Japanese Chemical Trader blog

Japan Chemical Trading Blog

Resource Business Caused Loss to Sumitomo Corporation

On September 29, Sumitomo Corporation announced, “in addition to the impairment loss of JPY 170 billion (Approx USD 1 billion and 7 hundred million) in the US shale oil development project, the losses of the Australian coal project (JPY 30 billion (Approx USD 3 hundred million)), Brazil iron ore project (JPY 50 billion (Approx USD 5 hundred million)), the US tire project (JPY 20 billion (Approx USD 2 hundred million)) make the total of JPY 270 billion (Approx USD 2 billion and 7 hundred million) loss in this period”.

Traditionally the company’s area of expertise has laid in the non-resource business, while the resource business was dominated by Mitsubishi Corporation and Mitsui & Co., who were early movers to acquire resource rights.

Is this a significant loss because of Sumitomo Corporation’s hasty foray into an unfamiliar field?
The focus from now on is if the company will add any further impairment loss.

Masa