Sumitomo Metal Industries, Ltd. has decided to make a 5 billion yen (US$64.5 million) capital investment in its subsidiary Standard Steel in the United States. The purpose of the investment is to introduce a "vacuum degassing facility" for high cleanliness steel and Sumitomo Metals’ proprietary "rotary forging press" for high-precision wheels. Both companies will form a project team for facility improvement and aim at early completion of the project with the ultimate goal of enhancing the quality and added value of Standard Steel’s products. The project is expected to be completed by September 2014.

Standard Steel is the top manufacture of railway wheels and axles in the U.S. with a history of over 200 years. The transfer of Sumitomo Metals’ technologies in high-end wheels to Standard Steel will enhance their international competitiveness and improve their position in North America’s high-end railway wheel market for urban transportation, high-speed railways, and high-load freight cars.

As a result of this investment, Standard Steel will manufacture railway wheels of almost the same quality as those manufactured by Sumitomo Metals in Japan. The presence of manufacturing bases on both sides of the Pacific will result in a more reliable and stable supply to customers, even in the case of crises.

The investment will also result in enhanced manufacturing capability for high-end products. Standard Steel has already obtained manufacturing certification for Class D* wheels, which were introduced in North America. Class D wheels have a longer product life combined with excellent load bearing and wear resistance compared to conventional Class C wheels. Roughly 70% of annual wheel demand of 1.2 million units in North America is expected to consist of potential demand for Class D wheels.

* Class D specifications, which were established by the Association of American Railroads (AAR), are the specifications for high-load freight car wheels. The AAR enhanced the standard of strength in 2010 with the aim of reducing the occurrence of cracks and wear and lengthening product life. Class D wheels are appropriate for use in severe heavy-load conditions in mountainous areas, as they have excellent high-temperature durability and their strength weakens less even when heavy use of braking raises wheel temperatures.

 About Standard Steel LLC:

• History: Established in 1795, Sumitomo Metals invested in 2011
• Location: 500 North Walnut Street, Burnham, PA 17009
• Share ownership: Sumitomo Metals (80%); Sumitomo Corporation (20%)
• CEO: Daniel J. Condon
• Number of employees: 612 (as of March 2012)
• Business activities: Production of forged railway wheels and axles