbid water into large aggregate flocs or flukes. A large
diameter, hollow, floating shaft that floats on the water minimizes the load thatapplies to underwater bearings, thereby significantly reducing bearing wear.
Sumitomo Heavy Industries Environment has recently redesigned the flocculator andre-examined the basic materials, as well as the bearings, to create a system thatfeatures much longer product life and lower lifecycle cost. It is also largely
maintenance-free. Several dozen of the new floating type flocculators are already inoperation throughout the Kansai region.

■ Deires Sludge Reduction System

Sumiju Environmental Engineering Inc.

The conventional methods for processing excess sludge discharged fromenvironmental facilities involve dewatering then incinerating, composting or simply
using it for landfill. The cost of disposal and the burden on the environment (CO2emissions) associated with these approaches account for a significant portion of theoperating and maintenance costs of such environmental facilities. This has led to thelaunch of various new initiatives to find ways to reduce costs. The Deires is designed
to process excess sludge sourced mainly from large agricultural sewerage systems.
Rather than relying on large facilities and the use of chemical compounds, the Deires
employs microorganisms (bacilli bacteria), and operating techniques that stimulate
the function of such bacteria, to greatly reduce the volume of sludge generated. It is asystem that requires very little initial outlay or operating costs, as it is designed toserve as an upgrade to existing facilities. Records shows that it is capable ofreducing the annual output of sludge by over 40%. Another important feature of theDeires system is its powerful deodorizing capability that is effective in lowering
operating costs and reducing the environmental burden (CO2 emissions) of existing
deodorizing facilities.

16

Starter (Initial
Phase Only)
Pipeline

Settling
Basin

Pump
Well

Reaction
VesselSettling
Tank

Accelerator
The red lines indicate the new pipelines installed
in an existing facility to reduce the volume of sludge.
Note: A specialized starter agent is applied when system normal operation commences.
An accelerator unit is also provided to stimulate microbial reaction.

Sumitomo Heavy Industries Environmental Sustainability Report 2007

■ Pelletizing Recycling System

Sumitomo Heavy Industries Modern, Ltd.

Over the course of producing and working with plastic film, waste is generated in theform of various leftover cuttings. These include the trimmings from either edge of the
sheet, leftover cuttings from the center of the sheet when cutting out pieces of
specific sizes for special applications and the occurrence of defective, either too-thinor thick, sections at system startup. Now the leftovers that were formerly incinerated
as waste can now be pelletized and recycled by mixing them in with new plastic
materials. The Company now manufacturers and sells machines for palletizing theserecycled pieces of plastic film, in addition to the extrusion molding machines used tomake the film. Pelletizing machines are divided into two series based on the way
they cool the plastic after the hot cutting process. One uses air cooling and the otheruses water cooling, depending on the type of plastic being pelletized. Pellet sizes
can also be adjusted to suit the application.

Pellex PX Series■ Ion Implantation System

SEN Corporation - an SHI and Axcelis Company

Ion implantation systems are designed to implant ions during the semiconductortransistor forming process by accelerating ions and shooting them into silicon wafers.
They perform a key function in the semiconductor production industry. SEN Corp., aleading manufacturer of ion implantation systems in Japan, now supplies highperformance, highly reliable systems tailored to the ongoing miniaturization needs ofthe most advanced semiconductor elements. The Company’s systems contribute to
reductions in both voltage and current consumption in the production ofsemiconductor elements. SEN Corp. also implements a policy of using energyconserving components and devices in order to ensure its systems are energy
efficient. A good example is the vacuum pump rotation control system that effectively
reduces energy consumption by switching rotation speeds when no-load conditions
occur.

LEX3 High-Current Ion Implantation System■ Electric Forklifts

Sumitomo NACCO Materials Handling Co., Ltd.

The AC current model of the electric forklift is a Company product that contributes toenvironmental preservation by significantly conserving on the energy it consumes.
The reach forklifts, which account for half of the Company’s forklift demand, are allfeature-enhanced, energy-conserving AC models. Models in this line range from 0.9
tons to 3 tons. In response to popular demand, new energy-conserving AC models
offering equivalent performance are increasingly being provided as substitutes to theengine type in the counter-balanced forklift class. Models are unavailable for the fullline, ranging from 0.9 tons to 7 tons. The Company is focusing efforts on expanding
its range of electric forklift models in the future to meet broadening customer
demand.

