Visions - Summer 2010 - 3

Machinery and Power

Sunstate Expands SCOA’s Equipment Rental Reach in North America
New Investment Paves The Way For Expansion of Equipment Rental Business Across the Continent

A

ccording to the economic forecasting firm IHS Global Insight's report for the American Rental Association and Rental Management magazine, the combined U.S. & Canada equipment rental market totaled $32.9 billion in 2009. To that end, Daniel Kaplan, an industry consultant based in Morristown, N.J., and the former head of Hertz Equipment Rental Corp., indicated that total U.S. construction spending would experience a rebounding in 2011 and 2012. He expressed even more optimism in the longer term, which translates to good news for those in the equipment rental business. By 2014, IHS also forecasts North American rental revenue to be $41.5 billion with the U.S. market accounting for nearly $38.2 billion, well above revenue peaks reached before the latest recession. Sumitomo Corporation (SC), in cooperation with SMS International, has placed a multimillion dollar investment in Phoenix, Arizona-based Sunstate Equipment Company to capitalize on future increases in equipment rentals across the North American continent. Sunstate is one of the largest equipment rental companies in the United States, with 54 branch locations in nine states in the southwestern United States, and rental revenue in excess of $140 million last year.

SC and Sumitomo Corporation of America (SCOA) management studied a developing trend amongst end-users to rent equipment, rather than to own, within the construction equipment industry, a trend more pronounced in developed countries.To capitalize on this trend, Sumitomo identified equipment rental as a strategic business area worth its focus and attention, and subsequently worked toward an investment in the highly successful Sunstate. Sumitomo has been actively searching for an investment opportunity in the U.S. in particular. 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. 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 $1.2 billion. Sumitomo also has an existing equipment rental business in Canada with 14 branch locations operating through SMS Rents.Together with this
Sumitomo Corporation of America

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Visions - Summer 2010

Table of Contents for the Digital Edition of Visions - Summer 2010

Contents
Visions - Summer 2010
Sunstate Expands SCOA’s Equipment Rental Reach in North America
Establishing “One Stop Shop” To Bring Businesses Together
Gas Drilling Project Expands Energy Business Synergy
Treadways Celebrates 25 Years of Tire Business
Union Pacific, Nippon Steel and SC/SCOA celebrate their 25th Anniversary of Rail Supply Relationship
SCOA Foundation Continues to Give Back
Visions - Summer 2010 - Visions - Summer 2010
Visions - Summer 2010 - 2
Visions - Summer 2010 - Sunstate Expands SCOA’s Equipment Rental Reach in North America
Visions - Summer 2010 - 4
Visions - Summer 2010 - Establishing “One Stop Shop” To Bring Businesses Together
Visions - Summer 2010 - 6
Visions - Summer 2010 - Gas Drilling Project Expands Energy Business Synergy
Visions - Summer 2010 - 8
Visions - Summer 2010 - Treadways Celebrates 25 Years of Tire Business
Visions - Summer 2010 - 10
Visions - Summer 2010 - Union Pacific, Nippon Steel and SC/SCOA celebrate their 25th Anniversary of Rail Supply Relationship
Visions - Summer 2010 - SCOA Foundation Continues to Give Back
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