Kobe Steel Acquires Chinese Major Compressor Maker, Wuxi Compressor

Kobe Steel announced on Tuesday the firm acquired 44.3% shares in Wuxi Compressor, Chinese major compressor maker, at approximately 4 billion yen to follow the demand growth for process gas compressor in China. Wuxi Compressor became Kobe Steel’s equity method affiliate. Kobelco (China) Holding, Kobe Steel’s subsidiary, acquired Wuxi Compressor’s shares.

Wuxi Compressor was established in 1955 and shifted to a private company in 1992. The capital fund is 92 million yuan. Wuxi Victor group holds the company’s 51.5% shares while 44.3% shares were acquired by Kobelco (China) Holding. Wuxi Compressor designs, produces and sells various types of compressor. The employees totaled 716 as of the end of 2010. The annual revenue was 650 million yuan with 30 million yuan recurring profit in 2010.

Wuxi Compressor is appreciated in the field of reciprocating compressor for petroleum processing and chemistry as well as air compressor. Kobe Steel has technically supported Wuxi Compressor for reciprocating compressor and small-size screw compressor. Kobe Steel aims to expand compressor business mainly for energy and chemistry fields in China where ethylene production is expected to increase rapidly and largely.

Kobe Steel will provide technological know-how of process gas compressor to Wuxi Compressor, which hasn’t been sold in Chinese market so far. Wuxi Compressor will purchase components for reciprocating compressor, oil cooling screw compressor and oil free type compressor locally and assemble them. Wuxi Compressor plans to double the sales in five years to 2015, including the export to Southeast Asia. Kobe Steel sends 4 staffs to Wuxi Compressor.

Kobe Steel plans to expand the compressor sales to 110 billion yen per year with 10 billion yen recurring profit worldwide in fiscal 2015 ending in March 2016.