Shibaura Machine Co. Ltd. and Nissei ASB Machine Co. Ltd. are joining forces to build and sell injection molding machines in emerging markets, starting with India.
The two Japanese plastics machinery companies are forming a business partnership to combine their strengths amid unprecedented changes related to the COVID-19 pandemic; Industry 4.0; environmental, social and governance regulations; and intense global competition.
"In particular, the companies will aim to capture the top position in terms of market share in India and increase global sales by utilizing resources at their locations in India, which are primary locations for their business," the companies said in a Dec. 6 statement.
Shibaura, which was formerly named Toshiba Machine Co. Ltd., manufactures injection molding, die-casting and extrusion machines as well as machine tools, robots and electronic controls. The company is based in Tokyo.
Founded in 1978, Nagano, Japan-based Nissei ASB manufactures injection stretch blow molding machines to produce bottles made from PET and other materials.
Shares of both companies are publicly traded.
A Dec. 6 news release said the companies "aim to provide customers with the highest value on a global level by combining what each has to offer in the value chain from development to sales using their unique strengths and know-how as machine makers."
The partnership will first focus on small all-electric injection molding machines, which are expected to be a growth product, the release says.
Shibaura builds all-electric presses ranging from 33 to 2,750 tons of clamping force and servo-hydraulic machines ranging from 110 to 3,850 tons of clamping force.
The Japanese companies plan to combine Shibaura press technology with Nissei ASB procurement and production capacity in emerging markets. They will continue to use their own customer sales routes, according to the release.
Nissei ASB has a factory in Ambernath, India, a suburb of Mumbai, to meet local demand for PET bottle production and to serve as an export base.
Nissei ASB's website also shows an office in Chennai, India, where Shibaura also has a plant. Shibaura recently acquired a neighboring site and is constructing a new facility next to the existing one, according to management strategy information that the company posted on Nov. 16.
With both companies looking to grow in India, the release said Nissei ASB and Shibaura Machine entered a memorandum of understanding as the starting point for a discussion about ways to work together in a broad range of fields.
The partnership will begin with "collaboration in the manufacture and sale of injection molding machines at locations in India," the release said.
Shibaura's management strategy gives a few more details about its plans in Asia. The strategy calls for consolidating the production of hydraulic injection molding machines in Chennai, while its plants in Japan specialize in large injection molding, die-casting and extrusion machines and its plants in China and Thailand focus on small and midsized injection molding machines as well as small die-casting machines.
Shibaura also plans to transfer robot production to China and establish a smart factory in Numazu, Japan.
Toshiba Machine Co. Ltd. changed its name to Shibaura Machine Co. Ltd. effective April 1, 2020. The new name took the company back to its roots, since it was founded in 1938 as Shibaura Machine Tool Co.
In 1961, Shibaura Machine merged with a corporate spinoff to form Toshiba Machine. More recently, the company dropped the Toshiba name to reflect its independence from Toshiba Corp., the former parent company and top shareholder.
Plastic and metal machinery is the largest segment at Shibaura. The company posted 2020 sales of 92.6 billion yen ($815 million).
For the six-month period that ended Sept. 30, Shibaura posted sales of 53.7 billion yen ($473 million) and operating profit of 2.4 billion yen ($21 million).
Order backlog is strong and should allow Shibaura to meet the fiscal 2023 sales goal of 135 billion yen ($1.19 billion), the management strategy said. The company's fiscal year ends in March.
Nissei ASB posted sales of 35.89 billion yen ($315 million) for the fiscal year ended Sept. 30, up nearly 32 percent from 2020. Operating profit of 8.7 billion yen ($76 million) was up 80 percent.
The release said the partnering companies will later announce details about their business model, including specific roles and the division of functions.