17

Sumitomo Heavy Industries Environmental Sustainability Report 2007

■ Kurieko II

Nihon Spindle Mfg. Co., Ltd.

The Kurieko offers precision air conditioning control while consuming very little
power. The Company’s unique control system is capable of regulating temperature towithin – 1 degree Celsius and humidity levels to – 5 of the selected setting. Bothtemperature and humidity control are key functions, in addition to dust particle
control used in clean rooms employed in semiconductor manufacturing applications.
The Kurieko II has successfully reduced power consumption to only 40% (based on
Company comparisons) of conventional levels through introducing the inverter typerefrigeration unit and the Company-unique VIOS control system. Operating costs
have also been reduced.

■ Continuous Unloader

Sumitomo Heavy Industries Engineering & Services Co.,Ltd.

The continuous unloader, with its advanced environment-friendly design, has
become the leading system used in unloading bulk materials, such as iron ore andcoal, from ships. The structural design of the conventional grab bucket typeunloaders, with their inability to effectively close the material transport mechanism,are limited in their ability to control dispersal of dust and powder. The digging
implement aside, the Company’s continuous unloader systems completely close off
the material transport route. And a water garden type dust control unit is also used toensure that very little dust or powder is dispersed into the air by the digging
implement. Other improvements over conventional unloaders include switching fromhydraulic oil to an electric powered system for driving the main unloader components.
This move effectively reduced power consumption by 30% and lowered the flow ofpolluting oil that would normally enter the oceans. As a leading manufacturer of
unloading systems, the Company is proud to be able to supply unloading systems
friendly to the environment.

■ Steam Turbines

Shin Nippon Machinery Co., Ltd.

The Company’s steam turbines are now widely used in biomass power generation
facilities designed to promote use of renewable energy sources, as a way to reduce
CO2 emissions and preserve the environment. Markets include Asia and North,Central and South America. They are also used in waste disposal site power
generation facilities in Japan. Other applications for the Company’s steam turbines
include cogeneration power generation facilities, used to promote energy
conservation by using energy more efficiently, and various types of mechanical drive
systems.

The new application SNM axial exhaust steam turbine.

18

Sumitomo Heavy Industries Environmental Sustainability Report 2007

■ Wet Clutch and Braking Systems for Forging Presses

Sumitomo Heavy Industries Techno-Fort Co., Ltd.

The Company manufactures and sells large forging presses (1,600T to 2,500T)
equipped with wet clutch and braking systems. The new clutch and braking systems
significantly reduce the noise (from approx. 90 to 95 dB down to 80 to 82 dB)
generated by the traditional air-driven, dry type systems. This improvement has been
widely appreciated by customers for improving the working environment aroundforging presses. Introduction of a new type of brake lining extends brake life, andreduces maintenance and operating costs by better conserving energy comparedwith the air-type system.

■ High Speed Roll Centrifugal Casting

Sumitomo Heavy Industries HIMATEX Co.,Ltd.

SHI is a specialty steel manufacturer that produces and sells rolled steel products.
These products used in hot environments must be wear-resistant, surface abrasion
resistant, heat cracking resistant and tough all-round. The standard steel roll
production method is stationary roll casting involving the use of only one type ofmaterial. However, only limited improvements can be made with this method
because wear-resistance and toughness characteristics are reciprocal. With
centrifugally cast rolls, however, the more expensive, highly wear-resistant hardmaterial is used for the outer shell layer and the tougher ductile cast material is used
for the inner core of the layer. This type of composite roll offers an economic casting
method at a time when prices for raw materials used in ferrous alloy metals haveskyrocketed. The Company launched an aggressive effort to research and installequipment designed to develop the material for the centrifugally cast high-speed
steel roll in 1992. This type of role features high speed roll production of the leading
wear-resistant material. The Company succeeded in developing and mass-producing
this material and is now focusing on expanding sales. This new type of steel rolloffers wear-resistant and surface abrasion-resistant characteristics several times thatof conventional steel rolls, while conserving on both materials and energy. This highly
functional material has become very popular with customers.

