March 21, 2024

Sumitomo Corporation Acquired Trench Shoring Rentals (TSR), a Company that Rents Construction Equipment in the United States.

TSR, acquired by Sumitomo, has many trenches to prevent collapses during excavation work. A trench is a construction machine used for excavating narrow spaces below the ground surface. It is in high demand, mainly for water and sewer piping and road construction. The US trench rental market is currently 230 billion yen but is expected to grow to 300 billion yen by 2025.

Sumitomo also has a subsidiary, Sunstate Equipment, which is involved in the construction equipment rental business in the United States. With 91 US sales hubs and around 120 billion yen in sales, it is one of the major players in the North American construction equipment rental industry.

Sunstate is vital in the Southwest, including California and Texas, where infrastructure construction is thriving. TSR is also expanding its business mainly in the southwestern part of the country, and it has determined that there are high synergies. Sumitomo expects to use Sunstate's sales network to increase TSR's sales from several billion yen to approximately 10 billion yen.

In the US, demand for construction equipment is expanding. The US government passed the "Infrastructure Investment and Jobs Act" in November 2021, which provides a total of $1.2 trillion scale (about 180 trillion yen) in assistance for job growth. Of this amount, $110 billion will be allocated for road and bridge maintenance and $55 billion for water infrastructure.

Construction equipment rentals have become mainstream in developed countries such as the US, Europe, and Japan, where construction methods are diversifying. For example, rentals account for under 60% of construction equipment demand in the US and 80% in the U.K. With high prices and rising interest rates making construction equipment more expensive, Sumitomo estimates that rental demand will increase further.