Mitsubishi Steel to Establish Joint Spring Maker in India

Mitsubishi Steel Mfg, Japanese major special steel maker, decided to enter into basic memorandum to establish 2 joint companies with Stump & Schuele & Somappa Springs (SSSS), Indian spring maker. The joint companies will produce coil spring and stabilizer for automobiles and thick coil spring for construction machines. Mitsubishi Steel will conduct feasibility study on SSSS’s activities and enterprise value and establish the joint companies in 2Q 2012.

SSSS’s capital fund is 550 million yen. The firm was established in 1996 as a wholly owned subsidiary of Stump Schuele & Somappa (SSS) to produce spring, bulb spring and preciseness spring for motorcycle, three-wheeled cycles and automobile.

Mitsubishi Steel has contracted with SSS and SSSS for technical support about hot coil spring and stabilizer since 2003. They decided to collaborate in business value enhancement as a global supplier of spring products to Japanese, European and American automakers and sales expansion for construction machine makers.

Mitsubishi Steel and SSSS start talks on the joint companies’ capacity and controlling shares after due diligence.

In India, automobile sales totaled approximately 2.7 million cars mainly for small cars in 2010 and the market is forecasted to grow to the world’s three top in future. The market is still small for construction machine yet but is expected to expand along increasing demand for infrastructure development.