■ SH200-5 Hydraulic Excavator

Centrifugal Casting High Speed Roll for Section Steel

Sumitomo Construction Machinery Co., Ltd.

The Company has launched sales of the SH200-5 Hydraulic Excavator, which
conforms with Japan’s Tier III emission regulations. The new hydraulic excavator
utilizes the Sumitomo-unique "Space 5" engine system that combines the common
rail, high-pressure, direct fuel injection system (Note 1) and the cooled EGR (Note 2)
system. Teaming the new engine system up with the perfectly matching "CAES"
hydraulic control system ensures maximum power output while reducing fuelconsumption by 20% (compared with conventional models). As before, the unit canstill operate for 10,000 hours between oil changes, and a new precision return filter
has been added to further improve system economy. The new hydraulic excavator
reduces the burden on the environment while offering advanced maneuverability,
driving quality that emphasizes safety and overall economy of operation.

Note 1: The common rail high-pressure direct fuel injection system is designed to keep the fuelunder high pressure and distribute it evenly to the injectors. Using electronic control tofine-tune the fuel injection pressure, timing and interval (volume) offers the ideal fuelsupply conditions.
Note 2: The cooled EGR (exhaust gas recirculation) system is designed to recirculate theexhaust gas and use it lower combustion temperature using a water cooling device in aconfiguration that reduces Nox emissions.

19

SH200-5 LEGEST

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Impact Data on Manufacturing Facilities■ Tanashi Works
Amount of electricity used

■ Chiba Works
Waste Materials(1000 kWh)

VolumeDisposed of
Recycling Rate

VolumeDischarged

Amount of electricity used

(t)

（％）

14000

1600

100

12000

1400

10000

1200

(1000 kWh)

80

0

2004

2005

2006 Yr.

3000

80
2500

10000

60
40

1000

20

5000

500

0
2001 2003 2004 2005 2006 Yr.

0

0

2004

■ Yokosuka Works
Amount of electricity used

100

25000

1500

200

0

（％）

2000

40

400

2000

(t)

15000

600

4000

VolumeDischarged

3500

60

800
6000

VolumeDisposed of
Recycling Rate

30000

20000

1000

8000

Waste Materials

2005

2006 Yr.

20
02001 2003 2004 2005 2006 Yr.

■ Nagoya Works
Waste Materials(1000 kWh)

VolumeDisposed of
Recycling Rate

VolumeDischarged

Amount of electricity used

Waste Materials

VolumeDisposed of
Recycling Rate

VolumeDischarged

(t)

（％）

(1000 kWh)

60000

10000

100

30000

6000

（％）
100

50000

8000

80

25000

5000

80

20000

4000

15000

3000

10000

2000

500

1000

40000

60

60

6000

30000
4000

40

2000

20

40

20000
10000
0

0

0

2004

2005

0

2001 2003 2004 2005 2006 Yr.

2006 Yr.

20
0

0

2004

■ Okayama Works
Amount of electricity used

(t)

2005

2001 2003 2004 2005 2006 Yr.

2006 Yr.

■ Ehime Works (Niihama Factory)
Waste Materials

VolumeDisposed of
Recycling Rate

VolumeDischarged(1000 kWh)

(t)

（％）

15000

2000

100

Amount of electricity used

Waste Materials(1000 kWh)

(t)
8000

40000

VolumeDisposed of
Recycling Rate

VolumeDischarged
（％）
100

35000
80
1500

6000

30000

80

10000
25000

60
1000

60
4000

20000
40

500

40

15000

5000

2000

10000

20

20

5000
0

0

2004

2005

0

2004

■ Ehime Works (Saijo Factory)
Amount of electricity used

Waste Materials(1000 kWh)

VolumeDisposed of
Recycling Rate

VolumeDischarged

(t)

（％）

14000

4000

100

12000

3500

10000

3000
2500

8000

80
60

2000
6000
1500
4000

1000

2000

40
20

500

0

0

2004

2005

2006 Yr.

00

2001 2003 2004 2005 2006 Yr.

2006 Yr.

0

2001 2003 2004 2005 2006 Yr.

20

2005

2006 Yr.

0

2001 2003 2004 2005 2006 Yr.

