Sumitomo Opens Gear Reducer Plant in Brazil

$73-million operation will manufacture gear speed reducers for South America

Japanese industrial machinery manufacturer Sumitomo Heavy Industries, Ltd. has opened a new plant near São Paulo, Brazil, to produce gear speed reducers for distribution across South America. The plant at Itu represents a $73-million investment for SHI. It will be operated by the local subsidiary, Sumitomo Indústrias Pesadas do Brasil Ltda. The plant will handle all manufacturing processes (materials cutting, processing, assembly, and shipment) for SHI’s gear speed reducer product line, with output projected at 200 units/month.

SHI’s gear speed reducers are supplied as components for industrial process equipment in numerous industries, including drive cooling towers, mixers, conveyers, and others. The Brazilian plant’s initial output will be addressed to heavy equipment markets, such as mining, steelmaking, sugar processing, and brewing, according to SHI.

“The Brazil plant becomes our newest gear reducer factory. In our growth strategy for this business, we are placing our focus on markets in developing countries, and we have great expectations for Brazil,” stated Sumitomo Heavy Industries president Yoshinobu Nakamura.

SHI has been active in Brazil since 1976. “Although we have maintained small-scale, steady operations in Brazil, we plan to grow in the future,” explained SHI’s Mateus C. Botelhos. “Our immediate goal is to increase sales of gear reducers produced at the Brazil plant to approximately $58.4 million by 2015. Half of these sales will be in Brazil, while the balance will be in other countries within South America.”

The manufacturer said it may expand operations in Brazil, where it has acquired over 110 acres of land, as the gear speed reducer business grows. The new plant occupies about five acres, including the factory and office space. Total employment is 60, SHI reported.

Sumitomo operates seven other plants worldwide producing its gear speed reducers, including locations in Belgium, China, Germany, the U.S., and Vietnam. The gear reducer business had 2010 net revenues of approximately $900 million, 13.6% of SHI’s total net sales.

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