Furukawa Electric to Buy Mitsubishi Cable’s Auto-Connector Business

Furukawa Electric announced on Friday the automotive parts making subsidiary, Furukawa Automotive Systems purchases automotive connector business from Mitsubishi Cable Industries by February 2012. They reached the agreement on Thursday while they didn’t disclose the purchase value. Furukawa Electric tries to cover the connector for higher value and technology.

Furukawa Electric purchases Mitsubishi Cable Industries’ Thai connector plant and a part of equipments in China and Japan while Furukawa Electric succeeds related 145 employees including 20 of development engineers from Mitsubishi Cable Industries.

Mitsubishi Cable Industries makes the connector in Thailand, China and Japan to serve Japanese automakers and automotive parts makers. The production was 7.8 billion yen in fiscal 2010 ended March 2011. However, the firm withdrew from mainstream business for wire harness in 2010.

Furukawa Electric makes the connector in Japan and Vietnam. The production was 6 billion yen in fiscal 2010. However, the connector production covers only around 5% of the requirement of the wire harness while the connector represents around 40% of total wire harness cost.

Through the acquisition, Furukawa Electric can cover around 30% of required automotive connector for wire harness. The firm plans 25 billion yen of automotive connector production in 5 years.