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Impact Data on Related Companies■ SEN Corporation - an SHI and Axcelis Company
Amount of electricity used

Waste Materials

VolumeDisposed of
Recycling Rate

■ Shin Nippon Machinery Co., Ltd.

VolumeDischarged

Amount of electricity used

Waste Materials

VolumeDisposed of
Recycling Rate

VolumeDischarged(1000 kWh)

(t)

（％）

(1000 kWh)

(t)

（％）

25000

250

100

7000

250

100

200

80

150

60

100

40

50

20

0

0
2001 2003 2004 2005 2006 Yr.

6000
20000

200

80
5000

15000

150

10000

60

100

4000
3000

40

2000
5000

50

20

0

0

0

2004

2005

1000
0

2001 2003 2004 2005 2006 Yr.

2006 Yr.

2004■ Nihon Spindle Mfg. Co., Ltd.
Amount of electricity used2005

2006 Yr.

■ Izumi Food Machinery Co., Ltd.

Waste Materials

VolumeDisposed of
Recycling Rate

VolumeDischarged

Amount of electricity used

Waste Materials

VolumeDisposed of
Recycling Rate

VolumeDischarged(1000 kWh)

(t)

（％）

(1000 kWh)

(t)

（％）

3500

1200

100

1000

250

100

3000

1000

80

800

200

80

2500

800
60

600

150

60

2000

600
400

100

40

400

40

1500
1000

200

20

200

50

20

0

0
2001 2003 2004 2005 2006 Yr.

0

0
2004

2005

2006 Yr.

■ Sumitomo NACCO Materials Handling Co., Ltd.
Amount of electricity used

Waste Materials

VolumeDisposed of
Recycling Rate

0

0
2004

2005

2001 2003 2004 2005 2006 Yr.

2006 Yr.

■ Lightwell Co., Ltd.
VolumeDischarged(1000 kWh)

(t)

（％）

6000

2000

100

Amount of electricity used

Waste Materials(1000 kWh)500

VolumeDisposed of
Recycling Rate

VolumeDischarged

(t)

（％）

25

100

20

80

15

60

10

40

5

20

0

0
2001 2003 2004 2005 2006 Yr.

450

5000

1500

400

80

350

4000

60
3000

300

1000

250

40

200

2000

500
1000

150

20

100
50

0

0
2004

2005

2006 Yr.

00

2001 2003 2004 2005 2006 Yr.

2004

21

2005

2006 Yr.

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Social Contribution Activities
Activities in the Community
1 Activities in Regional Communities
Part of the Tanashi Factory was made into a park called the "Forestof Inspiration" and opened to the general public in 1995. Rather
than simply opening the gates, SHI commissioned a local social
welfare institution to manage the park. Proceeds from such things
as sales of compost created from the fallen leaves and othernatural items in the park and from the sale of drinks from automatic
vending machines placed in the park go to the welfare institute for
its upkeep. About 50,000 square feet in size, the park offers nature
trails that can be easily navigated, even by visitors in wheelchairs.
Park benches are located throughout the park and there is awelcoming atmosphere for everyone. The park is populated bymany older trees that offer a habitat for various types of insect lifethat visitors come to admire, including the ever popular rhinoceros
beetle in summer. Acorns from the park are supplied to local
elementary schools for use as nature teaching materials. SHI
strives to make maximum use of the attractions of this little forest
as it strives to contribute to regional communities.

