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Social and
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News Release |
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News Release
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NSK acquires capital in a subsidiary of Seiko Instruments, Inc. in
HDD Parts and Small Ball Bearings Business |
NSK Ltd. ("NSK") and Seiko Instruments, Inc. ("SII", President Junichi Hattori) have agreed that NSK will acquire capital in SII's subsidiary Seiko Instruments Thailand Ltd. ("SIT"), which manufactures and sells pivots for hard disk drives ("HDD"), fluid dynamic bearing ("FDB") parts, small-size ball bearings and other products. NSK will purchase from SII 50% of the issued and outstanding shares of SIT.
Concerning SIT's main product, pivots, which NSK also manufactures, in Malaysia, both parties will share their engineering and manufacturing know-how, and will also enter into a partnership in parts procurement to strengthen competitiveness concerning manufacturing cost and quality. In addition, while NSK and SII will both maintain their own sales channels, SIT and NSK's manufacturing subsidiary in Malaysia will supply finished goods and parts to each other in order to meet demand fluctuations, then to improve their service to customers.
SII has been using SIT to develop its FDB parts business, which has high growth potential, and NSK and SII will collaborate in this operation.
In addition, the parties will jointly invest in the construction of a new plant at the SIT site to produce small-size ball bearings. NSK has been considering establishing a third strategic plant following those in Jakarta and Malaysia under the concept of optimally located production. Thailand has been the strongest candidate for this. Since SIT has been producing small-size ball bearings mainly as pivot parts, both parties have agreed to expand production capacity at the new facility utilizing SIT's current resources.
The market for small-size ball bearings is expected to grow continuously with the expansion of electrical and IT-related industries as well as the trend toward downsizing and high performance in other industries. NSK already has manufacturing capacity of 100 million pieces per month, which will be increased to 110 million by acquiring SIT's current capacity, and plans to raise this to 130 million (for a 70% manufacturing ratio outside Japan) in three years by constructing the abovementioned new plant.
The acquisition of capital will enable both NSK and SII to take a leading position in pivots, FDB parts, and small-size ball bearings segments with enhanced engineering capabilities resulting from the synergistic effect of NSK's technology in tribology and precision manufacturing, and SII's long experience of micro technology used in the manufacture of watches. The move will enable both parties to expand their business and improve profit. |
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