Sumitomo Metal Industries outsources to IBM

IBM selected as tech partner for Sumitomo Metal in US$660 million, 10-year contract

Singapore, 17 April 2000 - IBM announced that Sumitomo Metal Industries, Ltd. (SMI), in a move to drastically reform its information systems and develop new e-business solutions, has selected IBM Japan to manage its IT systems in a ten-year deal worth over US$660 million.

In outsourcing its information systems to IBM, SMI has decided to undertake major reform of its information systems to allow it to better respond to the demand for information internally and externally; to achieve more efficient systems operations and to utilize electronic networks to help it manage its business.

IBM, through its services arm IBM Global Services, the world's largest information technology services company, will be responsible for the development, maintenance and operation of SMI's existing steel production, sales, distribution and administrative systems with the aim of helping the company improve productivity, integrate hardware and streamline and standardize software.

Mr. Michio Kubota, General Manager, Information Systems department, SMI Sumitomo Metals, said that SMI wants to develop an information system that will meet its future needs in the networked era.

"Working with IBM will enable us to build an integrated information network for systems that are currently dispersed throughout the company. In addition we will utilize IBM's leadership in IT to link users, trading companies, steel service centers and affiliated companies via an electronic network," he said.

Mr. Takao Endoh, General Manager, Sector Services, Industrial and Distribution Sector, IBM Global Services Japan, said that organizations around the world are finding that e-business solutions that put common processes such as payment systems and Supply Chain Management onto the Internet are powerful tools for transforming business.

"IBM will work with SMI to improve current IT systems and help implement e-business solutions that will allow SMI to manage its business even better than it currently does," Mr Endoh said.

The contract commenced this month and IBM and SMI formed a joint venture company to manage the contract.

About Sumitomo Metal Industries
Sumitomo Metal Industries, Ltd. is one of the world's largest steel manufacturing companies with products that include steel sheets & plates, steel pipes, construction materials and railway products. In particular, it is a world leader in technology for seamless pipes used in areas such as oil drilling. The company merged with Sumitomo Sitix Corp. in 1998 and is actively developing operations in other engineering and related fields, as seen in its steady growth in sales of silicon wafers used in semiconductors. Total sales for fiscal 1999 are expected to be over US$8.5 billion (910 billion yen) for the parent company and over US$13.2 billion (1,420 billion yen) on a consolidated basis.