In a sign of continued financial pressure on the Japanese injection press industry, Japan Steel Works Ltd. said Jan. 26 it was buying a majority stake in its smaller rival Meiki Co. Ltd., building on an existing partnership between the two firms.
Tokyo-based JSW said it will pay 520 million yen ($5.8 million) for a 50.95 percent stake in Meiki, based in the city of Obu, near Nagoya. In late 2008, JSW bought a 14.8 percent stake in Meiki.
Both firms said in a statement they decided to consolidate “to survive the global competition.”
The companies plan to more closely integrate their existing partnership in areas including joint marketing, personnel exchange, technology leveraging, common procurement and sharing production facilities, and having Meiki sell JSW's small- and medium-tonnage machines.
In particular, the companies said they want to expand their automotive business by better linking JSW's medium- and large-size all-electric servo drive injection technology and sales network with Meiki's large-scale specialized machines.
JSW assembles its injection presses in Hiroshima, Japan.
Officials of the U.S. operations of JSW and Meiki outlined how the press makers complement each other, during a Jan. 13 open house at JSW Plastics Machinery Inc.'s new technical center in Lake Zurich, Ill.
Automotive is a “key point” to the merger, according to Toshimichi Ito, president of Meiki America Corp. Meiki is strong in multicolor injection molding to make taillights, while JSW has a good position in single-material presses that mold front headlights.
Meiki also is a player in the emerging market for injection molded polycarbonate car windows. Meiki has a development project with Japanese PC resin supplier Teijin Chemicals Ltd., which can mold windshields on a large-tonnage Meiki at Teijin's technical center in Chiba, Japan.
Meiki presses are also well-known in the optical disc business, where they mold CDs and DVDs.
Fumio Hirayama, president of JSW Plastics Machinery, said JSW leaders would not decide to buy a competitor simply to consolidate the machinery sector. The deal makes both JSW and Meiki stronger, he said.
In spite of recent hard times, JSW said the injection molding machine market is slowly starting to show signs of recovery, and in the next fiscal year, the global auto industry is expected to resume capital investments, fueling demand for molding machines. JSW board members will also be sent to Meiki to work with its restructuring plans.
In the United States, Hirayama and Ito said that, later this year, Meiki America will close its operation in Elk Grove Village, Ill. JSW Plastics Machinery, based in Corona, Calif., will take over Meiki America.
After the deal is closed, Ito said, he will return to Japan.
Hirayama also will return to Japan, ending his 19-year stint working at JSW's U.S. operation. At the end of March, Hirayama will move to JSW headquarters, where one of his jobs will be helping to start the machinery maker's first operation in Brazil.
“A lot of Japanese automobile companies, and our customers especially, they have decided to establish their plants in Brazil, so we need to be there to help them,” Hirayama said.
JSW will start by working with a manufacturers' representative this year. Officials hope to have a JSW subsidiary there in 2011, he said.
Takehiro Amaya will replace Hirayama as the top executive at JSW Plastics Machinery.
The JSW-Meiki announcement follows some other high-profile linkups in the Japanese injection press industry.
In 2008, Japan's Sumitomo Heavy Industries Ltd. bought Germany's Demag Plastics Group, and Toshiba Machine Co. Ltd. and KraussMaffei AG struck a technology development partnership.
Earlier this month, in a less far-reaching move, Japan's Mitsubishi Heavy Industries Plastic Technology Co. Ltd. said it would begin selling multicomponent injection presses in Japan from European competitor Engel Austria GmbH.
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