Forest of Inspiration

2 The Family Council
Family Visit to the Yokosuka Factory in 2007
A family visit to the Yokosuka Factory took place on the day of theStar Festival (Saturday, July 7) in 2007. Although the day beganwith a light sprinkling of rain, a total of 1,600 factory employees andemployees of affiliated companies and their families braved thefickle elements to converge on the factory for a visit to the various
factory departments. The event included a variety of traditional
dishes made at concession stands set up by the employees of thevarious departments. The delicacies on offer included yakitori(chicken and other foods broiled on skewers), hot pot dishes, sweetand refreshing piles of shaved ice flavored with fruit cordials andothers treats. Entertainment activities included blowing up balloons,putting on a blindfold and finding and smashing the cabbage(substitute for the traditional watermelon), an African drum recitaland Hawaiian music accompanied by a hula dance. As part of an
ongoing effort to make the Yokosuka Factory a greener
environment, the group called the "Forest of a Thousand YearsSociety," a local civic organization active in the city, attended also.
They had been planning to plant 2,100 trees on factory property
and so took this opportunity to encourage members of the family toplant a few. Those few eventually grew to 600 trees on the day.
The Forest of a Thousand Years Society
began gathering acorns, part of theregion’s natural flora, in 2001. The
acorns they planted have gown toseedlings that they are now planting, as
part of their quest to "Grow From a
Small Forest." So far, they have planted
6,500 trees in the Yokosuka area. The
Society holds that rich, green forests
help to foster healthy and vibrant seas.
Building healthy forests makes forhealthy rivers, and oceans and caneven translate to richer thickets aroundsacred village shrines and even help
local people to a healthier and more
rewarding existence. Strong forests also
play an important role in reducing theeffects of global warming, and preventing
natural disasters. Contri-butions from
employees last year were used to plant
Ginko trees as part of the many ways
employees at the Yoksuka Factory
actively involve themselves in local andenvironmental activities.

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Sumitomo Heavy Industries Environmental Sustainability Report 2007

Nagoya Factory Environmental Event (Family Day)
The Nagoya Factory held Stop Global Warming Day on Saturday,
August 26 of last year. This environmental event was intended toeducate families on how the effects of global warming will be felt
even in the home through a program of fun but educational activities.
Attending the event were company employees and their families.
The regional power utility, Chubu Electric Power Co., participated bygiving a presentation using moving models to explain how power
generation works and how we can all help to conserve energy
resources. There were also classes on power generation geared toboth children and grown-ups. The various exhibit models and the"delivered to your door" energy classes were great fun for thechildren and took in quite a few adults as well. A contest was held for
visitors to create their own posters for the Stop Global Warming Day.
Winning posters were selected and displayed and awards presented
to those whose works qualified. Those admiring the display of
posters, some of which featured text as well as objects, inspired
animated discussion among the viewers about how truly important it
is to prevent global warming. This type of event is important in that ithelps raise awareness of global warming and encourages people to
make environmental concerns part of their daily life.

3 Disaster Preparedness
In accordance with the Disaster Prevention Law, the various
business sites affiliated with the petroleum complexes in the
Niihama district joined together in setting up a joint disasterprevention organization. The organization holds annual joint
disaster prevention drills six times a year. SHI participates in the
drills once a year in May. This is a large and carefully planned drillthat includes training for sending important disaster bulletins,fighting fires, and providing first aid to the injured. Participating in
the drill are the Niihama City fire Department, the joint disasterprevention organization, and the Sumitomo Chemical Co. Ltd. selfdefense and fire brigade. The drill includes visits to the various
participating business sites. SHI has three affiliated companies in
the Niihama district that participate in the drills on a rotating basis
once a year each. The photograph shows representatives from
Sumitomo Heavy Industries HIMATEX Co., Ltd. participating in a
drill last year.

4 Local Cleanup Operation
Saijo City, Ehime Prefecture
Dubbed the Refresh Setonai Area Project, this volunteer activity
was conducted with the participation of approximately 60
employees from the SHI group. The activity was conducted Sunday
July 8 beginning at 8 a.m. and ending at 9:30 a.m. The event isheld annually at same time of year. The Saijo City Maritime
Promotion Association sponsors and funds this event, which takes
place at the last remaining sandy beach area along the Takasu
coastline in the Toyo district. The local businesses listed on thenext page also participated in the event.

23

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Activities
SHI is committed to complying with all laws, regulations andagreements relating to occupational health and safety and theenvironment. Overseeing these duties are SHI’s safety-related
departments, facilities departments and the General Affairs
Department. The Company first established environmental
management sections at each business site in the early 1990s as
part of an effort designed to contribute to environmental
preservation through various corporate activities. The
environmental management sections are responsible for
introducing environmental management systems in theirjurisdictions and taking the initiative in conducting various
environmental activities. The SHI Group environmental policy wasestablished in 1999. It is in accordance with the tenets of thispolicy that the SHI Group conducts its various environmental
activities. The SHI Group issued its global warming prevention
declaration in August 2005 and has launched an proactive
program of activities designed to help prevent global warming.

