Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo), Sumitomo Corporation (China) Holding Ltd. (Head Office: Beijing, China; CEO of Sumitomo Corporation China Group: Daisuke Mikogami; hereinafter 'Sumitomo Corporation [China]') and Beijing Capital Eco-Environment Protection Group Co., Ltd. (Head Office: Beijing, China; Chairman: Liu Yongzheng; hereinafter, 'Beijing Capital') (collectively, 'the three companies') will expand their water infrastructure business in Shandong, China. To this end, Sumitomo Corporation established a joint venture company in Shandong named Capital Summit Environment Investment Co., Ltd. (hereinafter, 'Capital Summit') with Beijing Capital, a leading water infrastructure company in China. Since 2010, the three companies have been jointly operating three sewage treatment plants. By adding the 29 sewage treatment plants owned by Beijing Capital, the three companies will jointly operate a total of 32 sewage treatment plants (with the total sewage treatment amount reaching about 1.3 million tons per day) through Capital Summit.

China's economic growth has been boosting its urban population and improving people's living standards, which is in turn raising their environmental concerns. In response, the national government has been working to improve the water environment across the country as its policy, and the importance of water infrastructure is increasing accordingly. In Shandong, where Capital Summit is planning further business expansion, the water supply population (Note 1) is predicted to increase by about 10 million people from the current level by 2030. Such expansion in demand necessitates the construction of new sewage treatment plants, the expansion of existing ones, the improvement of their operation, and the achievement of higher sewage treatment efficiency through technological innovation.

The Sumitomo Corporation Group has been providing about 20 million people with both water supply and sewage services in China, Brazil, the United Kingdom and in Middle East countries, thereby accumulating achievements and experience in the water infrastructure business. Beijing Capital, as a state-owned company under control of the Beijing government, is providing comprehensive environmental infrastructure services, both water supply and sewage services, for more than 50 million people in 28 provinces and at least 100 cities in the country. As of March 2021, the company is ranked sixth in the world in terms of the service population (Note 2).

Capital Summit is making use of the three companies' expertise in water treatment services for the development of new water infrastructure projects mainly in Shandong, aiming to double its sewage treatment amount to about 2.6 million tons per day by 2030. Moreover, in line with the partnership agreement that Sumitomo Corporation concluded with the Shandong provincial government in 2015, Sumitomo Corporation and Sumitomo Corporation (China) will work to increase the operational efficiency of the sewage treatment facilities by using and introducing Japan's technologies and know-how.

The Sumitomo Corporation Group upholds 'Social Infrastructure' as one of its next-generation growth fields in the Medium-term Management Plan 'SHIFT 2023', and is working on the operation and development of various businesses, including the water, railroad and airport businesses. Going forward, the Group will continue to strive for the sustainable development of society by promoting social infrastructure businesses that will contribute to the growth of the local communities and the local economy as well as to the improvement of people's living circumstance.

Sumitomo Corporation's Material Issues

Sumitomo Corporation Group positions 'Six Material Issues to Achieve Sustainable Growth with Society' as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to the following material Issues.

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