Sumitomo Corporation, Tokyo, Japan, has invested $50 million in Sunstate Equipment Co., Phoenix, Ariz. Sunstate is one of the major equipment rental companies in the United States, with 52 branch locations in eight states in the southwestern U.S.
In a statement on its website, Sumitomo identified equipment rental as a strategic business area on which to focus going forward. The company has been actively searching for an investment opportunity in the U.S. Citing the $30 billion market and rental penetration rates that have continued to increase year after year—from 25 percent to 40 percent over the past decade—Sumitomo considers the U.S. the most attractive equipment rental market, despite the economic downturn.
“Although the U.S. construction equipment rental industry has been experiencing a severe downturn since the financial crisis, given the long-term growth prospects of this market, Sumitomo believes that it is an excellent opportunity to enter the industry by making this full scale investment,” the statement said.
Sumitomo 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. Sumitomo also has an existing equipment rental business in Canada with 15 branch locations operating under the name SMS Rents.