Year

Environmental Activities Conducted by the SHI Group

January 1992

Environmental Conservation Committee is established.
(Measures, including a blanket ban on the use of CFCs, are introduced to deal with substances detrimental to the ozone
layer. Waste recycling and energy conservation activities are also initiated.)

October 1993

The "SHI Environmental Protection Plan" is established.

April 1994

The Technology Headquarters Environmental Group is formed.

April 1997

The Environmental Management Guidelines are drawn up.

June 1997

Internal organizational changes result in the Environmental Group name being changed to Administrative Headquarters
Environmental Division.

September 1997

The SHI Environmental Policy is established.

August 1998

The Company registers for certification under the ISO 14001 management system.

November 1999

The SHI Group Environmental Policy is established.

February 2000

Registration for certification under ISO 14001 is completed for all SHI sites.
The companies concerned complete registration for certification under the ISO 14001 management system.
The companies concerned include Sumitomo NACCO Materials Handling Co., Ltd., Shin Nippon Machinery Co., Ltd.,
Izumi Food Machinery Co., Ltd., SEN Corporation — an SHI and Axcelis Company, and Sumiju Environmental
Engineering Inc.

November 2002

The Water & Environment Group, Energy & Environment Group and Lightwell Co., Ltd. complete registration forcertification under ISO 14001.
The various SHI manufacturing facilities and business sites, and the various companies concerned establish their own
targets and action plans for conducting environmental activities.

April 2005

Internal organizational changes result in the Environmental Management Division being renamed the General Affairs
Headquarters Environmental Management Division.

August 2005

The SHI Group issues the "Global Warming Prevention" declaration.

March 2006

Nihon Spindle Mfg. Co., Ltd. completes registration for certification under ISO 14001.
All key SHI group divisions complete registration for certification under ISO 14001.

February 2007

Japan Irradiation Service Co., Ltd. completes registration for certification under ISO 14001.

24

Sumitomo Heavy Industries Environmental Sustainability Report 2007

Environmental Management Network (Comprised of Facilities and Related Companies With ISO14001 Certification)

Izumi Food Machinery Co., Ltd.
Nihon Spindle Mfg. Co., Ltd.
Amagasaki Factory, Shin Nippon Machinery Co., Ltd.
Izumi Food Machinery Co., Ltd. (Awaji Factory)
Tsuyama Factory, Shin Nippon Machinery Co., Ltd.
Okayama Works, Sumitomo Heavy Industries
Finetech Co., Ltd.
Ehime Works (Niihama Factory)
Sumitomo Heavy Industries Techno-Fort Co., Ltd.
Sumitomo Heavy Industries Engineering & Service Co., Ltd.
Sumitomo Heavy Industries HIMATEX Co., Ltd.

Head Office
Shin Nippon Machinery Co., Ltd.

Ehime Works (Saijo Factory)

Lightwell Co., Ltd.

Ehime Factory, SEN Corporation - an SHI and
Axcelis Company
Kure Factory, Shin Nippon Machinery Co., Ltd.

Japan Irradiation Service Co., Ltd.
Chiba Works, Sumitomo Construction
Machiney Co., Ltd.
Tanashi Works
Yokosuka Works, Sumitomo Heavy
Industries Marine & Engineering Co., Ltd.
SEN Corporation - an SHI and Axcelis
Company
Nagoya Works, Hitachi Sumitomo Heavy
Industries Construction Crane Co., Ltd.
Sumitomo NACCO Materials Handling Co., Ltd.

25

http://www.shi.co.jp
Contact Information
Environmental Management Division
Think Park Tower, 1-1,Osaki 2-chome, Shinagawa-ku
Tokyo, Japan 141-6025
Phone (03) 6737-2325 Fax (03) 6866-5104

Mixed products
FSC is our product group that works toensure that our products are made using
either FSC certified timber from a
responsibly managed forest or recycledwood or wood fibers.

Sumitomo Heavy Industries is an active participant in Team Minus 6%,
a national campaign to reduce greenhouse gases by 6%.
Working together to stop global warming
Team Minus 6%

O045 E 071