Financial overview

(in million JPY)	FY2008	FY2007	Increases(%)	Factors
Overall
Sales	604,974	567,306	6.6	-
Operating income	25,658	45,126	(43.1)
Ordinary income	14,792	43,201	(65.8)
Net income	1,020	19,498	(94.8)
Tire business
Sales	501,062	478,482	4.7	- Sales increased from a year ago thanks to strong demand in the overseas market.
Operating income	15,849	35,892	(55.8)	Operating income decreased significantly from last year's result due mainly to the following factors: -soaring materials prices -a decline in profit margins in the latter half because of the rising value of the yen -falling global market demand since October 2008

Contracts
-The Company announced that tires produced at Sumitomo Rubber (Thailand) Co., Ltd., its subsidiary in Rayong, Thailand, won the first business as factory-fitted tires. The Dunlop SP Sport 2030 tires were supplied to Toyota for the Vios (Belta in Japan) produced in Thailand. (From an article in the Nikkan Jidosha Shimbun on Jun.7 2008)

R&D Structure
-The Company's R&D activities are being conducted at SRI Research & Development Ltd. established in 2003.
-The Company is carrying out joint research with the Goodyear Tire and Rubber Company based on its ties with the U.S. tire supplier. Engineers of both companies work in teams for respective projects to exchange their technologies.


R&D Expenditure

(in million JPY)	FY2008	FY2007	FY2006
Tire Division	16,013	15,105	14,215
Total	19,351	18,223	17,291
Ratio of R&D expenses at Tire Division	82.8%	82.9%	82.2%

R&D ActivitiesProduct Development
-The Company announced that it has developed new technology to simulate and visualize noise generated by running tires. The new technology uses both the tire structure analysis and the aero dynamic analysis to reproduce the tire pattern noise. The new technology analyzes impact noise, which is generated when block patterns hit the road surface, and air-pumping noise, which is propagated when air in tire grooves is released as they are pressed onto the road, based on both the tire behavior simulation and aero dynamic simulation. Thus, air pressure fluctuations represented by noise can be shown visually. (From an article in the Nikkan Jidosha Shimbun on Sep.11繝ｻ 2008)

Capital Expenditure

(in million JPY)	FY2008	FY2007	FY2006
Tire Business	46,987	49,796	42,253
Total	49,601	53,205	45,308
Ratio of capital investment at Tire Division	94.7%	93.6%	93.3%

-The Company invested mainly in its tire business by increasing production capacities as well as reducing the number of employees needed. Targeted facilities include car tire production facilities in the Company's Nagoya Plant, Shirakawa Plant, Izumiohtsu Plant and Miyazaki Plant.


Major capital investment projects (Automotive Segment)

Company name (Location)	Project	Estimated amount (million yen)	Project Period		Increases in production capacity (%)
			From	To
Sumitomo Rubber Industries Nagoya Plant (Aichi Pref., Japan)	Production equipment for automotive tires	8,471	Jan. 2008	Dec. 2009	3
Sumitomo Rubber Industries Shirakawa Plant (Fukushima Pref., Japan)	Production equipment for automotive tires	6,597	Jan. 2008	Dec. 2009	1
Sumitomo Rubber Industries Izumiotsu Plant (Osaka Pref., Japan)	Production equipment for automotive tires	3,761	Jan. 2008	Dec. 2009	10
Sumitomo Rubber Industries Miyazaki Plant (Miyazaki Pref., Japan)	Production equipment for automotive tires	6,025	Jan. 2008	Dec. 2009	2
Sumirubber (Changshu) Co., Ltd. (Jiangsu Prov., China)	Production equipment for automotive tires	13,595	Jan. 2008	Dec. 2009	37
Sumitomo Rubber (Thailand) Co., Ltd. (Rayong, Thailand)	Production equipment for automotive tires	25,327	Jan. 2008	Dec. 2009	283