Visions - Fall 2013 - (Page 19)

CONSTRUCTION EQUIPMENT BUSINESS Sunstate Equipment Company n 2009, Sumitomo Corporation, in cooperation with SMS International, placed a multimillion dollar investment in Phoenix, Arizona-based Sunstate Equipment Company to capitalize on the increased demand for equipment rentals across North America. As one of the largest equipment rental companies in the United States, Sunstate had branch locations in eight states in the southwest U.S. and the company's rental revenue was in excess of $140 million a year, at the time of the investment. I Sumitomo identified equipment rental as a strategic business area worth its focus and attention, and subsequently worked toward the investment in Sunstate, a company with tremendous success as well as potential. Sumitomo was actively searching for an investment opportunity in the U.S., so Sumitomo Corporation and Sumitomo Corporation of America management studied data which indicated the end-users' preference towards renting equipment, rather than owning, within the construction equipment industry. This trend is even more evident in developed countries. With the world's largest market of more than $30 billion and rental penetration rates that have continued to increase year after year (from 25 percent to 40 percent over the past decade), the U.S. has the most attractive equipment rental market. Given the long-term growth prospects of this market, Sumitomo chose to invest and embrace this opportunity by entering the industry through a full scale investment in Sunstate. The Sumitomo Corporation is the first Japanese company to make a full scale investment in the U.S. equipment rental industry. Sumitomo currently operates construction equipment dealerships in North America with annual turnover of approximately 1.6 billion U.S. dollars. Sumitomo also has an equipment rental business in Canada with 15 branch locations operating through SMS Rents. Together with the investment in Sunstate, Sumitomo is following the plan to expand its equipment rental business portfolio and become a leading company in the North American equipment rental market. Yuta Matsui, SCOA's Vice President of Strategic Planning for Sunstate, indicated that historically, the primary focus of Sunstate has been metropolitan areas with high population growth, and the company has the benefit of a large inventory to suit the needs of their customers. "The company offers a broad range of construction equipment rentals," Matsui said. "The construction and industrial equipment includes backhoes, skid steer loaders, forklifts, earthmoving equipment, material handling equipment, compressor, pumps and generators. Additionally, we have aerial equipment such as scissor lifts, boom lifts and reach forklifts, as well as general tools and light equipment, such as power washers, water pumps, heaters and hand tools." Sunstate's Chairman and founder, Mike Watts, had a simple vision when he created Sunstate in Phoenix, Arizona back in 1977 - to provide high quality construction tools and equipment for the contractor, while upholding the highest standards of professionalism and integrity. "If you treat your employees with respect, then the employees will bend over backwards to take care of our customer," Watts said. "The emphasis is on people for a reason. Most tools can perform the same job, but the people behind the tool make the difference." Matsui said the market is relatively fragmented. "By executing the right strategies," he noted, "such as organic expansion through branch openings and selective mergers and acquisitions, we believe we can make Sunstate one of the overall leaders in the industry." Matsui sees a big picture that involves Sunstate helping to move forward a global expansion of SC's equipment rental business by transferring Sunstate's know-how. Together with SMS Rents, he believes that Sunstate is poised to become a long-term leading rental player in North America, and SCOA's integrated corporate strength will be a factor in that success. "When SCOA's group companies utilizes Sunstate in any circumstance that requires rental equipment for new construction, maintenance work, etc.," Matsui explained, "Sunstate can experience additional revenue while SCOA group companies are assured the best service - on-time delivery, well maintained equipment, which turns into low down time and low overall cost - in the industry." S u m i t o m o C o r p o r a t i o n o f A m e r i c a 19

Table of Contents for the Digital Edition of Visions - Fall 2013

Visions - Fall 2013
Contents
What is Infrastructure?
Interview with GM of Steel Group
Rail Supply Business
FOCUS: Union Pacific and Canadian National Ra
FOCUS: Arkansas Steel Associates
Structural Business
Interview with GM of Machinery & Power Business Group
Rail Systems Business
Automotive Business
FOCUS: New Mazda Plant
Aerospace Business
Renewable and Conventional Power Business
FOCUS: Desert Sunlight
Construction Equipment Business
Logistics Business
Corporate Social Responsibility - Clean Water Projects
The View from Washington

Visions - Fall 2013