DATE: Sunday, August 31, 1997               TAG: 9709020278

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY LIZ SZABO, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:   78 lines

COMPETING GLOBALLY FROM CHESAPEAKE INDUSTRIAL PARTS MAKER IS AMONG 53 INTERNATIONAL COMPANIES OPERATING THERE.

Its machine parts are the driving force in everything from pizza dough mixers to windshield wiper blades. They run the conveyor belts at supermarket checkout stands and in copy machines, ski lifts and airport jet ways.

Sumitomo's industrial machine parts may never have household names.

But from a 6.2-acre plant in Chesapeake, Sumitomo Machinery Corp. of America and its 270 employees are waging global business warfare, aimed at expanding the company's worldwide market share.

The Chesapeake headquarters, established in 1988 in Cavalier Industrial Park, is the key to Sumitomo's global operations.

Sumitomo is one of 53 foreign companies from 15 countries operating in Chesapeake, said Tara F. Saunders , senior business development representative with Chesapeake's economic development office. These foreign companies employ nearly 3,400 people, with Japanese businesses accounting for nearly half.

Before 1988, Sumitomo's U.S. operations were limited to assembling parts imported from Japan at a plant in New Jersey. Today Sumitomo manufactures the machine parts it needs in Chesapeake, said ``Sam'' Kennosuke Ezoe, senior vice president of engineering and production. Half of the Sumitomo machine parts now sold in the United States are manufactured in Chesapeake. The company also exports many of its locally produced parts home to Japan.

Since coming to Chesapeake, Sumitomo has expanded beyond the United States and Canada to Mexico, Brazil, Chile, Australia, New Zealand, Singapore and South Africa. And it has its sights on the growing South and Central American market. Sumitomo hopes to open factories in Argentina, Venezuela and Panama within two to three years, Ezoe said.

``We've been very aggressive,'' Ezoe said.

Its parent company - Sumitomo Heavy Machinery Ltd. - is aiming for 10 percent of the world market by 2000, said Tsuneo Nagano. Nagano is executive vice president and chief financial officer for Sumitomo Machinery Corp. of America, which handles manufacturing in the Americas, Australia, New Zealand and South Africa.

That kind of corporate goal may seem daunting.

But Sumitomo Heavy Machinery has already nearly doubled its market share in just eight years, Nagano said, noting, ``We've put very demanding goals on ourselves.''

The company's best known product is its ``cyclo'' speed reducer. Sumitomo of America specializes in heavy-duty industrial machinery such as gear boxes and speed reducers - which increase torque to allow machines such as conveyor belts to move larger and heavier items, Nagano said.

Sumitomo's control of the world market in power transmission products has grown from 5 percent in 1988 to more than 9 percent this year, Nagano said. Last fiscal year's sales of $100 million were 20 percent higher than the year before, he said.

Sales next year for Sumitomo of America should total $120 million, Nagano said. Sales for the its parent company Sumitomo Heavy Machinery total $6 billion this year, he said.

``Our goal is to become the top manufacturer in the world,'' Nagano said. ``We've been working toward that goal for eight years.''

Sumitomo already dominates nearly 60 percent of the market for such products in Japan, Nagano said.

``Our business was virtually just Japan,'' Nagano said. ``We were very satisfied for a long time.''

But Sumitomo executives now believe the only way the company can grow is to attack the foreign market, as well, he said. Sumitomo controls about 10 percent of the U.S. market.

Sumitomo came to Chesapeake largely for its location, Nagano said.

A majority of the company's U.S. sales are to states east of the Mississippi, within a day's drive of Chesapeake. The city's central location on the East Coast - and its proximity to a major port - also drew the company to Chesapeake.

The company owns more than 100 acres in Cavalier Industrial Park - giving it plenty of room to expand, according to the company's report. ILLUSTRATION: D. KEVIN ELLIOTT color photos/The Virginian-Pilot

Michael Cummings, above....

The company's executives are, from left, Kennosuke Ezoe,...William

Lechler...Tsuneo Nagano...

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